BAJAJ FINSERV HOUSE OWNERS ASSOCIATION, PUNE V. Dy. CIT Circle-7, Pune

ITA 1931/PUN/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6727 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 06-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Principle of natural justice; Revised return
• Section: 12A; 143(2); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI R. S. SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.1931/PUN/2019 / ASSESSMENT YEAR : 2014-15 BAJAJ FINSERV HOUSE OWNERS ASSOCIATION, S.NO.208/1-B, OFF PUNE AHMEDNAGAR ROAD, VIMANNAGAR, PUNE-411014. PAN: AABAB4120G .. /APPLICANT / V/S. DCIT, CIRCLE-7, PUNE. .. / RESPONDENT ASSESSEE BY : SHRI NIKHIL MUTHA REVENUE BY : SHRI S. P. WALIMBE / DATE OF HEARING : 28.08.2020 / DATE OF PRONOUNCEMENT : 03.09.2020 / ORDER PER PARTHA SARATHI CHAUDHURY, JM: THIS APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(APPEALS)-8, PUNE DATED 04.10.2019 FOR THE ASSESSMENT YEAR 2014-15 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD: BASED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, BAJAJ FINSERV HOUSE OWNERS ASSOCIATION [THE APPELLANT] RESPECTFULLY SUBMITS THAT THE LEARNED CIT(A) ERRED IN DISPOSING THE APPEAL OF THE APPELLANT, ON THE FOLLOWING GROUNDS WHICH ARE WITHOUT PREJUDICE TO EACH OTHER: 1. GROUND 1 - ERRED IN REGARDING CLAIM OF EXEMPTION AS ADDITIONAL CLAIM 1.1 THE LEARNED CIT(A) ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER AND IN REGARDING THE CLAIM OF EXEMPTION BASED ON PRINCIPLE OF MUTUALITY AS AN ADDITIONAL CLAIM INSPITE OF THE FACT THAT THE EXEMPTION WAS CLAIMED IN THE RETURN OF INCOME ITSELF ALBEIT ON THE BASIS OF ERRONEOUS DISCLOSURE. 1.2 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE APPLICATION OF THE PRINCIPLE OF MUTUALITY WAS EVIDENT FROM NOTES TO FINANCIAL STATEMENT AND SHOULD NOT HAVE BEEN REGARDED AS ADDITIONAL CLAIM. THUS, RELIANCE PLACED ON THE DECISION 2 ITA NO.1931/PUN/2019 OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD (284 ITR 323) IS ERRONEOUS. 1.3 THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE APPLICATION OF BINDING CBDT CIRCULAR NO. 14 (XL-35) DATED 11/04/1955 WHEREIN IT HAS BEEN STATED THAT THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF ASSESSEE TO COLLECT MORE TAX THAN WHAT IS LEGITIMATELY DUE. 2. GROUND 2 - ENTITLEMENT TO EXEMPTION BASIS PRINCIPLE OF MUTUALITY 2.1 WITHOUT PREJUDICE TO THE ABOVE GROUND, THE APPELLANT SUBMITS THAT THE CLAIM OF EXEMPTION BASIS THE PRINCIPLE OF MUTUALITY IS SQUARELY APPLICABLE IN THE FACTS OF THE PRESENT CASE AND HENCE, THE APPELLANT SHOULD NOT BE ASSESSED TO TAX IN RESPECT OF RECEIPTS EARNED FROM THE TENANTS/ MEMBERS. 3. GROUND 3 - NON-ADJUDICATION ON THE GROUND OF ASSESSING THE INCOME ON NET BASIS 3.1 WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) ERRED IN NOT ADJUDICATING ON THE ALTERNATIVE PLEA OF ALLOWING THE CLAIM OF EXPENDITURE AS DEDUCTION, THEREBY ERRED IN ASSESSING THE INCOME TO TAX ON GROSS BASIS INSTEAD OF NET SURPLUS AMOUNT OF RS. 1,34,673. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR AT, THE TIME OF HEARING OF THE APPEAL, SO AS TO ENABLE THE HONBLE TRIBUNAL TO DECIDE THIS APPEAL ACCORDING TO LAW. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN AOP AND FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.1,34,673/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. THE NOTICE U/S. 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 28.08.2015. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/S 11 OF THE ACT. THE ASSESSING OFFICER ASKED FOR DOCUMENTARY EVIDENCE, SUCH AS REGISTRATION U/S 12A OF THE ACT, HOWEVER, THE APPELLANT FAILED TO FURNISH THE SAME. INSTEAD, THE ASSESSEE STATED THAT THE EXEMPTION CLAIM WAS ERRONEOUSLY CLAIMED BY IT, AND SUBMITTED REVISED COMPUTATION OF INCOME. HOWEVER, THE ASSESSING OFFICER STATED THAT AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) P. LTD. VS. CIT (284 ITR 323), THE ASSESSING OFFICER HAS NO POWER TO ADMIT/MODIFY CLAIM OTHERWISE THAN THROUGH FILING OF REVISED RETURN OF INCOME. THEREFORE, THE ASSESSING OFFICER DISMISSED THE SUBMISSION OF THE ASSESSEE AND COMPUTED THE TOTAL INCOME AT RS.4,92,53,138/-. AGAINST THE SAID DECISION OF THE ASSESSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE CONTENTION OF THE ASSESSEE WAS THAT THE CIT(A) HAD ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER IN DISREGARDING THE CLAIM OF 3 ITA NO.1931/PUN/2019 EXEMPTION BASED ON PRINCIPLE OF MUTUALITY AS AN ADDITIONAL CLAIM INSPITE OF THE FACT THAT THE EXEMPTION WAS CLAIMED IN THE RETURN OF INCOME ITSELF ALBEIT ON THE BASIS OF ERRONEOUS DISCLOSURE. FURTHER, BEFORE THE CIT(A), THE CONTENTION OF THE ASSESSEE WAS THAT THE ASSESSING OFFICER HAS NOT APPRECIATED THE APPLICATION OF THE PRINCIPLE OF MUTUALITY AND THE RELIANCE PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) P. LTD. (SUPRA). THE CIT(A) CONFIRMED THE ADDITION AS MADE BY THE ASSESSING OFFICER. 3. AGGRIEVED WITH THE SAID DECISION OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US WITH THE GROUNDS EXTRACTED ABOVE. 4. AT THE TIME OF HEARING, LD. AR EMPHASIZED THAT NOT BEING ALLOWED RELIEF ON THE APPLICABILITY OF THE SAID PRINCIPLE OF MUTUALITY IN THE CASE OF THE ASSESSEE, THE LD. AR DRAWING OUR ATTENTION TO PAGES 74 75 OF THE PAPER BOOK WHEREIN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2015-16 AT PARA 3 OF THE SAID ORDER, THE PRINCIPLE OF MUTUALITY WAS ACCEPTED BY THE DEPARTMENT. FURTHER, LD. AR ALSO BROUGHT TO OUR NOTICE AT PAGES 77 78 OF THE PAPER BOOK WHICH IS THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2016-17 WHEREIN ALSO AT PARA 3 OF THE SAID ORDER, THE PRINCIPLE OF MUTUALITY WAS ACCEPTED BY THE DEPARTMENT ON EXAMINATION. 5. PER CONTRA , THE LD. DR VEHEMENTLY ARGUED THAT IN THIS CASE SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE FOR HEARING THE CASE ON MERITS. HOWEVER, THERE IS AN EVASIVE ATTITUDE OF THE ASSESSEE EVADING THE PROCESS OF LAW WHICH IS EVIDENT AT PAGE 8 OF THE CIT(A)S ORDER WHEREIN A TABLE IS GIVEN AND THE SAME IS EXTRACTED HEREUNDER :- SR. NO. DATE OF NOTICE ISSUED DATE OF HEARING PARTICULARS 1. 14-08-2019 16-09-2019 NOTICE ISSUED. 2. NA 16-09-2019 NO ONE ATTENDED. 3. 21-05-2018 26-07-2018 NOTICE ISSUED. 4. NA 26-07-2018 NO ONE ATTENDED. 4 ITA NO.1931/PUN/2019 6. 27-09-2018 12-10-2018 NOTICE ISSUED. 7. NA 12-10-2018 NO ONE ATTENDED. 8. 07-05-2019 24-05-2019 NOTICE ISSUED. 9. NA 24-05-2019 NO ONE ATTENDED. 6. THEREAFTER, THE LD. DR ALSO PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A) AND THE RELEVANT PORTION OF THE SAID ORDER IS EXTRACTED AS FOLLOWS :- 6.9 .. THERE IS A WELL-KNOWN DICTUM OF LAW VIGILANTIBUS, NO DORMENTIBUS, JURA SUBVENIUNT WHICH MEANS LAW WILL HELP ONLY THOSE WHO ARE VIGILANT. LAW WILL NOT ASSIST THOSE WHO ARE CARELESS OF HIS/HER RIGHT. IN ORDER TO CLAIM ONES RIGHT, S/HE MUST BE WATCHFUL OF HIS/HER RIGHT. ONLY THOSE PERSONS, WHO ARE WATCHFUL AND CAREFUL OF USING HIS/HER RIGHTS, ARE ENTITLED TO THE BENEFITS OF LAW. LAW CONFERS RIGHTS ON PERSONS WHO ARE VIGILANT OF THEIR RIGHTS. THE APPELLANT ALSO STATED ABOUT THE CONCEPT OF MUTUALITY, HOWEVER, NO PROPER SUBMISSION HAS BEEN GIVEN BY THE APPELLANT ON THIS ISSUE. FURTHER, THE APPELLANT HAS NOT FURNISHED DOCUMENTS TO JUSTIFY THE CLAIM OF EXPENSES. IN LIGHT OF THE ABOVE DISCUSSION THE APPEAL OF THE APPELLANT IS HEREBY DISMISSED. 7. THE LD. AR, ON THE OTHER HAND, SUBMITTED THAT THEY HAVE EXTRACTED COPY OF THE ORDER SHEET AND THEREIN THERE WAS APPEARANCE ON 03.10.2019 AND THE ORDER OF THE LD. CIT(A) WAS PASSED ON 04.10.2019 AND ALSO THE WRITTEN SUBMISSIONS WERE CONSIDERED BY THE LD. CIT(A) WHICH WAS PLACED ON RECORD. THE LD. AR ALSO SUBMITTED THAT AS EVIDENT FROM EARLIER ASSESSMENT ORDERS THE PRINCIPLE OF MUTUALITY WAS ACCEPTED BY THE REVENUE. THIS YEAR THE FACTS BEING IDENTICAL, THE SAME PRINCIPLE SHOULD APPLY AND THE ADDITION MADE IN THIS YEAR SHOULD BE DELETED. 8. ON PERUSAL OF THE ORDER OF THE LD. CIT(A), WE FIND THAT IT IS INDEED CORRECT THAT INSPITE OF SEVERAL OPPORTUNITIES GRANTED TO THE ASSESSEE, THE ASSESSEE APPEARED ONLY ON ONE DATE I.E. ON 03.10.2019 THE DATE PRIOR TO THE PASSING OF THE ORDER BY THE LD. CIT(A) ON 04.10.2019. WE FURTHER FIND THAT THE LD. CIT(A) THOUGH HAS CONSIDERED THE WRITTEN SUBMISSION OF THE ASSESSEE, HOWEVER, HE HAS NOT DEALT IN HIS ORDER THAT WHEN THE DEPARTMENT HAS ACCEPTED THE PRINCIPLE OF MUTUALITY IN EARLIER YEARS THEN WHY IT SHOULD NOT BE FOLLOWED FOR THIS RELEVANT 5 ITA NO.1931/PUN/2019 YEAR. WE ARE UNABLE TO IDENTIFY FROM THE ORDER OF THE LD. CIT(A) WHETHER THE ASSESSMENT ORDERS PLACED BEFORE US IN PAPER BOOK THE SAME WERE ALSO PLACED BEFORE THE LD. CIT(A) OR NOT TO WHICH NEITHER PARTIES HAVE COMMENTED. WE ARE OF THE CONSIDERED OPINION THAT THE MATTER CALLS FOR VERIFICATION OF FACTS REGARDING THE APPLICABILITY OF PRINCIPLE OF MUTUALITY AS CLAIMED BY THE ASSESSEE AND AS ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS AND WHETHER THE SAME IS APPLICABLE FOR THE RELEVANT YEAR OR NOT ANALYZING THE PRESENT FACTS HEREIN. ACCORDINGLY, WE SET-ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER TO HIS FILE FOR RE-ADJUDICATING THE MATTER AS PER OUR ABOVE DIRECTION WHILE COMPLYING ALSO WITH THE PRINCIPLES OF NATURAL JUSTICE. THE ASSESSEE IS DIRECTED TO SUBMIT ALL THE RELEVANT DETAILS AS CALLED FOR BY THE LD. CIT(A) TO REPRESENT THE CASE ON MERITS. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 03 RD DAY OF SEPTEMBER, 2020. SD/- SD/- ( R. S. SYAL ) ( PARTHA SARATHI CHAUDHURY ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 03 RD SEPTEMBER, 2020 SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-8, PUNE. 4. THE PR. CIT-4, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.