OAKWOOD CO OP HOUSING SOCIETY,NAVI MUMBAI vs. ACIT CENTRAL CIRCLE 1(3), PUNE, PUNE

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ITSSA 42/PUN/2024Status: DisposedITAT Pune29 July 2025AY 2017-186 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, considering the assessee's contentions, found that several procedural lapses occurred during the assessment proceedings. These included the failure to provide an opportunity for the cross-examination of Mr. Abhay Kumar, the very short period given to the assessee to furnish voluminous details after the satisfaction note was provided on June 22, 2022, the reference to the DVO despite the project being awarded through a tender process, and the suspension of the project for three years due to legal disputes. The Tribunal concluded that the assessee was not afforded sufficient opportunity to plead its case before the Assessing Officer, leading to substantial additions. Therefore, in the interest of justice and fairness, the Tribunal decided to remit all issues raised in the appeals for assessment years 2012-13, 2013-14, 2015-16, 2016-17, and 2018-19 back to the file of the jurisdictional Assessing Officer for de novo adjudication. The AO was directed to provide a reasonable opportunity of being heard, and the assessee was permitted to submit all required submissions and evidence. The impugned orders were set aside, and the effective grounds of appeal were allowed for statistical purposes. The cross-appeals filed by the revenue were also remitted back to the AO.

What were the facts?

The assessee, Oakwood Coop. Housing Society, is appealing against orders of the CIT(A) concerning assessment years 2012-13, 2013-14, 2015-16, 2016-17, 2017-18, and 2018-19. These orders arose from assessment orders passed under section 153C read with section 143(3) or 144 of the Income-tax Act, 1961. The revenue has also filed cross-appeals for assessment years 2012-13 and 2018-19. The assessee society was formed in 2010 for constructing flats for its members. Construction faced delays due to an initial contractor. A new contractor, M/s Arca LLP, was appointed in FY 2015-16. The assessment proceedings were initiated following a search and seizure action under section 132 in the case of M/s Griha Pravesh Buildtake Pvt. Ltd. on March 14, 2018. Notice under section 153C was issued on March 15, 2021. The Assessing Officer (AO) made a reference to the DVO on December 30, 2021, and the assessee responded on June 14, 2022. The CIT(A) partly allowed the appeal for AY 2012-13, restricting additions to Rs. 58,95,000, and upheld the cost of construction addition of Rs. 58,24,312 under section 69C.

What were the issues?

1. Whether the Assessing Officer erred in adding unrecorded receipts amounting to Rs. 4,29,50,000 without supporting documents and without providing an opportunity for cross-examination of Mr. Abhay Kumar and his company, GBPL (Assessee's contention). 2. Whether the Assessing Officer erred in adding Rs. 4,88,45,000 as unrecorded payment, despite the assessee providing ledgers and details of recovery due from a former contractor, Mr. Phadnis (Assessee's contention). 3. Whether the Assessing Officer correctly calculated the rate of tax and the amount of tax and cess (Assessee's contention). 4. Whether the assessment is vitiated due to the AO's failure to allow cross-examination of Shri Abhay Kumar and reliance on his statement and data (Assessee's contention). 5. Whether the AO failed to consider the suspension of construction for three years due to legal disputes with the old contractor, Mr. Phadnis (Assessee's contention). 6. Whether the AO wrongly concluded non-compliance with notices, as the notice dated March 15, 2021, was not served, and a questionnaire and notice dated December 4, 2021, were served later, to which the assessee promptly replied (Assessee's contention). 7. Whether the reference to the DVO was unwarranted given the construction project was awarded through a tender process to M/s Arca Realities (Assessee's contention). 8. Whether the AO failed to provide the satisfaction note and DVO report in advance and accord proper opportunity, with the satisfaction note provided only on June 22, 2022, leaving insufficient time for a detailed reply without cross-examination (Assessee's contention). 9. Whether the AO erred in estimating contributions from society members and making incorrect calculations for addition justification (Assessee's contention). 10. Whether the assessed income is not fact-based or does not belong to the society, making the assessment unjustified (Assessee's contention). Revenue's contentions were not explicitly detailed but supported the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 153C,Section 143(3),Section 144,Section 132,Section 250,Section 69C,Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE

Before: DR.MANISH BORAD & MS.ASTHA CHANDRA

For Appellant: Shri B.S. Indani
For Respondent: Shri Amol Khairnar
Hearing: 23.07.2025Pronounced: 29.07.2025

आदेश / ORDER

PER BENCH :

The captioned appeals at the instance of assessee pertaining to 2017-18, 2013-14, 2015-16, 2016-17, 2018-19 and 2012-13 are directed against the separate orders of Ld.CIT(A), Pune-11 passed u/s.250 of the Income-tax Act,

IT(SS) A Nos.42 TO 47/PUN/2024 and ITA Nos. 2548 and 2549/PUN/2024 Oakwood Coop. Housing Society 1961 (hereinafter also called ‘the Act’) arising out of respective Assessment Orders passed u/s.153C r.w.s.143(3)/153C r.w.s.144 of the Act. Revenue has also filed cross appeals against the separate orders of Ld.CIT(A), Pune-11 passed u/s.250 of the Income-tax Act, 1961 in relation to Assessment Years 2012-13 and 2018-19.

2.

Since common issues have been raised by the assessee as well as Revenue this bunch of appeals, we proceed to dispose these appeals by way of this consolidated order for the sake of convenience.

3.

We will first take up the assessee’s appeal IT(SS) A No.47/PUN/2024 relating to A.Y. 2012-13 as the lead case. Facts of the case as stated in the statement of facts for A.Y. 2012-13 reads as under :

“1. Appellant is a co-operative Housing Society created on 28.01.2010 with object of construction of Flats for own use of members of Oakwood Co-operative Housing Society Ltd. 2. Society purchase the land from market and started the construction for own use of society members. Initial contractor Mr. Phasins could not complete the project and was delay upto 2014- 15. 3. In FY 2015-16 the society appointed a new contractor through Tender and Bidding process. M/s Arca LLP was lowest hence successful bidder. 4. The assessment order was passed u/s.144 r.w.s. 153C of Income Tax Act, 1961. 5. Search and seizure action u/s.132 of Income Tax Act, was conducted in case of M/s Griha Pravesh Buildtake Pvt. Ltd. on 14.03.2018. Mr. Abhay Kumar was the key person of said company. 6. The proceeding u/s.153C of the act was initiated by issuing a notice on 15.03.2021.

IT(SS) A Nos.42 TO 47/PUN/2024 and ITA Nos. 2548 and 2549/PUN/2024 Oakwood Coop. Housing Society

7.

On 30.12.2021 Assessing officer made a reference to DVO for determining the cost of construction.

8.

Response to DVO report was submitted on 14.06.2022.

9.

Seven appeals against the Assessment order for 2012-13 to 2018-19 was filed against the order passed by ACIT Central Circle 1(3) Pune.

10.

C A Mahesh Indani has file the written submission before CIT (A) from time to time and made oral argument during physical hearing conducted on 15.06.2024, 25.06.2024 and 13.09.2024 and CIT(A) passed the order.

11.

CIT(A) partly allow the appeal for AY 2012-13 on account of addition of receipts as well as addition of payments and restricted the addition Rs. 58,95,000/-

12.

CIT(A) upheld the cost of construction u/s 69C as estimated and addition of Rs. 58,24,312/- made.

13.

Having been aggrieved CIT(A) order appeal file before Hon'ble ITAT Pune for relief.”

4.

At the outset, Ld. Counsel for the assessee requested for setting aside the issues raised in the instant appeals to the file of ld. Jurisdictional Assessing Officer for denovo adjudication on account of the following issues :

“3. AO wrongly added unrecorded receipt amounting to Rs.4,29,50,000/-. Не simply copy and pasted the figures without supporting documents. He not accorded opportunity for cross examination of Mr Abhay Kumar and His Company GBPL.

4.

AO further erred in adding amounting to Rs.4,88,45,000/- as unrecorded payment. During the assessment proceedings ledger was provided and recovery was due from Mr.Phadnis because contract was discontinued and same was produced before AO.

5.

Assessing Officer erred to calculate correct rate of tax and amount of tax and cess.

6.

Appellant requested for Cross Examination of Shri Abhay Kumar but not allowed and wrongly relied on his statement and data possessed from him and completed assessment which is not correct and true.

IT(SS) A Nos.42 TO 47/PUN/2024 and ITA Nos. 2548 and 2549/PUN/2024 Oakwood Coop. Housing Society

7.

AO failed to consider that society construction was suspended for three years due to legal disputes with old contractors Mr.Phadnis 8. AO alleged that notice u/s 142(1) along with Show cause notice was issued on 15.03.2021 but failed to make the compliance. We would like to inform you that notice was not served and not received by post but Income tax inspector visited to society and served the questionnaire and notice u/s 142 (1) dated 04.12.2021 as soon as we immediately replied on 05th Jan 2022. The finding of AO that we have not compliance their notices is wrong.

9.

AO referred the case to DVO-2Mumbai which was unwarranted because the entire construction under the project was through the tender process and M/S Arca Realities was successful bidder and contract was allowed to them. When contractual value of project was available the appointment of DVO was wrong.

10.

AO failed to provide satisfaction note and DVO report in advance. Proper opportunity was not accorded. Satisfaction note was provided in month of June-2022 on dated 22.06.2022 and in short period unable to give details reply in absence of cross examination of person u/s 153A and data in his possession. 11. The Assessing officer erred to estimating contribution from society members and wrong calculation has been made for justification of his addition.

12.

The Income assessed as income is not on fact basis or that fact is not belongs to the society hence the AO is not justified in making the assessment on the assessee in respect of income.”

5.

Apart from the above reasons, Ld. Counsel for the assessee mainly stated that very short time was given by ld. Assessing Officer as the satisfaction note was provided on 22.06.2022 and various details were called for multiple years and it was practically not possible to collect all those details and before filing of the required details ld. Assessing Officer concluded the assessment on 04.07.2022.

6.

On the other hand, ld. Departmental Representative supported the orders of the lower authorities.

IT(SS) A Nos.42 TO 47/PUN/2024 and ITA Nos. 2548 and 2549/PUN/2024 Oakwood Coop. Housing Society 7. We have heard the rival contentions and perused the record placed before us. Considering the contentions of ld. Counsel for the assessee and the reasons stated hereinabove which mainly consist of (1) Not providing cross examination of Mr. Abhay Kumar; (2) very short period given for filing the voluminous details; (3) reference to DVO for valuation eventhough the project was through the tender process and (4) the project was suspended for three years due to legal disputes. All other reasons as stated above clearly indicate that sufficient opportunity was not provided to the assessee to plead its case before ld. Assessing Officer resulting into huge additions and therefore, in the interest of justice and being fair to both the parties, all the issues raised in the instant bunch of appeals for A.Yrs.2012-13, 2013-14, 2015- 16, 2016-17, 2018-19 are remitted to the file of ld. Jurisdictional Assessing Officer. Needless to mention that ld.JAO in the course of set-aside proceedings shall afford a reasonable opportunity of being heard to the assessee. Assessee is at liberty to adduce all the required submissions/evidences before ld.JAO to substantiate its case. Assessee is directed to update latest email id and contact detail on ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned orders are set aside and the effective grounds of appeal raised by the assessee in the instant bunch of appeals are allowed for statistical purposes.

8.

Since we have already set aside the impugned orders to the file of ld. JAO for denovo assessment, the cross appeals

IT(SS) A Nos.42 TO 47/PUN/2024 and ITA Nos. 2548 and 2549/PUN/2024 Oakwood Coop. Housing Society filed by the Revenue for A.Y. 2012-13 and 2018-19 are also remitted back to the file of ld. JAO.

9.

In the result, all the appeals filed by the assessee bearing Nos. IT(SS) A Nos. 42 to 47/PUN/2024 and the cross appeals filed by the Revenue bearing Nos. ITA Nos. 2548 and 2549/PUN/2024 are allowed for statistical purposes.

Order pronounced on this 29th day of July, 2025.

Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 29th July, 2025. Satish

आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, 4. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER,

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.

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