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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI SHAMIM YAHYA
This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-38, Mumbai (in short ‘CIT(A)’) dated 30.01.2019 and pertains to Assessment Year 2012-13.
The grounds of appeal read as under :-
“1) The Ld. CIT(A) has erred in law and on the facts of the case in confirming the action of the Assessing Officer in taxing voluntary contributions received from members amounting to Rs.20,45,000/-. The action is unjustified and unwarranted and against the principle of mutuality.
2) The Ld. CIT(A) has erred in law and on the facts of the case in not admitting the Assessee’s claim in the appellate proceedings regarding non-taxability of Kohinoor City ‘A’ Co-op. Hsg. Society Ltd. Rs.20,45,000/- received from members on account of principle of mutuality. The action is unjustified and unwatted.”
Brief facts of the case are that assessee is a Co-operative Housing Society, providing services to its members who are flat owners of the society. The major source of income of the society is maintenance charges, non- occupancy charges, car parking charges, no objection certificate charges etc. received from the members. The assessee filed return of income for the A.Y 2012-13 electronically on 17.10.2012 declaring total income at Rs.22,54,250/-. The return was duly processed u/s. 143(1) of the Income Tax Act, 1961. Thereafter, the assessee filed Revised return of income on 01.04.2013, declaring total income of Rs.2,09,250/-. Subsequently, under CASS, the case was selected for scrutiny and accordingly, a notice u/s 143(2) of the Income Tax Act, 1961 was issued to the assessee on 03.09.2014 and served on the assessee. During the course of assessment proceedings, the assessee was asked to furnish certain details, vide questionnaire issued along with notice u/s 142(1).
The Assessing Officer observed that it is seen from the record that the assessee has filed return of income for A.Y 2012-13 on 17.10.2012 declaring total income at Rs.26,16,525/- which is its first and the original return of income. Subsequently, the assessee filed another revised return of income on 01.04.2013 declaring total income at Rs.2.09,250/- after deducting Major Repair Fund receipts from its members of Rs.20,45,000/-, standard deduction of Rs.50,000/- u/s 80P(2)(c) and interest income from Co-operative Banks of Rs.3,62,275/-. Since the original return of income filed by the assessee is belated, the subsequent return of income filed on 01.04.2013 claiming Major
Kohinoor City ‘A’ Co-op. Hsg. Society Ltd. Repairs Fund receipts from its member of Rs.20,45,000/- is prima facie now allowable as the assessee has not claimed the same in the first return of income filed on 17.10.2012.
Vide order sheet noting dated 30.01.2015, assessee was asked to explain why the said claim of Rs.20,45,000/- should not be disallowed as the same was not claimed in the original return of income filed belated not claiming the amount of Rs.20,45,000/-. In this regard, the assessee’s representative vide letter dated 06.02.2015 stated that the assessee has filed Income Tax Return of A.Y 2012-13 vide acknowledgement No. 504449150290912 on 29.09.2012. The ITR and ITR-V of that return is attached. But, the assessee does not have e-receipt of the same. The due date of filing return for the assessee is 01.10.2012 as it is required to get its accounts audited under Co-operative Societies Act. After that, assessee has filed revised return vide acknowledgement No. 513943340171012 on 17.10.2012 to correct some errors in the original return. After that, assessee came to know about one judgment of Jal Darshan CHS Ltd vs The Income-tax Officer and as per that it had again filed revised return on 01.04.2013. The CPC has considered the return filed on 17.10.2012 as original return.
The submission of the assessee is duly considered, but the same is not acceptable for the simple reason that the revised return of income cannot be taken cognizance of u/s 139(5) of the Act since the original return of income was not furnished within the time stipulated u/s 139(1) of the Act. A claim involving substantial amount of deduction should be supported by a return of income filed as per the provisions of section 139 or section 139(5) in particular. But, no such return has been filed for the fresh claim of Rs.20,45,000/- as Kohinoor City ‘A’ Co-op. Hsg. Society Ltd. mentioned above. Accordingly, the Assessing Officer proceeded to disallow the claim of deduction of Rs.20,45,000/-.
Upon assessee’s appeal, learned CIT(A) did not adjudicate upon the merits, but dismissed assessee’s appeal on preliminary ground of not having raised the claim by way of return of income as under :-
“7.1 The grounds of appeal on a careful and considerate perusal reveal that the appellant is aggrieved with the action of the AO in not granting the impugned deduction claimed by the appellant u/s 80P. However, I find that there is preliminary issue that needs to be resolved before dwelling upon the merits of the claim of the deduction u/s 80P.
7.2 It is seen that this issue is as to whether or not the appellant is entitled for deduction u/s 80P when the same was not claimed in the original return of income for the assessment year 2014-15 under consideration. Further, I find from the facts on record that neither did the appellant claim the impugned deduction u/s 80P in the original return of income, not was the claim lodged with the AO before the due date for filing the revised return of income in tune with the provisions of section 139(5) of the Act. This being so it is undisputed fact that the claim was made for the deduction u/s 80P only at the time of assessment proceedings before the AO. Therefore, I find further that the AO, inter-alia denied the deduction as an additional claim based on the judgment of the Hon'ble Apex Court in the case of Goetze (India) Ltd.
7.3 It is learnt from the submission of the appellant and from the perusal of the copy of original ITR, that the original Return itself filed on 29th September 2012 vide ack no. 504449150290912 is filed belatedly the due date being 31.08.2012 for the instant assessment year, 2012-13. Hence it is not proper on the part of the appellant to argue that merely because the copy of acknowledgement is missing at the time of assessment, justice has been taken away from the assessee. In fact, the learned Income Tax Officer accessed the data base of his office and confirmed the above facts that the Return is filed belatedly and the appellant did not make a claim for deduction
Kohinoor City ‘A’ Co-op. Hsg. Society Ltd. u/s 80P in the original return and based on this fact duly denied the deduction in accordance with law. It would have been a different situation had the appellant claimed the impugned deduction u/s 80P at least before the due date for filing revised return as per section 139(5). But that was also not done. Further, I have duly considered the submissions of the appellant. However, from due perusal of the same it is seen that no cogent argument is made as to why the appellant did not claim the impugned deduction in the original return or within the time given for revising the return u/s 139(5).
7.4 Hence, it is pertinent to note that had the appellant intended to put forth the facts in the correct perspective, it could have very well properly claimed the deduction as per law which it did not do so. Therefore, I hold that in consonance with the Apex Court decision in case of Goetze (India) Ltd., there is nothing irregular in the order of the AO to deny the appellant the deduction. Consequently, this issue is decided against the appellant and the grounds in this regard are dismissed.”
Against the above order, assessee is in appeal before the ITAT. I have heard both the parties and perused the records. I find that the solitary reason given by the learned CIT(A) in confirming the disallowance is that the same was not claimed properly by way of return of income. The merits have not been decided by the learned CIT(A).
I find that in the Hon'ble Supreme Court decision in the case of Goetze India (supra), which the learned CIT(A) has relied upon, it was clearly mentioned by the Hon'ble Supreme Court that their decision would not impinge upon the jurisdiction of ITAT to entertain claims other than that filed to revise return of income.
Accordingly, in the interest of substantial justice, the ground raised by the assessee is duly admitted. The learned CIT(A) is directed to consider the merits of the assessee’s ground and thereafter pass a speaking order on the Kohinoor City ‘A’ Co-op. Hsg. Society Ltd. merits of assessee’s claim. Needless to add, assessee should be granted adequate opportunity of being heard.
In the result, appeal by the assessee stands allowed for statistical purposes.
Order pronounced under Rule 34(4) of the ITAT Rules on 23rd November, 2020.