Jokhiram Chambers Owners Association, Ranchi V. ITO,Ward-1(4), Ranchi

ITA 349/RAN/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3757 (ITAT-RANCHI)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 26-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.K. MONDAL
• Assessee Lawyers: P.S.PAUL
• Section: 143(1); 201; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH , RANCHI , . . , BEFORE SHRI CHANDRA MOHAN GARG, J M AND SHRI L.P. SAHU, AM ./ ITA NO. 349 / RAN /20 1 8 ( / ASSESSMENT YEAR : 20 1 6 - 20 1 7 ) JOKHIRAM CHAMBERS OWNERS ASSOCIATION, ASSOCIATION OF PERSONS, J.D.COMPOUND, MAIN ROAD, RANCHI - 834001 VS. ITO, WARD - 1(4), RANCHI ./ ./ PAN/GIR NO. : A A CAJ 1661 M ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI P.S.PAUL, CA /REVENUE BY : SHRI P.K.MONDAL , ADDL. CIT ( DR ) / DATE OF HEARING : 2 7 /0 8 /2019 / DATE OF PRONOUN CEMENT : 30 /0 8 /2019 / O R D E R PER BENCH: TH IS APPEAL HA S BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), RANCHI , DATE D 09 .1 0 .201 8 FOR THE ASSESSMENT YEAR 20 1 6 - 20 1 7 , ON THE FOLLOWING GROUNDS : - 1. THAT THE LD. ASSESSING OFFICER AND THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) ARE NOT JUSTIFIED IN DENYING THE CONCEPT OF MUTUALITY OF THE ASSESSEE. 2. THAT THE LD. ASSESSING OFFICER AND THE LD. COMMISSIONER OF INCOME TAX ( APPEALS ) ARE NOT JUSTIFIED IN DENYI NG BASIC EXEMPTION OF RS. 2,50,000/ - TO THE ASSESSEE. 3. THAT THE LD. COMMISSIONER OF INCOME TAX ( APPEALS ) IS NOT JUSTIFIED IN HOLDING THAT SECTION 115JC IS APPLICABLE ON A SIMPLE HOUSING MAINTENANCE SOCIETY. 4. THAT THE LD. ASSESSING OFFICER AND THE L D. COMMISSIONER OF INCOME TAX (APPEALS) ARE NOT JUSTIFIED IN NOT CONSIDERING THE ITA NO. 349 / R AN /201 8 2 ORDER OF THE HON'BLE SUPREME COURT AND NOT GIVING ANY SPECIFIC OPINION ON IT. 2. BRIEF FACTS OF THE CASE ARE THAT T HE ASSESSEE HA S FILED HIS RETURN OF TOTAL INCOME ELECTRONI CALLY DECLARING TOTAL INCOME OF RS. 1,41,780/ - ON 05.08.2016. THE RETURN WAS PROCESSED U/S 143(1) BY THE CPC, AND DEMAND OF RS.38,750/ - WAS RAISED. AGAINST WHICH THE ASSESSEE APPEALED BEFORE THE CIT(A) AND THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE AND FINDINGS OF THE ASSESSING OFFICER, DISMISSED THE APPEAL OF THE ASSESSEE. 3 . FURTHER AGGRIEVED FROM THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL. 4 . LD. AR BEFORE US FILED WRITTEN SUBMISSION WHICH RE AD AS UNDER : - 1. GROUND NO. 1 & 4 : - THE COPY OF THE MEMORANDUM OF ASSOCIATION, BYE LAWS AND THE RULES & REGULATIONS OF THE ASSOCIATION ARE ATTACHED AS ANNEXURES - 1 TO 3. THE ASSESSEE IS A HOUSING SOCIETY WHOSE MAIN OBJECT IS TO TAKE CARE OF THE INTERES T OF THE UNIT HOLDERS. POINT NO. - 3 (A) TO (O) OF ANNEXURE - 1. THERE IS NO INTENTION TO COLLECT ANYTHING FROM ANY OUTSIDER. THE ASSESSEE IS A NON - PROFIT ORGANISATION AND A MUTUAL SOCIETY CONSISTING OF ONLY UNIT OWNERS. THE ASSOCIATION HAS NO INTENTION TO MAKE AND DISTRIBUTE ANY PROFIT. IN OTHER WORDS, IT IS A PREMISES SOCIETY. HENCE, THE CONCEPT OF MUTUALITY COMES INTO PLAY AS THE ASSESSEE CANNOT MAKE ANY PROFIT FROM ITS CONSTITUENT MEMBERS. THE SOURCES OF RECEIPTS OF THE SOCIETY ARE MAINTENANCE CHARGES, I NTEREST FROM BANK & RENT FROM GENERATOR SPACE. INTEREST FROM BANK AND RENT FROM GENERATOR SPACE HAVE BEEN OFFERED FOR TAXATION, BEING RECEIPTS FROM 3 RD PARTIES. THE LD. A.O. & THE LD. C.I.T.(A) ARE NOT JUSTIFIED IN DENYING THE CONCEPT OF MUTUALITY OF THE A SSESSEE. THE COPY OF THE JUDGMENT BY THE HON'BLE SUPREME COURT IN THE CASE OF ITO VS. VENKETESH PREMISES CO - OPERATIVE SOCIETY LTD. (2018) 254 TAXMAN 0313 ( S.C.) IS ATTACHED AS ANNEXURE - 4. THE MAIN FINDING OF THE HON'BLE SUPREME COURT WAS THAT : - '...... ...... THERE WAS NO REASON TO TAKE A VIEW DIFFERENT FROM THAT TAKEN BY THE HIGH COURT, THAT THE NOTIFICATION DATED 9 - 8 - 2001 IS APPLICABLE ONLY TO CO - OPERATIVE HOUSING SOCIETIES AND HAS NO APPLICATION TO A PREMISES SOCIETY WHICH CONSISTS OF NON - RESIDENTIAL PREMISES. IN THE RESULT', ALL APPEALS PREFERRED BY THE REVENUE WERE DISMISSED. CIVIL APPEAL NO. 1180 OF 2015 PREFERRED BY THE ASSESSEE, SOCIETY WAS ALLOWED.' ITA NO. 349 / R AN /201 8 3 THE COPY OF THE JUDGEMENT SOM VIHAR APARTMENT OWNERS HOUSING MAINTENANCE SOCIETY LTD. V CIT ( 19 97 ) 060 ITD 0392 ( DEL - TRIB ) AS ANNEXURE - 5 IN WHICH IT HAS BEEN HELD THAT 'IN THE FACTS AND CIRCUMSTANCES OF THE CASE, PRINCIPLE OF MUTUALITY IS APPLICABLE IN THE ASSESSEE'S CASE, THEREFORE, AMOUNT REPRESENTING CONTRIBUTION OF MEMBERS AND LICENCE FEE AND ELECTRICITY CHARGES RECEIVED FROM LICENSEES OF SHOPS AND BANK, ETC., JOINTLY OWNED BY MEMBERS OF ASSESSEE - SOCIETY IS EXEMPT FROM TAX.' 2. GROUND NO. 2 & 3 : - SINCE THE ASSESSE IS A PREMISES SOCIETY WITHOUT PROFIT MOTIVE, HENCE SEC.115JC HAS NO APPLIC ABILITY. WHILE FILING THE RETURN FORM ELECTRONICALLY (WHICH IS MANDATORY), THE COLUMN OF SEC.115JC IS FILLED AUTOMATICALLY BY THE SYSTEM. THE ASSESSE HAS NO OPTION TO NEGATE THE FIGURE FILLED IN COLUMN OF SEC.115JC AND THEREFORE, THE RETURN HAD TO BE SUBMI TTED WITH FIGURES IN COLUMN OF SEC.115JC. SINCE THE ASSESSE IS A SIMPLE ASSOCIATION PERSONS, HENCE THE BASIC DEDUCTION OF RS. 2,50,000/ - HAS TO BE ALLOWED. COPY OF THE RATES OF APPLICABLE TAXATION IS ATTACHED AS ANNEXURE - 6. THE LD. CIT(A) WAS NOT JUSTIFI ED IN NOT APPRECIATING THE FACT THAT LAW SHALL PREVAIL OVER THE COMPUTER SOFTWARE. PLEASE FIND ENCLOSED A COPY OF THE CHAPTER - XII - BA, SEC - 115JC OF THE INCOME TAX ACT, 1961 ATTACHED AS ANNEXURE - 7. IF AT ALL TAXABLE U/S 115JC THE TAX RATE SHOULD HAVE BEEN 18.5% AND NOT 30%. IN ADDITION TO THIS, LD. AR ALSO REQUEST FOR SENDING BACK THE MATTER TO THE FILE OF ASSESSING OFFICER FOR NECESSARY RECTIFICATION. 5 . ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER. 6 . AFTER HEARING BOTH THE S IDES AND PERUSING THE MATERIAL AVAILABLE ON RECORD , WE NOTICE THAT THE RETURN OF INCOME WAS PROCESSED U/S.143(1) OF THE ACT IN WHICH INCOME FROM OTHER SOURCES HAS BEEN DETERMINED AT RS.1,41,778/ - AND IN WHICH 30% OF TAX HAS BEEN CHARGED. THE ASSESSEE IS AN ASSOCIATION OF PERSONS. BEFORE US, THE AR OF THE ASSESSEE FILED PAPER BOOK CONTAINING 32 PAGES. ON PERUSAL OF THE DOCUMENTS PLACED BEFORE US, WE NOTICE THAT THE ASSESSEE HAD DECLARED INTEREST ON FIXED DEPOSITS INCOME OF RS.1,41,778/ - . WE OBSERVE FROM THE ACKNOWLEDGEMENT ISSUED BY THE CPC U/S.143(1) OF THE ACT THAT THE THRESHOLD LIMIT OF EXEMPTION OF RS.2,50,000/ - HAS NOT BEEN GIVEN TO THE ITA NO. 349 / R AN /201 8 4 ASSESSEE. WE ACCEPT THE CONTENTION OF LD. AR OF THE ASSESSEE THAT THIS MATTER SHOULD GO TO THE FILE OF ASSESSING OFFICE R FOR NECESSARY VERIFICATION AS TO WHY THE ASSESSEE HAS NOT BEEN GIVEN BENEFIT OF THRESHOLD LIMIT OF EXEMPTION. ACCORDINGLY, WE REMIT THE MATTER TO THE FILE OF ASSESSING OFFICER FOR GIVING BENEFIT OF THRESHOLD LIMIT OF EXEMPTION AFTER DUE VERIFICATION. NEE DLESS TO SAY, THE ASSESSEE MAY BE GIVEN SUFFICIENT OPPORTUNITY OF HEARING AND THE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE ASSESSING OFFICER FOR EARLY DISPOSAL OF THE CASE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . O RDER PRONOUNCED IN THE OPEN COURT ON 30 / 08 / 201 9 . S D/ - ( C.M.GARG ) SD/ - ( L.P.SAHU ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER RANCHI ; DATED 30 / 08 /201 9 PRAKASH KUMAR MISHRA , S R.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) ITAT CUTTACK BENCH, CUTTACK CAMP AT ITA T RANCHI BENCH, RANCHI 1. / THE APPELLANT - . JOKHIRAM CHAMBER S OWNERS ASSOCIATION, ASSOCIATION OF PERSONS, J.D.COMPOUND, MAIN ROAD, RANCHI - 834001 2. / THE RESPONDENT - ITO, WARD - 1(4), RANCHI 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, RANCHI 6. / GUARD FILE. //TRUE COPY//