INCOME TAX OFFICER, (EXEMPTIONS), WARD-SURAT, SURAT vs. MONOHARLAL JAIN MEMORIAL FOUNDATION, NAVSARI

The grounds of appeal

However, in response to notice under section 148 of the Act, the assessee has not furnished any return of income for the assessment year 2009-10. Notice under section 142(1) of the Act, dated 07/09/2016 was issued to the assessee requiring to furnish various details in connection with the assessment for the assessment year 2009-10. 5.However, the assessee has not furnished any details, therefore assessing officer framed the assessment under section 144 of the Act. Since the assessee has not furnished copy of registration certificate under section 12AA of the Act, therefore assessing officer held that assessee-trust is not registered under section 12AA of the Act. Further, assessing officer noticed that assessee has made cash deposits amounting to Rs.155,24,317/- during the period 01/04/2008 to 31/03/2009 in its bank account maintained with ICICI Bank Ltd., Navsari. The assessee has not explained the sources of the above cash deposits even after issue of notice under section 142(1) of the Act and subsequent show cause notice issued and duly served upon the assessee. The assessing officer observed that gross receipts of the assessee during the year under consideration is above Rs.1 crores. Therefore, assessee’s case is not covered by the provision of Section 10(23C)(iiad) of the Act also. The assessee has also not furnished any copy of approval under section 10(23C)(vi) of the Act and, therefore, the assessee’s case is also not covered by the provision of Section 10(23C)(vi) of the Act. In view of the fact that the assessee is not registered under section 12AA of the Act and also the assessee is not covered by the provision of Section 10(23C)(iiiad) and 10(23C)(vi) of the Act and therefore the status of the assessee was held as Association of Persons (AOP) by the assessing officer. Accordingly, the income of the assessee for the assessment year 2009-10 was computed as per the normal provisions of the /A.Y. 09-10 Monoharlal Jain Memorial Foundation Income Tax Act applicable to AOP under the normal provisions of the Income- Tax Act. Therefore, assessing officer observed that since the assessee has made cash deposits amounting to Rs.1,55,24,317/- in its Saving bank Account maintained with ICICI Bank Ltd during the period 01/04/2008 to 31/03/2009 therefore, assessing officer treated it as unexplained cash deposits and added to the income of the assessee.

Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A) who has deleted the addition made by the Assessing Officer. Aggrieved, the Revenue is in appeal before us.

Shri H.P.Meena, Learned CIT-DR for the Revenue pleads that assessee has not furnished any details or explanation during the assessment proceedings even after the show cause notice issued and duly served upon the assessee. Therefore Assessing Office was justified in making addition of Rs.1,55,24,317/- treating the same as unexplained cash deposits as the assessee trust has not explained the source of the same during the course of assessment proceedings. This way, ld DR relied on the stand taken by the assessing officer, and prays the Bench that addition made by the assessing officer may be upheld.

On the other hand, Ld. Authorized Representative (AR) for the assessee defended the order passed by Ld. CIT(A).

We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that during the appellate proceedings, the assessee argued before the CIT(A) that assessing officer had failed to serve notice under section 282, 282A, 283, 284 of the Act and passing an order under section 144 without considering Income Tax return filed by the assessee along with all the financial statement. The assessing officer reopened the case under section 147 of the Act on the basis of AIR information that cash deposits amounting to Rs.1,55,24,317/-, maintained with ICICI Bank was made /A.Y. 09-10 Monoharlal Jain Memorial Foundation and the assessee had not filed any return of income. The notice under section 148 was issued on 28.03.2016 but no return of income was filed in response to the notice under section 148 of the Act. Therefore, assessing officer added the cash deposits of Rs.1,55,24,317/- to the income of the assessee in absence of any reply filed by the assessee during the assessment proceedings and the assessment was completed under section 144 of the Act.

During the appellate proceedings, the assessee pleaded that assessing officer has wrongly mentioned while reopening the case that no return of income was filed. It was contended by the assessee that return of income was filed along with the computation of income, audited balance sheet, alongwith form No. 10B on 28.09.2010, vide acknowledgement no. 000540. The assessee had also filed a writ petition before the Hon'ble high Court vide SCA No. 2531 of 2018 in which the Hon'ble court had also observed, vide its order dated 11.04.2018 that the assessing officer in his ex parte order had erroneously proceeded on the ground that the assessee had not filed the return of income and in the past also the cash deposits has been shown in the bank account received from the patients for the treatment and the accounts are duly audited. 11.The ld CIT(A) observed that during the relevant assessment year also the assessee had filed the return of income on 28.09.2010 which has not been taken on record by the assessing officer and has erroneously held that no return of income was filed and therefore the cash deposits is undisclosed income of the assessee. We note that trust is duly registered with CIT(Exemption), vide registration 110-159-M/2000-01 dated 27.03.2001. The assessee’s submission is found to be correct and the cash deposit pertains to the receipts from the hospital which is a regular feature every year and the bank account is also not an undisclosed account. Similarly, the A.O. had also made the addition of Rs.17,900/- on account of amount received from 1CICI prudential Life Insurance Co. Limited. Since, this amount is also duly disclosed in the return of income therefore ld CIT(A) deleted the addition. We note that ignorance of law cannot form the basis of reopening the assessment under section 147 of the Act. Where