Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’: NEW DELHI
ORDER This appeal of the Assessee arises out of the order of the
Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘Ld. CIT(A)’] in DIN & Order No. ITBA/NFAC/S/250/2023-
24/105495345(1) dated 08/08/2023 against the order passed by Income Tax Officer, Ward-2(2)(2), Ghaziabad (hereinafter referred to as the ‘Ld. AO’) u/s 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 18/12/2019. Page 1 of 4 River Heights Phase-1 Association of Apartment Owner vs. ITO 2. The assessee has challenged the addition made on account of cash deposit of Rs.20,82,000/- in the bank account during the demonetization period and addition made on account of other credit entries in the bank account @ 8% thereon.
I have heard the rival submissions and perused the materials available on record. The assessee is a Residential Welfare Association (RWA). The assessee collects maintenance charges from the flat owners and utilizes the same for the purposes of maintenance of the flats through its association. Since, the amounts received are from the members and services are in turn rendered also to the members, income earned by the association would be exempt on the principle of ‘Mutuality’. There was no taxable income for the assessee and, accordingly, no return of income was filed voluntarily by the assessee for the year under consideration. The Ld. AO stated that notices u/s 142(1) of the Act were issued on two occasions as mentioned in page-2 of the assessment order electronically and the assessee claimed that those notices were not received by them. Hence, no compliance was made before the Ld. AO which enabled the Ld. AO to add the entire cash River Heights Phase-1 Association of Apartment Owner vs. ITO deposits made during the demonetization period in the bank account of the assessee in the sum of Rs.20,82,000/-.
Apart from this, in respect of other credit entries, the Ld. AO added the estimated profit at 8% and brought to tax the same. No appearance was made by the assessee before the Ld. CIT(A) which led the Ld. CIT(A) to confirm the order of the Ld. AO.
5. Considering the fact that assessee is a Resident Welfare Association where its income is exempt on the principle of ‘Mutuality’, I deem it fit and appropriate to restore the entire appeal qua the issues raised before us, to the file of Ld. AO for denovo adjudication in accordance with law. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the Assessee is allowed for statistical purposes.
Order pronounced in the open court on 17th January, 2024.