Income Tax Appellate Tribunal - Mumbai
Versova Sandeep Sarovar Chs Ltd, Mumbai vs Assessee on 13 November, 2013
आयकर अपील य अ धकरण,
धकरण मंुबई
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES 'E' MUMBAI
सव ी आय.पी. बंसल, या यक सद य एवं
/एवं
BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND
ी डी. क णाकर रावु, लेखा सद य
SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER
आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013
नधारण वष /Assessment Years 2006-07 to 2008-09
M/s. Versova Sandeep Sarovar बनाम The Income Tax Officer,
बनाम/
CHS Ltd., Ward 20(3) 4,
Vs.
Plot No. 13, SVP Nagar, Piramal Chambers,
Mahada, 4 Bunglow, Lalbaugh, Parel,
Andheri(West), Mumbai 400012
Mumbai -400053
थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAAAV 1292J
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से/ Appellant by: Dr.P. Daniel &
Shri S.M.Makhija
यथ क ओर से/Respondent by : Shri Girija Dayal
सनवाई
ु क तार ख / Date of Hearing : 13/11/2013
घोषणा क तार ख /Date of Pronouncement : 13/11/2013
आदे श / O R D E R
PER I.P.BANSAL, J.M:
All these appeals are filed by the assessee. They are directed against consolidated order passed by Ld. CIT(A)-31,Mumbai dated 28/3/2013 for assessment years 2006-07, 2007-08 and 2008-09. Grounds of appeal raised in all these appeals are identical except difference in figures. Grounds of appeal for A.Y 2006-07 are as under:
2 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 "1) The Learned CIT (Appeals) has erred in confirming the action of the Assessing Officer in determining the income of the appellant Co-operative Housing Society at Rs.
2,95,86,904/- u/s. 68 treating the same to be unexplained cash credit appearing in the Balance Sheet of assessee society on the asset side without appreciating that said sum is receivable from the members towards construction cost and other charges payable by them and therefore by no stretch of imagination can be held as unexplained cash credit liable to be taxed u/s. 68 of the Income Tax Act, 1961.
2) Without prejudice to the above, the appellant submits that the Learned CIT (Appeals) has failed to appreciate that so called Balance Sheet prepared by panel auditor appointed by the Administrator appointed by Registrar of Co-operative Housing Societies is not correct as per principles of accountancy and therefore cannot form basis for making any addition.
3) The Learned CIT (Appeals) has erred in confirming the order passed by the Assessing Officer without appreciating that assessee had a reasonable cause in not filing audit reports for each year during the course of assessment proceedings but had filed the same before him (Learned CIT(A)) which he had forwarded to Assessing Officer in the course of remand proceedings but Assessing Officer failed to take any cognizance of the same on technical grounds that assessee had been given sufficient opportunity at assessment stage and therefore additional evidence filed could not be admitted before Learned CIT (Appeals).
4) The Learned CIT (Appeals) erred in not adjudicating upon the plea raised by the assessee that the detailed reasoning given/additional evidence filed before him deserve to be admitted and justice imparted to the assessee.
5) The appellant craves leave to add, amend, alter and! or vary any of the grounds at the time or before the hearing of this appeal.
6) The appellant therefore prays that since assessee is a Co-operative Housing Society having no taxable income the entire addition of Rs. 2,95,86,904/- may please be deleted or alternatively matter restored to the file of Assessing Officer to consider the evidence and pass a fresh Assessment order after giving reasonable opportunity of being heard to the assessee."
2. For other years the figures are as under:
Assessment Year Amount of Income earned.
2007-08 Rs. 3,25,45,590/-
2008-09 Rs. 3,57,80,150/-
3. All these assessments are framed by three separate assessment orders dated 28/12/2011 which are passed under section 144 of the Income Tax Act, 1961 (the Act). The contents of all the assessment years are identical except difference in amount of income assessed.
3 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09
4. The facts as discussed in the assessment order are that assessee did not file any return of income for any of the impugned assessment years. The AO issued notices under section 148. The reasons for issuing notices though is not mentioned in the assessment order but are mentioned in the order of Ld. CIT(A). Based on information which was in the nature of TEP it was found that assessee was not filing of return of income, therefore, notices were issued to the assessee for filing the returns. The AO required the assessee to explain as to why the returns were not filed. The reply of the assessee as reproduced in the assessment order is as under:
"In this regard it is informed that the account of our society are still not audited, since beginning. This is remained incomplete as the records of society were not handed over by earlier office bearer much earlier to 2005. Thereafter due to various reasons the Dy. Registrar of Co-operative Societies, had nominated Administrator to look after the working of society. The Administrator also did not hand over complete documents to the Managing Committee formed, which is still running the society affairs successfully, except that of old documents, unavailable. Due to this reasons the society was unable to file any returns to your department We are however making all out efforts to trace the old records, so that the accounts are finalized and they are audited, which will facilitate the society to file the income-tax returns. In this regard the Society vide letter dated 04-08-2011 (enclosed) have also requested the Dy. Registrar, Co-operative Societies, for extension of AGM date, due to non-finalisation of old accounts and to prepare & present the accounts of F. Y. 2010-11 for A GM purpose.
As far as summons under section 143(2) concerned, it is in formed that the same was received in society office on 26-09-2011 and hence it was not possible for any member to remain present before you for the purpose. it was also presumed that since the return was not filed by the Society, no any return were available to place before you. As and when the records are traced and accounts are finalized, the return shall be filed without any further delay and placed before you. We regret for not appearing before you on the date fixed."
4.1 The AO issued another notice also to the assessee and it was made clear that in case the assessee does not comply with the requirements, the assessments will be completed under section 144 of the Act. Internal audit report for financial year 2005-06 (for A.Y 2006-07) was available with the AO in which an amount of Rs.2,95,86,909/- was shown to be received by the assessee as collected for building repairs and towards maintenance. In view of the failure of the assessee to submit 4 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 source of such collection and utilization thereof, the AO treated the said amount as assessable income of the assessee in respect of assessment year 2006-07. Thereafter, for other assessment years the AO added almost 10% to the said amount for each of the year and assessed the income in similar manner. The assessed income year wise is as under:
Assessment Year Amount of Income earned. 2006-07 Rs. 2,95,86,904/- 2007-08 Rs. 3,25,45,590/- 2008-09 Rs. 3,57,80,150/-
It may be mentioned here that the basis of assessing the aforementioned income is only internal audit report which was in respect of financial year 2005-06. For other assessment years no such material was available with the AO.
5. Aggrieved by the aforementioned orders the assessee filed an appeal Ld. CIT(A). The main submission of the assessee before Ld. CIT(A) was under:
"Your appellant is a co-operative housing society registered under the Cooperative Societies Act, since 1994. The Learned Income Tax Officer issued notice u/s 148 for the year under consideration without giving any reasons recorded by him for issuance of such notice. The Learned AO issued notice u/s 148 dated 31-12-2010 was served on the appellant on 11-01-2011. Thereafter, the AG requested the appellant vide notice u/s 148 dated 21-09-2011 to furnish the return of income immediately. The Office Bearers of the Society, has vide letter dated 04-10-2011 informed the difficulty in completing the accounts and requested the AG to give sufficient time.
The learned AO without giving sufficient opportunity hurriedly completed the assessment u/s 144 on the basis of Government Internal Auditor's Report dated October, 2006 covering the entire period from 06-09-1994 to 31-03-2006. The Learned AG simply picked up a figure of Rs.2,95,86,904/- shown as receivable from the members and taxed the same as income u/s 68 of the Income Tax Act.
The Learned AG has not advanced any reason for adding a sum of Rs.2,95,86,904/- as income of your appellant which is shown as receivable from the members."
As per further submissions vide letter dated 8/10/2012 it was submitted as under:
5 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 "A plot of land admeasuring 1762.5Osq. meters were allotted under World Bank Project 26-11-1992. The Maharashtra Housing and Development and Aut/7orifr had approved 54 members for the plot by a letter dated 18-08-1994. The 54 members formed a cooperative housing society under the name "Versova Sandeep Sarovar Cooperative Housing Society Ltd.
The appellant is a registered co-operative housing society, registered on 06-09-1994. From the beginning the society's accounts were neither finalized nor audited in any of the financial year. There were also many administrative lapses on the part of the committee, which resulted in appointment of an administrator by the Deputy Registrar of co-operative Societies. One Mr. Pralap G Desai had taken over the administration of the society on 31-12-1999.
In 2001, some of the members took over as office bearers of the society. As accounts were not finalized no audit was carried out by the society. However, the administrator appointed a certified auditor, Mr. Pramod G Shiral, the Government Auditor. To audit the society's accounts, he had prepared statement of affairs for the period 06-09-1 994 to 31 -03-2006 and had given a consolidated statement of affairs as on 31 -03-2006. The Government Auditor himself while referring to the balance sheet for the period ended 31-03-2006, had expressed in his report as under:
"As the books of accounts were not maintained properly and not giving detailed information as required by the law, I am unable to confirm the correctness of the books of accounts maintained by the society."
In spite of this remark, the Government Auditor had prepared a balance sheet as on 31-03-2006, forming part of his audit report, but not signed either by himself or by any of the committee members. The balance sheet contained the following figures, among others, on the credit side of the balance sheet:
Particulars Amount Subscription from Members for land & building 9,04,39,840.00 Subscription from Members for shops 64,80,000.00 Subscription from Members for Pre-Const. Exp. 1,06,72,460.00 Subscription from Members for parking deposit 1,40,000.00 10,77,32,300.00 Current liabilities and provisions 29,38,235.90 Suspense Account 3,85,42,805.00 Difference in the trial balance 4,58,623.65 Income and Expenditure Account 32,227.25 The Balance Sheet contained the following figures, among others, on the debit side of the balance sheet.
Particulars Amount Land and Building 8,32,57,313.00
Dues from Members towards Land & Building 2,93,53,658.65 Dues from Members towards maintenance 2,23,265.35 2,95,86,904.00 Suspense Account 3,64,83,618.00 6 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 Background of the Assessment Proceedings:
For the relevant assessment year 2006-07, the Assessing Officer had expressed that as he had reason to believe that income had escaped assessment within the meaning of provisions of section 147 of the Income Tax Act; he had served a notice dated 31 -12- 2010 u/s 148 on 11-01-2011 to the appellant to file return of in come. Thereafter, a second notice dated 21-09-2011 was served on the appellant requesting to file return of income immediately. In response to this, the appellant filed a letter on 04-10-2011 explaining the reasons for not fifing return of income and not attending to the Assessing Officer.
Then, the appellant was asked, vide letter dated 26-11-2011, to attend to his office along with supporting documents by 01 -02-2011. On this letter, it was also informed to the Appellant that failure to comply with this letter will result in the Assessing Officer completing the assessment u/s 144 of Income Tax Act. When the appellant did not file any return nor filed any details, the Assessing Officer completed the assessment u/s 144 of the Income Tax Act.
The Assessing officer, for the purpose of completing the assessment, estimated an income of Rs.2,95, 86,900.00 being the contributions receivable from members towards building construction and towards maintenance. Since the appellant had not given any explanation in respect of the amount collected. The Assessing Officer treated this as unexplained cash credit u/s 68 of the Income Tax Act. Therefore, the Assessing Officer computed the total income tax of the appellant at Ps.2,77,81,459. 00 Our Submissions:
For A. Y. 2006-07, the Learned Assessing Officer has considered this amount, which is an amount receivable from members, as the amount received, we feel that the Assessing officer is rather confused between a par/v/son and cash credits. Madam, at no stretch of imagination can a provision for an income be treated as actual Income. As per section 68 of the Income Tax Act, cash credits are those which are found credited in the books of an assessee maintained for any previous year.
Madam, the assessee i.e. a co-operative housing society, collecting contributions from the members for the purpose of maintenance of the society, any surplus contributions, reflected in the income and expenditure of the society is, subject to certain exceptions, generally exempt on the principle of mutuality. The Learned Assessing Officer has without understanding the principles of accountancy, the considered balances in the balance sheet as income fat one particular assessment year. He has also erroneously estimated income at 10% increase in each of the subsequently assessment years. Thus, we feel that the learned Assessing Officer has made an infructuous demand for all the assessment years.
Madam, the appellant's sincere prayer to your honour is to give an opportunity to submit the balance sheets and income and expenditure, wherever applicable, from the date of registration to 31-03-2008 to the Learned Assessing Officer. The appellant also
7 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 should be given an opportunity to submit relevant available documents so that the learned Assessing Officer can make a proper assessment for all the three years."
5.1 The assessee filed additional evidences on the ground that during the assessment proceedings sufficient time to prepare and furnish relevant details was not granted. The additional evidences were forwarded by Ld. CIT(A) to AO vide letter dated 16/10/2012 the text of which is as under:
"2. The assessment for the above referred assessment years was completed u/s 144 of the I T Act, .1961 determining total income at Rs.2,95,86,900/-, Rs.3,25,45,590/- and Rs.3,57,80,150/- respectively on the basis of Internal Audit Report available on the record for F. Y. 2005-06, as the appellant did not file the return of income, balance sheet along with its annexures and P & L A/c despite several requests made by you. In this regard, lam forwarding here with the written submissions of the AR dated 10-10- 2012 along with its enclosures in respect of the above additions on account of unexplained cash credits u/s 68 of the Act and balance sheet and income and expenditure accounts from the period 06-09-1994 to 31 -03-2006. You are requested to go through the submissions of the assessee and submit your comments or objections, if any, as required under Rule 46A of I T Rules, .1962 You may call for further details, if required, for this purpose."
The AO submitted remand report vide letter dated 29/10/2012, the contents of which are as under:
"The above mentioned assessee has never responded to any of the notices Issued during the course of assessment proceedings far A. Y. 2006-07, 2007-08 & 2008-09. In spite of enough opportunities being given, the assessee failed to submit the basic details i.e. Income / Expenditure & Balance Sheet for the relevant assessment years. Thereafter, the assessment was completed ex-parte u/s 144 of the Act, 28-12-2011 on the basis of the internal audit report prepared by the statutory auditor on the panel of BMC, since it was getting time ban-ed by limitation. As per his report, during the F. Y. 2005-06, the assessee has received an amount of Rs.2,95,86,909/- towards building repairs and maintenance. Since the assessee failed to give any explanation in respect of the amount collected, the same was correctly taxed as unexplained cash credit u/s 68 of the Income Tax Act, 1961.
As per section 2(12A) of the Income Tax Act, 1961 books includes ledgers, day books, cash books, account books and other books, whether kept in the written form or as print outs of data stored in floppy, discs, tape or any other form of electro - magnetic data storage device. In Central Bureau of Investigation V/s V.C. Shukla (1998) 3 SCC 410, the Supreme Court has held that "Book" ordinarily means a collection of sheets of paper or other material, blank, written or printed, fastened or bounded together so as to form a material whole. Thus, spiral notebooks and spiral pads can be regarded as "books" within the meaning of section 34 of the Indian Evidence Act, 1872.
8 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 In the instant case, the internal audit report is prepared by a statutory auditor appointed by the BMC The statutory auditor has submitted the report on the basis of documents, ledgers, accounts etc., presented by the assessee. The assessee has never challenged the internal auditors report or brought out of the discrepancies, If any, in the same, during the course of assessment proceedings. The internal audit report is an authentic report, which is duly signed & dated and based on facts. The onus lies on the assessee to prove that it is not a cash credit as held by the Supreme Court in the case of Rishan Di Hatti Vs CIT (1977) 107 ITR 983 (SC).
It is further observed from the Income / Expenditure Account & Balance Sheet submitted now, neither it is signed or dated. As such it does not have any authenticity. It is further submitted that the assessee's case for A. Y. 2009-10 is also under scrutiny & no submissions have been made till date in response to the notices issued on 28-03- 2012, 25-07-2012 and 09-10-2012. Even the ROI for A. Y. 2009-10 is not filed till date.
As per Rule 46A(1), the appellant shall not be entitled to produce before the (Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the (Assessing Officer) except in the following circumstances, namely:
a) Where the (Assessing Officer) has refused to admit evidence which ought to have been admitted; or
b) Where the appellant was prevented by sufficient cause from producing the evidence, which he was called upon to produce by the (Assessing officer) or
c) Where the appellant was prevented by sufficient cause from producing before, the (Assessing Officer) any evidence, which is relevant to any ground of appeal; or
d) Where the (Assessing Officer) has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal.
In view of the above stated rule, I object to the assessee's plea for production additional evidence on the following grounds:
i. Since the assessee never produced these documents during the course of assessment proceedings the question of refusing to admit the evidences does not arise.
ii. The appellant has not made out any new case to prove that it is pre vented by sufficient cause to submit these details. As per appellant's own submission on failure on the part of the appellant to do its duties, the administrator had to appoint a Govt. Auditor who prepared the accounts for the period 06-09-1 994 to 31-03-2006. This report is submitted by the auditor in October, 2006. However, till the date of completion of assessment proceeding on 28-12-2011 i.e. for over five years, the assessee has never disputed the state auditor's report or reconciled the discrepancies, if any.
9 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 iii. As stated earlier enough opportunities have been provided to the appellant during the course of assessment proceedings. Even at present the assessee has not filed any details for the notices issued on 28-03 -2012, 25-07-2012 and 09-
10-2012 for A. Y. 2009-10, which is under scrutiny."
In response to aforementioned remand report of the AO the submissions of the assessee made before Ld. CIT(A) were as under:
"The Learned Assessing Officer had assessed the above income based on the statement of affairs prepared by the government nominated auditor. In this connection, your appellant submits that the same statement of affairs has been addressed to the administrator of the society, wherein the period of such report has been mentioned as 06-09-1994 to 31-03-2006. This clearly shows that the amount mentioned in the statement of affairs are not only related to the accounting period corresponding the A. Y. 2006-07 but also includes the period from 06-09-1994 to 31-03-2003.
Your appellant has further to submit your honour will appreciate that the unexplained amount assessed as cash credit/loan is only assessable and can be added as income of your appellant in the year of receipt, you will appreciate that the amount of Rs.2,95,86,904/- is shown as receivable from the members as on 31-03'2006 and not as received during the year. The above said facts have been clearly and properly shown by the auditor in the statement of affairs as towards assets as receivable, the said auditor a/so mentioned the said figure in para 3 on page 16 of his report. However, the learned Assessing Officer had assessed the said amount u/s 68, which clearly shows the Assessing officer had not applied his mind while framing his assessment based on the statement of affairs. The learned Assessing Officer had also not appreciated the fact that the statement of affairs is for the period from 06-09-1994 to 31-03-2006.
In this connection, your appellant submits that the appellant is a co-operative housing society duly registered under the Co-operative Housing Society Act vide registration No. BOM/MHADA/HS&/8746 of 1994 dated 06-09-1994. The Society was allotted by MHADA to construct residential flats for the members of the Society and accordingly the society has collected funds from the members and construct the residential buildings for the use of residence by the members, The said construction of building had got completed in the year 2004-05 and the members had occupied the said residential flats in the period 2004-05.
The above para dearly shows that the society had collected funds from the members pr/or to 2005 and made payments for plot allotted by MHADA as well as construct/on of buildings for the members. Your honour will appreciate that as per the audited account for the year ended 31-03-2006, the society had collected maintenance charges from the members of Rs.21.l5lakhs and spent the same for members under mutuality concept and have not earned any taxable income during the year under consideration.
The learned Assessing officer has framed his assessment order for A. Y 2007-08 and 2008-09 by increasing the assessed income by 10% and continued to add the 10 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 assessed income for A.Y. 2006-07 in 2007-08 and 2008-09 without appreciating the facts and without application of mind.
Your honour will appreciate that you had asked for a remand report from Assessing Officer vide your letter dated 1 6-10-2012. Your appellant through an Authorized Representative, CA, Mr. Shankar Iyer, has approached the Assessing officer and enquired about the requirements for the remand report. The Learned Assessing Officer has curtly informed the AR that the assessment records for A. 2006-07, 2007-08 and 2008-09 had gone for revenue audit purposes and he had no records for the time being and he would look into the matter, The learned Assessing officer, has, without giving any opportunity to your appellant hurriedly submitted his report on 29-10-2012 i.e. within a period of 13 days of your letter for the remand report only on the ground that no fresh evidence can be admitted and accepted at the appeal stage. In this connection, the learned Assessing Officer fails to appreciate that your appellant has not submitted nor he could submit any audited accounts during the course of the original assessment u/s.144 and the Learned Assessing officer has failed to appreciate and give further opportunity to a non-profit organization like a co-operative housing society carrying on the activity under mutuality concept. The learned Assessing officer also fails to appreciate that high pitch assessment without appreciating the status of your appellant as a cooperative housing society would not serve any purpose and continued to keep your appellant under pressure for the recovery of his illogical demand for the reasons best known to him.
In view of the above facts your appellant craves to delete the arbitrary additions made by the learned Assessing officer for A. Y.2006-07, 2007-08 and 2008-09 respectively."
5.2 On these submissions, upholding the validity of reassessment proceedings Ld. CIT(A) has confirmed the addition without reference to the additional evidences submitted by the assessee on the basis that assessee was given sufficient time and opportunity to furnish copy of returns filed, the details of constitution of society, bank account maintained by the society etc. The addition made by the AO was based on the balance sheet . There was continuing non-compliance by the assessee. The assessee has not been able to establish genesis of these funds but only stated that these amounts were carried over from the previous year's account. For these reasons Ld. CIT(A) has upheld the addition for each of the year. The assessee is aggrieved and has raised aforementioned grounds.
11 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09
6. Ld. AR submitted that assessee was prevented by reasonable cause for not submitting required details during the course of assessment proceedings and reference for that can be made to the reply of the assessee which is reproduced in the assessment order itself. He submitted that during the course of first appellate proceedings the assessee could get its accounts audited and those audit reports submitted have been ignored by Ld. CIT(A) despite calling remand report from the AO. He submitted that the assessment is contrary to the facts as the entire amount which is assessed was shown receivable on account of building repair and towards maintenance. He submitted that entire amount could not be assessed. He also submitted that for other years the figure has been taken from the internal audit report for A.Y 2006-07 and for other assessment years 10% increase has been made to assess the income which is contrary to the record and has no supporting evidence to assess such income. He submitted before us following fact sheets. The copies of the documents mentioned in the fact sheets are available in the paper book.
BRIEF FACTS
1. Reasons as to why the details required by Assessing Officer could not be filed/submitted during the course of Assessment Proceedings. The assessee was in great difficulty as its accounts were neither prepared not audited. The brief facts are as under:
I) Dated 06/04/1993 Allotting a piece of land Pg. No.6 to 8 II) Dated 30/09/199 Possession of plot was handed over and lease agreement entered as well premium paid - Pg.14 III) Dated 02/05/1995 Commencement certificate received. Pg. 35 to 42 IV) Dated 03/02/1996 Sanction from fire brigade Pg. 43 to 46. V) Dated 28/11/2004 Since substantial number of members had occupied, the flats and no maintenance was done by previous committee as mentioned in details at page no.1 & 2 of the paper book an adhoc committee was formed to look after day-to-day affairs.
VI) Dated 04/08/2005 to Election officer was appointed by Dy. Registrar to hold 14/09/2005 the elections and elections held. Pg. 64 to 66 VII Dated 15/10/2005 The new committee issued notices to chief promoter Mr. D.K. Kolambkar ex-secretary to hand over the records documents and papers of the society along with the audit reports. Pg. 68 12 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 VIII) Dated 19/10/2005 Mr. Kolambkar replied saying that necessary documents will be handed over to the newly elected committee on or before 15/11/2005 Pg. 69 to 70.
IX) Dated 02/12/2005 Mr. Kolambkar's letter to Dy. Registrar stating that due to unavoidable circumstances, he was not able to handover the records by 15/11/2005 and then on 30/11/2005 he went to secretary of newly elected committee who is said to have refused to take the records saying that he doesn't require the same and even had reported to police. He further informed the Dy. Registrar that now he would hand over the same to his office. Pg. 71.
X) Dated 03/12/2005 Mr. Kolambkar's letter to the chairman of the society informing that he would hand over the records in the office of the Dy. Registrar and the concerned chairman should take it from there after informing him in writing. Pg. 72 XI) Dated 05/12/2005 As Mr. Kolambkar had not submitted any records society wrote a letter to the Dy.Registrar complaining about the same to the Dy. Registrar. Pg. 73 to 78 XII) Dated 24/12/2005 Society's letter to Mr. Kolambkar for handing over the records/audit reports to its. Pg. 79 to 81 XIII) Dated 18/01/2006 Letter from Dy. Registrar to Mr.Kolambkar for submitting the records. Pg. 82 XIV) Dated 05/02/2006 The office bearers of the society submitted resignation for the reasons of non co-operation of members and vested interest by a few members . Pg. 83 XV) Dated 17/02/2006 Registration of the members accepted by Dy. Registrar and appointment of administrator. Pg.84 to 85 XVI) Dated 24/03/2006 Board of administrations was appointed by Dy.
Registrar comprising of three members but subsequently changed to two members by dropping one member. Pg.
86 to 87 XVII) Dated 22/08/2006 Board of administrator (Shri C.G. Salvi) to Mr. Kolambkar demanding for copies of sanctioned and approved plans building, letter of allotment made to members and original audit reports upto 2003-04. Pg. 90 to 91 XVIII) Dated 19/10/2006 Dy.Registrar writes to administrator to prepare a final list of members start elelction process and thereafter appoints new administrator Shri Vasant Shinde after dissolving the entire board Pg. 92 XIX) Dated 29/4/2007 to Election process started by announcing the schedule, 16/10/2008 and appointment of election officer. Pg. 95 to 96 XX) Dated 07/11/2008 As previous administraor's appointed on 12/10/2007 work was not found satisfactory new administrator was appointed Pg. 97.
XXI) Dated 18/04/2009 Special general body meeting of administrator's was held and where it came to light that he did not have any information about the accounts, status of audit report and the work done by previous administrator Mr. Sanjay 13 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 Kolge. Pg. 98 to 102.
XXII) Dated 26/07/2009 to Special general body meeting held, names were 05/09/2007 suggested for the committee and committee formed. Pg.
103 to 111 XXIII Dated 07/02/2010 First extra ordinary general body meeting of the new committee held after taking over the society's administration from the administrator.
From the above it can be seen that the present committee has effectively taken over the charge only from 07/02/2010, and hence they could not get the accounts prepared by the time.
2) Notice u/s. 148 dated 31/12/2010 served on 11/01/2011 for A.Y's 2006-07 to 2008-09 were received in response to which no returns were filed.
3) Thereafter notice u/s. 143(2) and 142(1) were issued in response to which assessee society gave a detailed reply vide letter dated 04/10/2011 which the Learned Assessing Officer has been kind enough to reproduce at page 2 of the Assessment Order where in brief it is submitted that since society did not have any records as it was being administered by the Administrator for most of the period it is not possible to file the returns. However the society had even requested to the Deputy Registrar for extension of AGM date due to non-finalisation of old accounts for F.Y. 2010-11 for AGM purposes.
4) From the above it can be seen that assessee society has been consistently making efforts to collect the records from its ex-secretary who was the chief promoter of the society and had all the records with him. But inspite of their best efforts including making complaints to the Deputy Registrar of Co-operative Societies was not provided the same was prevented by sufficient cause both for not being able to file the returns as also providing the details.
5) The Learned Assessing Officer did not appreciate the fact that during relevant previous years present Managing committee which was not in existence had not received any previous records for which it had taken all the efforts and as such assessee deserves to be given an opportunity to present its case on the basis of new Balance Sheets, Income and Expenditure A/cs. Etc. which have been got prepared by an approved Auditor (under the Societies Act) with whatever details it had.
Besides, the society had filed audited accounts for individual assessment years before the Hon'ble CIT(Appeals). The Learned CIT(A) forwarded the same to the Learned A.O. for Remand Report. However, the Learned A.O. stated that as the assessee has not submitted the statement of Accounts at the time of assessment, it cannot now be accepted. Hence the CIT(A) refused to accept the additional evidence produced before the Learned CIT(A).
It is prayed that the assessment 'be set aside, as the said evidences are now produced before this Hon'ble Tribunal.
Regarding the merits of the case it is further submitted that the additions made u/s. 68 are the amount receivable by the society from its members for construction as well as maintenance. Besides, this was a consolidated account prepared for over 12 years and hence 14 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 this cannot form part of any addition. Besides every year 10% addition has been made by the A.O. which is unknown as per principles of accountancy."
6.1 Thus it was pleaded by Ld. AR that in the interest of justice the matter should be restored to the file of AO with a direction to frame denovo assessment after giving the assessee reasonable opportunity of hearing and placing all the materials on record.
7. On the other hand, Ld. DR relied upon the order passed by Ld. CIT(A). Ld. DR pleaded that in absence of any details filed by the assessee in response to queries raised by the AO the assessments were rightly frame under section 144 of the Act and these assessments have rightly been confirmed by Ld. CIT(A).
8. We have heard both parties and their contentions have carefully been considered. Keeping in view the facts and circumstances of the case, we are of the opinion that assessee was prevented by reasonable and sufficient cause for not producing the relevant details during the course of assessment proceedings. All these details were furnished during the course of first appellate proceedings. In our considered opinion those details were required to be taken into consideration for adjudicating the appeal of the assessee. For the clarity of facts replies of the assessee and other contents have already been reproduced in the above part of this order. In this view of the situation, we are of the opinion that the request made by the Ld. AR should be accepted in the interest of justice. Accordingly, we restore all these matters to the file of AO with a direction to frame denovo assessment in respect of all the three years after giving the assessee a reasonable opportunity of hearing. The assessee will place all the material on record which will be helpful in framing the lawful assessment for all the years under consideration. We direct accordingly.
8.1 As we are restoring these assessments to the file of AO for denovo assessment as per directions given above we do not consider it necessary to go into each of the 15 आयकर अपील सं. / ITA No.4388 TO 4390/MUM/2013 नधारण वष /Assessment Years 2006-07 to 2008-09 grounds as all these issues have to be considered by the AO while framing the denovo assessment.
9. In the result, for statistical purposes, all these appeals filed by the assessee are treated to be allowed.
Order pronounced in the open court on 13/11/2013 आदे श क घोषणा खले ु यायालय म दनांकः 13/11/2013 को क गई ।
Sd/- Sd/-
(डी. क णाकर रावु / D.KARUNAKARA RAO) (आय.पी. बंसल / I.P. BANSAL)
लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER
मंुबई Mumbai; दनांक Dated 13/11/2013
आदे श क त ल प अ े षत/Copy
षत of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु (अपील) / The CIT(A)-
4. आयकर आयु / CIT
5. वभागीय त न ध, आयकर अपील य अ धकरण, मंुबई / DR, ITAT,
Mumbai
6. गाड फाईल / Guard file.
आदे शानसार
ु / BY ORDER,
स या पत त //True Copy//
उप/सहायक
उप सहायक पंजीकार (Dy./Asstt. Registrar)
आयकर अपील य अ धकरण,
धकरण मंब
ु ई / ITAT, Mumbai
व. न.स./Vm, Sr. PS