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Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI
Before: SHRI CHANDRA MOHAN GARG
This appeal by Assessee has been directed against the order of the Ld. CIT(A)-14, New Delhi, dated 12.03.2020, relating to the A.Y. 2011-2012.
Briefly stated facts of the case are that the assessee is a CGHS society which had deposited a sum of Rs.11,50,000/- in Punjab National Bank during the assessment year under consideration and an AIR information has been received by the A.O. about the cash
2 ITA.No.1669/Del./2020 The Gulistan Co-OP Group Housing Society Limited, New Delhi. the said cash deposit by the assessee society. Therefore, the A.O. issued letter dated 12.02.2018 to the assessee society to explain about the cash deposit in the bank account. Since, there was no reply from the side of assessee society, the A.O. noted an amount of Rs.23 lakhs has been escaped assessment for failure on the part of assessee society under section 147 of the I.T. Act, 1961. In order to verify the above transactions, the case was reopened by the A.O. under section 148 of the I.T. Act, 1961 after obtaining necessary approval from the Pr. Commissioner of Income Tax, Delhi- 14, New Delhi. Thereafter, statutory notices under section 148 and 142(1) of the I.T. Act, 1961 were issued to the assessee on various occasions. Since, the assessee did not respond to the above statutory notices, the A.O. made an addition of Rs.11,50,000/- in the hands of assessee society as unexplained income from undisclosed sources under the Head “Income from other Sources” and completed the assessment proceedings under section 144 r.w.s. 147 of the I.T. Act, 1961. The A.O. also initiated penalty proceedings under section 271(1)(c) of the I.T. Act separately.
3 ITA.No.1669/Del./2020 The Gulistan Co-OP Group Housing Society Limited, New Delhi. 2.1. Aggrieved by the ex-parte order of A.O, the assessee carried the matter in appeal before the Ld. CIT(A) who vide order dated 12.03.2020 passed under section 144 of the I.T. Act, 1961, confirmed the addition made by the A.O.
Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before us and has raised the following grounds :
1. “That the order of the CIT(A) is bad in law and preserve as the same has been passed .without considering the submission of the Appellant, considering the relevant facts on record, without giving proper opportunity of hearing and taking a pragmatic view of the matter.
2. That the CIT(A) has erred in aw a nr in facts in confirming the reassessment order of the AO, without considering that the entire initiation of the reassessment proceedings U/s 147/148 of the Income Tax Act, 1961 is bad in law and void ab initio.
4 ITA.No.1669/Del./2020 The Gulistan Co-OP Group Housing Society Limited, New Delhi.
3. That the CIT(A) has erred in law in confirming the disallowance amounting to Rs.11,50,000/- made by the AO U s 68 of the Income Tax Act, 1961.
4. That the CIT (A) has erred in aw ano on facts in not considering that the provisions of section 68 of the income Tax Act, 1961 are not applicable to the facts of the present case.”
That the Appellant humbly craves leave to add, alter, modify or revise any grounds of appeal.
From the careful perusal of the appeal record, we noticed that the appeal is time barred by 146 days.
5. The Learned Counsel for the Assessee filed an affidavit seeking for condonation of delay by contending, inter alia, that the delay in filing the present appeal is due to outbreak of the Covid-19 pandemic. He submitted that the order of Ld. CIT(A) was received by him on 17.03.2020 and the appeal was filed before the Tribunal on 09.10.2020. He submitted that the Hon’ble Supreme Court in the case of Cognizance for Extension of Limitation in Suo Motu Writ Petition (C) No.3 of 2020 dated 23.03.2020 directed for 5 ITA.No.1669/Del./2020 The Gulistan Co-OP Group Housing Society Limited, New Delhi. extension of the period of limitation in all proceedings before Courts/Tribunals w.e.f. 15.03.2020 and the said order was extended to 14.03.2021 vide order dated 08.03.2021. In view of the above facts, he prayed the Tribunal for condonation of delay in filing the appeal before the Tribunal.
The Ld. D.R. on the other hand did not strongly object for condonation of delay.
We have heard the Learned Representatives of both the parties and perused the material on record. We find that the Hon’ble Supreme Court has extended the period of limitation in all proceedings before Courts/ Tribunals due to outbreak of Covid-19 pandemic vide order dated 15.03.2020 (supra). In view of the above orders of the Hon’ble Supreme Court, the appeal of the assessee society is not time barred and it is well within the limitation period, as the limitation period was extended by the Hon’ble Supreme Court till 14.03.2021. We, therefore, respectfully following the Order of Hon’ble Supreme Court dated 23.03.2020 and 08.03.2021 (supra), condone the delay of 146 days in filing
6 ITA.No.1669/Del./2020 The Gulistan Co-OP Group Housing Society Limited, New Delhi. the appeal before the Tribunal and proceed to decide the appeal of assessee society on merits.
During the course of hearing, the Learned Counsel for the Assessee, at the very outset, did not press ground of appeal nos.1 and 2, to which, the Ld. D.R. has no objection. We, therefore, dismiss ground of appeal nos.1 and 2 as not pressed. Ground of appeal no.5 is general in nature, which needs no adjudication.
The ground of appeal nos.3 and 4 which remained for adjudication before us are disallowance of amount of Rs.11,50,000/- made by the A.O. under section 68 of the I.T. Act, 1961.
During the course of hearing, the Learned Counsel for the Assessee drew the attention of the Bench of the written submissions filed by the assessee society contending, inter alia, that the authorities below grossly failed to note and understand that being a Cooperative Group Housing Society the assessee had received total contributions of Rs.10,35,60,900/- during the assessment
7 ITA.No.1669/Del./2020 The Gulistan Co-OP Group Housing Society Limited, New Delhi. year under consideration from all the Members of the Society, of which, only Rs.11,50,000/- were received through cash, which is barely 1% of total receipts of the assessee society solely and exclusively received towards the construction of the flats for its Members. The assessee society had deposited the said sum of Rs.11,50,000/- in the bank account of assessee society. The assessee society had also filed audited balance-sheet during the assessment year under consideration before the authorities below, proof of identity of 03 members of the society from whom the impugned cash was received in form of providing copy of share certificate, certificate of allotment of flat and or copy of sale deed and confirmation from one of the Member and one member has moved out of the assessee society and the other one is a very senior citizen who is not able to listen/support to the assessee society on this issue. He submitted that the assessee society was using the entire amount for construction of flats as is evident from the ITR’s filed and audited balance-sheets submitted to the Ld. CIT(A). He further submitted that the assessee society being
8 ITA.No.1669/Del./2020 The Gulistan Co-OP Group Housing Society Limited, New Delhi. a non-business organisation, may not be asked to establish the source of the Member’s contribution. He submitted that assessee society keep on changing by virtue of sale/transfer of flats through share certificates. Further, the members of the assessee society are also not business concerns and do not intend to submit their bank statements, income tax returns etc., In support of his submissions, the Learned Counsel for the Assessee relied on the decision of Coordinate Bench of Bangalore Tribunal in the case of Bhageeratha Pattina Sahakara Sangha Niyamitha vs., ITO, Ward-3, Davanagere dated 18.02.2022, copy of which, is also placed on record.
The Ld. D.R. on the other hand, strongly relied on the orders of the authorities below and submitted that despite various opportunities granted to the assessee society, the assessee society had not filed documentary evidences to prove the genuineness of the cash deposit in the bank. He submitted that assessee society is a Cooperative Society and, therefore, ‘Society’ is a taxable entity under the provisions of Income Tax Act. The assessee
9 ITA.No.1669/Del./2020 The Gulistan Co-OP Group Housing Society Limited, New Delhi. had been provided ample opportunities before the authorities below and since assessee society failed to discharge it’s onus of proving the source of cash deposit in the bank account, the addition made by the A.O. and confirmed by the Ld. CIT(A) be confirmed.
We have heard the Learned Representatives of both the parties and perused the material on record. We find that the authorities below made the addition in the hands of assessee society to the tune of Rs.11,50,000/- under section 68 of the I.T. Act, 1961. The case law relied upon by the Learned Counsel for the Assessee is distinguishable on facts. As per Section 68 of the I.T. Act, 1961 the onus lay on the assessee is to prove the genuineness and creditworthiness of the transaction. In the instant case, the assessee had deposited the cash in the Bank A/c. He filed the audited balance-sheet before the authorities below stating that the amounts received towards construction of Flats and not as income. Since the assessee cannot do any business and was not doing any business, the amount cannot be treated as income of the society.
10 ITA.No.1669/Del./2020 The Gulistan Co-OP Group Housing Society Limited, New Delhi. Since the amounts in question are not cash credits, the creditworthiness of the creditors is not required to be established. We find force in the submissions of the Learned Counsel for the Assessee. We are of the view that the assessee discharged its onus by proving the genuineness of the Members by filing confirmations before the Ld. CIT(A). Once the assessee furnishes sufficient documents and explanations, it is on the onus of Department to verify the same and act accordingly. The authorities below can summon the Members if they are not appeared on the request of assessee society, but, the authorities below cannot demand the assessee society to prove the source of the source which is one of the conditions stipulated under section 68 of the I.T. Act, 1961 itself. There are plethora of judicial decisions on this issue. We, therefore, set aside the orders of the authorities below and delete the addition made by the A.O. and confirmed by the Ld. CIT(A). Accordingly, ground of appeal nos.3 and 4 of the assessee are allowed.
In the result, appeal of the Assessee is partly allowed.