KILLE PANHALA GAD SHIKSHAN SANSTHA,KOLHAPUR vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE,, KOLHAPUR

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ITSSA 44/PUN/2022Status: DisposedITAT Pune19 January 2023AY 2012-134 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) had properly analyzed the notings found in the loose sheets during the search operations. The CIT(A) found that the assessee had incurred unexplained expenditure on the construction of its building. In the absence of any plausible explanation from the assessee, the CIT(A) confirmed the addition of Rs. 66,07,900/- (which appears to be a summation of the initial addition and the enhancement). The Tribunal found the CIT(A)'s order to be just, proper, and reasonable, not warranting any interference. Therefore, the Tribunal found no merit in the assessee's grounds of appeal. The operative direction was that the appeal filed by the assessee stands dismissed.

What were the facts?

The assessee, Kille Panhala Gad Shikshan Sanstha, is a society formed for imparting education. A search and seizure operation was conducted on Shri Ramchandra Maruti Mohite, during which documents pertaining to the assessee were found. Based on these, a notice under section 142(1) was issued, and the assessee filed a return declaring Nil income, claiming exemption under section 11. The Assessing Officer, citing unexplained expenditure related to building construction and international schools found in loose papers, completed the assessment under section 143(3) read with section 153C, making an addition of Rs. 10,00,000/- for assessment year 2012-13. The CIT(A) enhanced this addition to Rs. 56,07,900/- due to the assessee's failure to respond to notices.

What were the issues?

1. Whether the addition of Rs. 10,00,000/- made by the Assessing Officer under section 143(3) read with section 153C, based on documents found during a search on a third party, is justified? The assessee's contention, though not explicitly stated due to non-appearance, would likely be that the addition is not sustainable without proper evidence and opportunity. The revenue's contention, as upheld by the lower authorities, is that incriminating material found during the search indicated unexplained expenditure by the assessee, warranting the addition. 2. Whether the enhancement of the addition by the CIT(A) to Rs. 56,07,900/- is justified, given the assessee's failure to respond to notices? The assessee's likely contention would be against the enhancement without proper adjudication. The revenue's contention, as accepted by the CIT(A), is that the enhancement is justified due to the assessee's non-compliance and the existence of unexplained expenditure.

Which sections of the Income-tax Act were involved?

Section 142(1),Section 11,Section 143(3),Section 153C

AI-generated summary — verify with the full judgment below

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

Before: SHRI INTURI RAMA RAO & SHRI S. S. VISWANETHRA RAVI

For Respondent: Shri Keyur Patel
Hearing: 10.01.2023Pronounced: 19.01.2023

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / IT(SS)A No.44/PUN/2022 िनधा�रण वष� / Assessment Year : 2012-13 Kille Panhala Gad Shikshan Vs. ACIT, Central Circle, Sanstha, Kolahpur. 17-E, Shiv Parvati, Nagala Park, Kolhapur- 416003. PAN : AAATK5838L Appellant Respondent Assessee by : Adjournment Application (Rejected) Revenue by : Shri Keyur Patel Date of hearing : 10.01.2023 Date of pronouncement : 19.01.2023 आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)- 11, Pune [‘the CIT(A)’] dated 09.03.2022 for the assessment year 2012-13. 2. Briefly, the facts of the case are that the appellant is a society incorporated under the provisions of Maharashtra Societies Act. It was formed for the purpose of imparting the education. The search and seizure operations were conducted u/s 132 on 25.08.2011 and 26.08.2011 in the residential as well as business premises of one

2 IT(SS)A No.44/PUN/2022 Shri Ramchandra Maruti Mohite. During the course of such search and seizure operations, certain incriminating documents pertaining to the appellant were stated to have been found and based on these incriminating materials, a notice u/s 142(1) dated 02.08.2013 was issued calling upon the appellant to file the return of income. In response to the said notice, the appellant filed the return of income on 27.03.2014 declaring Rs.Nil income after claiming exemption of income u/s 11 of the Act. Against the said return of income, the assessment was completed by the Asstt. Commissioner of Income Tax, (Central) Circle, Kolhapur (‘the Assessing Officer’) vide order dated 28.03.2014 passed u/s 143(3) r.w.s. 153C of the Income Tax Act, 1961 (‘the Act’) at total income of Rs.10,00,000/- based on the material found in the premises of said Shri Ramchandra Maruti Mohite pertaining to the appellant. It is stated that the certain loose papers related to the miscellaneous expenses decoded details to the project, building, four international schools, which indicated the incurring of expenditure outside the books of account remain unexplained. Accordingly, the Assessing Officer made addition of Rs.10,00,000/-. 3. Being aggrieved by the above addition, an appeal was filed before the ld. CIT(A), who vide impugned order enhanced the

3 IT(SS)A No.44/PUN/2022 addition of Rs.56,07,900/- on the ground that despite several opportunities given to the appellant, the appellant had failed to respond to such notices. In the circumstances, the ld. CIT(A) while confirming the assessment order enhanced addition by Rs.56,07,900/-. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. 5. When the matter was called on, none appeared on behalf of the appellant-assessee despite due service of notice of hearing. Therefore, we proceed to decide the issue in appeal after hearing the ld. CIT-DR. 6. We have carefully gone through the order passed by the ld. CIT(A). We find that the ld. CIT(A) had analyzed the notings found in the loose sheets during the course of search and seizure operations in the premises of said Shri Ramchandra Maruti Mohite and gave a finding that the assessee had incurred unexplained expenditure on the construction of building belonging to the appellant, in absence of any plausible explanation from the assessee, the ld. CIT(A) confirmed the addition of Rs.66,07,900/-. Thus, we find that the order of the ld. CIT(A) is just, proper and reasonable

4 IT(SS)A No.44/PUN/2022 and does not warrant any interference by us. Accordingly, we do not find any merit in the ground of appeal filed by the assessee. 7. In the result, the appeal filed by the assessee stands dismissed. Order pronounced on this 19th day of January, 2023. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 19th January, 2023. Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A)-11, Pune. 4. The Pr. CIT (Central), Pune. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.

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