Income Tax Officer, (Exemptions), Ward-Surat, Surat V. Monoharlal Jain Memorial Foundation, Navsari

ITA 375/SRT/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2447 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-12-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 30-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUJESH SURATWALA
• Keywords: Reason to believe; Ignorance of law
• Section: 148; 144; 142(1); 12AA; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.375/SRT/2019 (िनधाŊरणवषŊ / Assessment Year: (2009-10) (Virtual Court Hearing) Income Tax Officer (Exemptions), Room No. 105, 1 st Floor, Income Tax Office, Anavil Business Centre, Nr. BRTS Bus Stop, Adajan, Surat- 395007 Vs. Manohar lal Jain Memorial Foundation, Sardar Chowk, Vijalpore, Navsari- 396 445 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAATM 9015 D (Appellant ) (Respondent) Assessee by : Shri Sujesh Suratwala, C.A Respondent by : Shri H.P.Meena– CIT-DR सुनवाईकीतारीख/ Date of Hearing : 21/12/2021 घोषणाकीतारीख/Date of Pronouncement : 28/02/2022 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the Revenue, pertaining to assessment year 2009-10, is directed against the order passed by the Learned Commissioner of Income Tax(Appeals)-3, Surat, dated 31.05.2019, which in turn arises out of an order passed by the Assessing Officer under section 144 r.w.s. 147 of the Income Tax Act, 1961 (in short ‘the Act’), dated 19.12.2016. 2. The grounds of appeal raised by the Revenue are as follows: “1. The ld. CIT(A) has erred in law and on facts in allowing grounds of the assessee without appreciating the fact that the assessee has not responded any notices nor filed submissions in support of filing of return of income nor furnished any justification for cash deposit in saving bank account during assessment proceedings.” 3. The relevant material facts, as culled out from the material on record, are as follows. During the assessment proceedings, assessing officer noticed that as per the information available with the Income-tax Department, the assessee has made cash deposits amounting to Rs.1,55,24,317/- in its saving bank account Page | 2 ITA No.375/SRT/2019 /A.Y. 09-10 Monoharlal Jain Memorial Foundation maintained with ICICI Bank Ltd during the financial year 2008-09 relevant to assessment year 2009-10. However, on verification of the ITD/ITBA, it was noticed that assessee has not filed any return of income for the assessment year 2009-10. Therefore, the case was reopened under section 147 of the Act by issuing notice under section 148 of the Act, dated 28/03/2016. 4. 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 Page | 3 ITA No.375/SRT/2019 /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. 6. 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. 7. 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. 8. On the other hand, Ld. Authorized Representative (AR) for the assessee defended the order passed by Ld. CIT(A). 9. 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 Page | 4 ITA No.375/SRT/2019 /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. 10. 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 Page | 5 ITA No.375/SRT/2019 /A.Y. 09-10 Monoharlal Jain Memorial Foundation the relevant materials or facts were admittedly already available in the concerned original assessment proceedings and there were no new facts which came to the possession of the assessing authority, the said officer could not be heard to say that the legal position was not known to him even though the relevant facts and materials were available. Ignorance of law would be no ground or any excuse for the assessing officer concerned to reopen the assessment. [Century Enka ltd. v. ITO (1983) 143 ITR 629(Cal.)] The belief should not be arbitrary or irrational but based on relevant and material reasons. The important words under section 147 of the Act, are “has reason to believe” and these are stronger than the words “is satisfied”. The belief entertained by the Assessing officer must not be arbitrary or irrational. It must be reasonable or, in other words, it must be based on reasons which are relevant and material. The Court cannot of course investigate into the adequacy or sufficiency of the reasons which have weighed with the assessing officer in coming to the belief, but the court can certainly examine whether the reasons are relevant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under section 147 of the Act. [ Ganga Saran & Sons (P.) Ltd. v. ITO (1981) 130 ITR 1 (SC)] 12. Based on the factual position narrated above, we do not find any infirmity in the order passed by Ld. CIT(A). That being so, we decline to interfere in the order passed by Ld. CIT(A) and the addition so deleted by Ld. CIT(A) on this issue, is hereby upheld. The ground raised by Revenue stands dismissed. 13.In the result, the appeal of the Revenue is dismissed. Order is pronounced on 28/02/2022 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat/िदनांक/ Date: 28/02/2022 Dkp Outsourcing Sr.P.S. Copy of the Order forwarded to 1. The Assessee Page | 6 ITA No.375/SRT/2019 /A.Y. 09-10 Monoharlal Jain Memorial Foundation 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat