The learned Assessing Officer has failed to appreciate the Development Control Rules of Pune Municipal Corporation and the provisions of The Bombay Provincial Municipal Corporation Act 1949 and has further erred in holding that the authority to issue the completion Certificate to the building vests with the PMC. The aforesaid finding being patently contrary to the statutory provisions, the same may please be vacated and it may please be held that an authority to issue the Completion Certificate does not vests with the PMC authorities and therefore the statutory requirement of obtaining Completion certificate from the local authority is an impossibility in respect of Housing Projects developed in Pune and consequently the Completion certificate issued by an architect be held to be the sufficient compliance of the Statutory provisions u/s 80IB of the I.T. Act 1961 and consequently the deduction as claimed by the appellant u/s 80IB of the I.T. Act 1961 be allowed to the appellant.
Undisputedly, for claiming deduction u/s 80 IB(10), one of the requirements is furnishing of completion certificate in respect of such housing project issued by the local authority, to support the claimed date of completion of construction of the Housing Project within the prescribed time limit. It is clear from Explanation (ii) below Sec. 80 IB(10)(a ) of the Act. Contention of the Ld. A.R., as discussed above remained that the assessee had completed the Housing Project well before 31.3.2008 as required u/s. 80 IB(10) of the Act which is evident from furnishing of Completion Certificate as per Rule 7.6 of D.C. Rules for PMC on 29.10.2005 to the PMC. In this regard, he referred page No. 11 of the Paper Book No. 1 filed by the assessee. The authorities below did not agree with the same on the basis that the said completion certificate was not issued by the PMC but it has been issued by the architect, thus being a self serving document, it cannot be equated with the Completion Certificate issued by local authority to support the claimed date of completion of the construction of the Housing Project under the provisions of Sec. 80IB(10)(a), Explanation (ii). The contention of the Ld. A.R. remained that there is no such provision in the D.C. Rules for PMC for issuance of Completion Certificate by it, thus assessee cannot be expected to get Completion Certificate issued by the PMC which is beyond power and control of the assessee. The argument of the Ld. A.R.
in this regard has been discussed in detail hereinabove in his submissions. It also remained his argument that the PMC has delegated its power to issue Completion Certificate to licensed architect, engineer, structural engineer, as the case may be, who has supervised the construction for them and on their behalf to the assessee. In support, the Ld. A.R. also cited the decision of Hon’ble Supreme Court in the case of State of Rajasthan & Others v/s. Vasant Nahate (supra). We, however, do not find this decision relevant for the present issue because that case is having distinguishable facts and the issue involved therein was as to whether necessity of Legislators delegating its powers in favour of Executive is a part of legislative function. The licenced architect in the present case before us, is not an executive. The Ld. D.R. opposed the above submissions of the assessee merely on the basis that issuance of Completion Certificate by the local authority is mandatory to claim the deduction u/s. 80IB(1O) of the Act. His further submission remained that the Court may assert the real intention of the legislature by carefully attending to the whole scope of the Statute. We have already discussed detailed submissions of the Ld. D.R. hereinabove in this regard. The crux of those argument advanced on behalf of the Revenue by the Ld. D.R. is that the issue of Completion Certificate by the local authority signifies that the builder and developer has complied with all the statutory requirement in connection with the project. The local authority has to ensure that the project has been carried out as per the approved plan without violation of local laws like green belt, reserved areas and also without violation of other laws like coastal regulation etc. His submission remained that since PMC has no occasion to inspect the site for issuance of Completion Certificate and on furnishing of Completion Certificate by the licenced architect of the assessee as per Rule 7.6 read with Rule 7.7 of the D.C. Rules for PMC, the authority visits the site and issues or refuse Occupancy Certificate, thus under such arrangement in the case of PMC, the Occupancy Certificate only can be treated as Completion Certificate issued by it. If we keep in mind the very purpose of Legislature in providing incentive u/s. 801B(1O)(c), the benefit is to be secured for weaker section of the society to have accommodation on affordable price, then, there is no hesitation for us in agreeing with the submission of the Ld. D.R. that while interpreting a statutory provision, it is duty of the Court to ascertain first the real intention of the Legislature by carefully attending to the whole scope of the Statute. Admittedly, for issuance of Completion Certificate under D.C Rules for PMC, there is no occasion for PMC to visit the site and verify as to whether construction has been made as per the approved plan. For ready reference, Rules 7.6 and 7.7 of DC Rules of PMC are being reproduced hereunder ~
“7.6 Completion Certificate – The owner through the licensed architect, engineer, structural engineer, as the case may be who has supervised the construction, shall give notice to the Authority regarding completion of work described in the building permission. The completion certificate shall be submitted in the prescribed form by four sets of completion Plan. One of the sets, duly certified as Completion Plan shall be returned to the owner along with the issue of full occupancy certificate (see rule No. 7.7)”
“7.7 Occupancy Certificate – The Authority, on receipt of the completion certificate, shall inspect the work and sanction or refuse an occupancy certificate, in the pro forma given in Appendix K within 21 days from the date of receipt of completion certificate, after which period it shall be deemed to have been approved by the Authority for occupation provided the building has been constructed as per the sanctioned plans. Where the occupancy Certificate is refused, the various reasons shall be quoted for rejection, at the first instance itself.”
As it is evident from very reading of the above Rules, the owner through the licenced architect, engineer, structrual engineer as the case may be, who has supervised the construction gives notice to the authority regarding completion of work described in the building permission. The Completion Certificate is submitted in the prescribed form by 4 sets of Completion Plan. One of the sets, duly certified as Completion Plan is returned to the owner along with the issue of full Occupancy Certificate. Though there is no dispute and it has been also affirmed by the PMC in its reply dt. 4.10.2010 to the querries raised by the Department, in answering to the question in negative that as to whether Occupation Certificate and Completion is the same, but there is also no dispute that Occupation Certificate is issued or refused after inspection of the work by them. The very reading of Rule 7.6 of DC Rules, also suggests that after furnishing of notice to the authority regarding Completion of the work and Completion Certificate to the PMC in 4 sets in the prescibed form, one of the sets duly certified as Completion Plan is returned to the owner along with the issue of full Occupancy Certificate. Thus, Completion Plan and Full Occupancy Certificate in the case of PMC can be treated as completion certificate issued by the PMC to ensure that the project has been carried out as per the approved plan without violation of local laws and other laws. We are thus not inclined to accept the argument of the Ld. A.R that in case of PMC, the date of Completion Certificate issued by the licenced architect as per Rule 7.6 can be treated as compliance of the provisions of Explanation (ii) below Sec. 80 IB(10)(a), since in such Completion Certificate, issued by licenced architect, the local authority has no occasion to ensure that project has been carried out as per approved plan. Moreover, the occupancy certificate is issued by the PMC after inspection of the work by the authority. Under these circumstances, we are unable to accept the submission of the assessee that the date of furnishing of Completion Certificate by the licenced architect to the PMC on 29.10.2005 can be treated as date of Completion of the Housing Project as per the provisions laid down under Explanation (ii) to Sec. 801B(10)(a) of the Act as in that provision, the requirement is that Completion Certificate is issued by the local authority. It is mandatory also, which is apparent from the user of the word “shall” therein following the date of completion of construction of the housing project. For a ready reference, the said Explantion (ii) is being reproduced hereunder ~
“(ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority.”
Before parting with the issue, we would like to record our observation that to avoid such debatable situation and litigation, the authority concerned is expected to remove such ambiguity in the related provision for achieving the very object of the incentive provision u/s. 801B(10) of the Act in time. It is worth noting over here that in the State of Maharashtra itself different modes for issuance of Completion Certificate by the local authority have been provided in different Municipal The mode for issuance of Completion Certificate by the Licensed architect provided in DC Rules of PMC is exception to generally provided mode wherein Completion Certificate is issued by the local authority after inspection of the construction.