VERSOVA SANDEEP SAROVAR CHS LTD, MUMBAI V. ITO WD 20(3)(4), MUMBAI

ITA 4388/MUM/2013

• Counselvise Citation: 438819914 RSA 2013
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 13-11-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 31-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: DR P DANIEL; S M MAKHIJA
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; Reasonable cause; Corroborative evidences; Reason to believe; Reassessment proceedings
• Section: 147; 68; 148; 144; 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI . . , / BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND . , SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 M/S. VERSOVA SANDEEP SAROVAR CHS LTD., PLOT NO. 13, SVP NAGAR, MAHADA, 4 BUNGLOW, ANDHERI(WEST), MUMBAI -400053 / VS. THE INCOME TAX OFFICER, WARD 20(3) 4, PIRAMAL CHAMBERS, LALBAUGH, PAREL, MUMBAI 400012 # ./ $% ./ PAN/GIR NO. : AAAAV 1292J ( #& / APPELLANT ) .. ( '(#& / RESPONDENT ) #& ) / APPELLANT BY: DR.P. DANIEL & SHRI S.M.MAKHIJA '(#& * ) / RESPONDENT BY : SHRI GIRIJA DAYAL * + / DATE OF HEARING : 13/11/2013 ,-! * + / DATE OF PRONOUNCEMENT : 13/11/2013 . / O R D E R PER I.P.BANSAL, J.M: ALL THESE APPEALS ARE FILED BY THE ASSESSEE. THEY ARE DIRECTED AGAINST CONSOLIDATED ORDER PASSED BY LD. CIT(A)-31,MUMBAI D ATED 28/3/2013 FOR ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09. GRO UNDS OF APPEAL RAISED IN ALL THESE APPEALS ARE IDENTICAL EXCEPT DIFFERENCE IN FI GURES. GROUNDS OF APPEAL FOR A.Y 2006-07 ARE AS UNDER: . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 2 1) THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMI NG THE ACTION OF THE ASSESSING OFFICER IN DETERMINING THE INCOME OF THE APPELLANT CO-OPERATIVE HOUSING SOCIETY AT RS. 2,95,86,904/- U/S. 68 TREATING THE SAME TO BE UNEXP LAINED CASH CREDIT APPEARING IN THE BALANCE SHEET OF ASSESSEE SOCIETY ON THE ASSET SIDE WITHOUT APPRECIATING THAT SAID SUM IS RECEIVABLE FROM THE MEMBERS TOWARDS CONSTRUC TION COST AND OTHER CHARGES PAYABLE BY THEM AND THEREFORE BY NO STRETCH OF IMAG INATION CAN BE HELD AS UNEXPLAINED CASH CREDIT LIABLE TO BE TAXED U/S. 68 OF THE INCOME TAX ACT, 1961. 2) WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT SU BMITS THAT THE LEARNED CIT (APPEALS) HAS FAILED TO APPRECIATE THAT SO CALLED BALANCE SHE ET PREPARED BY PANEL AUDITOR APPOINTED BY THE ADMINISTRATOR APPOINTED BY REGISTR AR OF CO-OPERATIVE HOUSING SOCIETIES IS NOT CORRECT AS PER PRINCIPLES OF ACCOU NTANCY AND THEREFORE CANNOT FORM BASIS FOR MAKING ANY ADDITION. 3) THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMIN G THE ORDER PASSED BY THE ASSESSING OFFICER WITHOUT APPRECIATING THAT ASSESSE E HAD A REASONABLE CAUSE IN NOT FILING AUDIT REPORTS FOR EACH YEAR DURING THE COURS E OF ASSESSMENT PROCEEDINGS BUT HAD FILED THE SAME BEFORE HIM (LEARNED CIT(A)) WHICH HE HAD FORWARDED TO ASSESSING OFFICER IN THE COURSE OF REMAND PROCEEDINGS BUT ASS ESSING OFFICER FAILED TO TAKE ANY COGNIZANCE OF THE SAME ON TECHNICAL GROUNDS THAT AS SESSEE HAD BEEN GIVEN SUFFICIENT OPPORTUNITY AT ASSESSMENT STAGE AND THEREFORE ADDIT IONAL EVIDENCE FILED COULD NOT BE ADMITTED BEFORE LEARNED CIT (APPEALS). 4) THE LEARNED CIT (APPEALS) ERRED IN NOT ADJUDICAT ING UPON THE PLEA RAISED BY THE ASSESSEE THAT THE DETAILED REASONING GIVEN/ADDITION AL EVIDENCE FILED BEFORE HIM DESERVE TO BE ADMITTED AND JUSTICE IMPARTED TO THE ASSESSEE. 5) THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER AND! OR VARY ANY OF THE GROUNDS AT THE TIME OR BEFORE THE HEARING OF THIS APPEAL. 6) THE APPELLANT THEREFORE PRAYS THAT SINCE ASSESSE E IS A CO-OPERATIVE HOUSING SOCIETY HAVING NO TAXABLE INCOME THE ENTIRE ADDITION OF RS. 2,95,86,904/- MAY PLEASE BE DELETED OR ALTERNATIVELY MATTER RESTORED TO THE FIL E OF ASSESSING OFFICER TO CONSIDER THE EVIDENCE AND PASS A FRESH ASSESSMENT ORDER AFTER GI VING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 2. FOR OTHER YEARS THE FIGURES ARE AS UNDER: ASSESSMENT YEAR AMOUNT OF INCOME EARNED . 2007-08 RS . 3,25,45,590/- 2008-09 RS . 3,57,80,150/- 3. ALL THESE ASSESSMENTS ARE FRAMED BY THREE SEPAR ATE ASSESSMENT ORDERS DATED 28/12/2011 WHICH ARE PASSED UNDER SECTION 144 OF T HE INCOME TAX ACT, 1961 (THE ACT). THE CONTENTS OF ALL THE ASSESSMENT YEARS ARE IDENTICAL EXCEPT DIFFERENCE IN AMOUNT OF INCOME ASSESSED. . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 3 4. THE FACTS AS DISCUSSED IN THE ASSESSMENT ORDER A RE THAT ASSESSEE DID NOT FILE ANY RETURN OF INCOME FOR ANY OF THE IMPUGNED ASSESS MENT YEARS. THE AO ISSUED NOTICES UNDER SECTION 148. THE REASONS FOR ISSUING NOTICES THOUGH IS NOT MENTIONED IN THE ASSESSMENT ORDER BUT ARE MENTIONED IN THE OR DER OF LD. CIT(A). BASED ON INFORMATION WHICH WAS IN THE NATURE OF TEP IT WAS F OUND THAT ASSESSEE WAS NOT FILING OF RETURN OF INCOME, THEREFORE, NOTICES WERE ISSUED TO THE ASSESSEE FOR FILING THE RETURNS. THE AO REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY THE RETURNS WERE NOT FILED. THE REPLY OF THE ASSESSEE AS REPRODUCED IN THE ASSESSMENT ORDER IS AS UNDER: IN THIS REGARD IT IS INFORMED THAT THE ACCOUNT OF O UR SOCIETY ARE STILL NOT AUDITED, SINCE BEGINNING. THIS IS REMAINED INCOMPLETE AS THE RECOR DS OF SOCIETY WERE NOT HANDED OVER BY EARLIER OFFICE BEARER MUCH EARLIER TO 2005. THER EAFTER DUE TO VARIOUS REASONS THE DY. REGISTRAR OF CO-OPERATIVE SOCIETIES, HAD NOMINATED ADMINISTRATOR TO LOOK AFTER THE WORKING OF SOCIETY. THE ADMINISTRATOR ALSO DID NOT HAND OVER COMPLETE DOCUMENTS TO THE MANAGING COMMITTEE FORMED, WHICH IS STILL RUNNI NG THE SOCIETY AFFAIRS SUCCESSFULLY, EXCEPT THAT OF OLD DOCUMENTS, UNAVAILABLE. DUE TO T HIS REASONS THE SOCIETY WAS UNABLE TO FILE ANY RETURNS TO YOUR DEPARTMENT WE ARE HOWEVER MAKING ALL OUT EFFORTS TO TRACE THE OLD RECORDS, SO THAT THE ACCOUNTS ARE FINALIZED AND THEY ARE AUDITED, WHICH WILL FACILITA TE THE SOCIETY TO FILE THE INCOME-TAX RETURNS. IN THIS REGARD THE SOCIETY VIDE LETTER DAT ED 04-08-2011 (ENCLOSED) HAVE ALSO REQUESTED THE DY. REGISTRAR, CO-OPERATIVE SOCIETIES , FOR EXTENSION OF AGM DATE, DUE TO NON-FINALISATION OF OLD ACCOUNTS AND TO PREPARE & P RESENT THE ACCOUNTS OF F. Y. 2010-11 FOR A GM PURPOSE. AS FAR AS SUMMONS UNDER SECTION 143(2) CONCERNED, I T IS IN FORMED THAT THE SAME WAS RECEIVED IN SOCIETY OFFICE ON 26-09-2011 AND HENCE IT WAS NOT POSSIBLE FOR ANY MEMBER TO REMAIN PRESENT BEFORE YOU FOR THE PURPOSE. IT WA S ALSO PRESUMED THAT SINCE THE RETURN WAS NOT FILED BY THE SOCIETY, NO ANY RETURN WERE AVAILABLE TO PLACE BEFORE YOU. AS AND WHEN THE RECORDS ARE TRACED AND ACCOUNTS ARE FINALIZED, THE RETURN SHALL BE FILED WITHOUT ANY FURTHER DELAY AND PLACED BEFORE Y OU. WE REGRET FOR NOT APPEARING BEFORE YOU ON THE DATE FIXED. 4.1 THE AO ISSUED ANOTHER NOTICE ALSO TO THE ASSES SEE AND IT WAS MADE CLEAR THAT IN CASE THE ASSESSEE DOES NOT COMPLY WITH THE REQUI REMENTS, THE ASSESSMENTS WILL BE COMPLETED UNDER SECTION 144 OF THE ACT. INTERNA L AUDIT REPORT FOR FINANCIAL YEAR 2005-06 (FOR A.Y 2006-07) WAS AVAILABLE WITH THE AO IN WHICH AN AMOUNT OF RS.2,95,86,909/- WAS SHOWN TO BE RECEIVED BY THE AS SESSEE AS COLLECTED FOR BUILDING REPAIRS AND TOWARDS MAINTENANCE. IN VIEW OF THE F AILURE OF THE ASSESSEE TO SUBMIT . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 4 SOURCE OF SUCH COLLECTION AND UTILIZATION THEREOF, THE AO TREATED THE SAID AMOUNT AS ASSESSABLE INCOME OF THE ASSESSEE IN RESPECT OF ASS ESSMENT YEAR 2006-07. THEREAFTER, FOR OTHER ASSESSMENT YEARS THE AO AD DED ALMOST 10% TO THE SAID AMOUNT FOR EACH OF THE YEAR AND ASSESSED THE INCOME IN SIMILAR MANNER. THE ASSESSED INCOME YEAR WISE IS AS UNDER: ASSESSMENT YEAR AMOUNT OF INCOME EARNED . 2006-07 RS. 2,95,86,904/- 2007-08 RS. 3,25,45,590/- 2008-09 RS. 3,57,80,150/- IT MAY BE MENTIONED HERE THAT THE BASIS OF ASSESSIN G THE AFOREMENTIONED INCOME IS ONLY INTERNAL AUDIT REPORT WHICH WAS IN RESPECT OF FINANCIAL YEAR 2005-06. FOR OTHER ASSESSMENT YEARS NO SUCH MATERIAL WAS AVAILABLE WIT H THE AO. 5. AGGRIEVED BY THE AFOREMENTIONED ORDERS THE ASSES SEE FILED AN APPEAL LD. CIT(A). THE MAIN SUBMISSION OF THE ASSESSEE BEFORE LD. CIT(A) WAS UNDER: YOUR APPELLANT IS A CO-OPERATIVE HOUSING SOCIETY REGISTERED UNDER THE COOPERATIVE SOCIETIES ACT, SINCE 1994. THE LEARNED INCOME TAX O FFICER ISSUED NOTICE U/S 148 FOR THE YEAR UNDER CONSIDERATION WITHOUT GIVING ANY REASONS RECORDED BY HIM FOR ISSUANCE OF SUCH NOTICE. THE LEARNED AO ISSUED NOTICE U/S 148 D ATED 31-12-2010 WAS SERVED ON THE APPELLANT ON 11-01-2011. THEREAFTER, THE AG REQ UESTED THE APPELLANT VIDE NOTICE U/S 148 DATED 21-09-2011 TO FURNISH THE RETURN OF I NCOME IMMEDIATELY. THE OFFICE BEARERS OF THE SOCIETY, HAS VIDE LETTER DATED 04-10 -2011 INFORMED THE DIFFICULTY IN COMPLETING THE ACCOUNTS AND REQUESTED THE AG TO GIV E SUFFICIENT TIME. THE LEARNED AO WITHOUT GIVING SUFFICIENT OPPORTUNIT Y HURRIEDLY COMPLETED THE ASSESSMENT U/S 144 ON THE BASIS OF GOVERNMENT INTER NAL AUDITORS REPORT DATED OCTOBER, 2006 COVERING THE ENTIRE PERIOD FROM 06-09 -1994 TO 31-03-2006. THE LEARNED AG SIMPLY PICKED UP A FIGURE OF RS.2,95,86,904/- SH OWN AS RECEIVABLE FROM THE MEMBERS AND TAXED THE SAME AS INCOME U/S 68 OF THE INCOME TAX ACT. THE LEARNED AG HAS NOT ADVANCED ANY REASON FOR ADDI NG A SUM OF RS.2,95,86,904/- AS INCOME OF YOUR APPELLANT WHICH IS SHOWN AS RECEI VABLE FROM THE MEMBERS. AS PER FURTHER SUBMISSIONS VIDE LETTER DATED 8/10/ 2012 IT WAS SUBMITTED AS UNDER: . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 5 A PLOT OF LAND ADMEASURING 1762.5OSQ. METERS WERE ALLOTTED UNDER WORLD BANK PROJECT 26-11-1992. THE MAHARASHTRA HOUSING AND DEV ELOPMENT AND AUT/7ORIFR HAD APPROVED 54 MEMBERS FOR THE PLOT BY A LETTER DATED 18-08-1994. THE 54 MEMBERS FORMED A COOPERATIVE HOUSING SOCIETY UNDER THE NAME VERSOVA SANDEEP SAROVAR COOPERATIVE HOUSING SOCIETY LTD. THE APPELLANT IS A REGISTERED CO-OPERATIVE HOUSING SOCIETY, REGISTERED ON 06-09-1994. FROM THE BEGINNING THE SOCIETYS ACCOUNTS WERE NEIT HER FINALIZED NOR AUDITED IN ANY OF THE FINANCIAL YEAR. THERE WERE ALSO MANY ADMINISTRA TIVE LAPSES ON THE PART OF THE COMMITTEE, WHICH RESULTED IN APPOINTMENT OF AN ADMI NISTRATOR BY THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES. ONE MR. PRALAP G DESAI H AD TAKEN OVER THE ADMINISTRATION OF THE SOCIETY ON 31-12-1999. IN 2001, SOME OF THE MEMBERS TOOK OVER AS OFFICE BE ARERS OF THE SOCIETY. AS ACCOUNTS WERE NOT FINALIZED NO AUDIT WAS CARRIED OUT BY THE SOCIETY. HOWEVER, THE ADMINISTRATOR APPOINTED A CERTIFIED AUDITOR, MR. PRAMOD G SHIRAL, THE GOVERNMENT AUDITOR. TO AUDIT THE SOCIETYS ACCOUNTS, HE HAD PREPARED STATEMENT O F AFFAIRS FOR THE PERIOD 06-09-1 994 TO 31 -03-2006 AND HAD GIVEN A CONSOLIDATED STATEME NT OF AFFAIRS AS ON 31 -03-2006. THE GOVERNMENT AUDITOR HIMSELF WHILE REFERRING TO T HE BALANCE SHEET FOR THE PERIOD ENDED 31-03-2006, HAD EXPRESSED IN HIS REPORT AS UN DER: AS THE BOOKS OF ACCOUNTS WERE NOT MAINTAINED PROPE RLY AND NOT GIVING DETAILED INFORMATION AS REQUIRED BY THE LAW, I AM UNABLE TO CONFIRM THE CORRECTNESS OF THE BOOKS OF ACCOUNTS MAINTAINED BY THE SOCIETY. IN SPITE OF THIS REMARK, THE GOVERNMENT AUDITOR HAD PREPARED A BALANCE SHEET AS ON 31-03-2006, FORMING PART OF HIS AUDIT REPORT, BUT N OT SIGNED EITHER BY HIMSELF OR BY ANY OF THE COMMITTEE MEMBERS. THE BALANCE SHEET CONTAINED THE FOLLOWING FIGURES, AMONG OTHERS, ON THE CREDIT SIDE OF THE BA LANCE SHEET: PARTICULARS AMOUNT SUBSCRIPTION FROM MEMBERS FOR LAND & BUILDING 9,04,39,840.00 SUBSCRIPTION FROM MEMBERS FOR SHOPS 64,80,000.00 SUBSCRIPTION FROM MEMBERS FOR PRE-CONST. EXP. 1,06, 72,460.00 SUBSCRIPTION FROM MEMBERS FOR PARKING DEPOSIT 1,40,000.00 10,77,32,300.00 CURRENT LIABILITIES AND PROVISIONS 29,38,235.90 SUSPENSE ACCOUNT 3,85,42,805.00 DIFFERENCE IN THE TRIAL BALANCE 4,58,623.65 INCOME AND EXPENDITURE ACCOUNT 32,227.25 THE BALANCE SHEET CONTAINED THE FOLLOWING FIGURES, AMONG OTHERS, ON THE DEBIT SIDE OF THE BALANCE SHEET. PARTICULARS AMOUNT LAND AND BUILDING 8,32,57,313.00 DUES FROM MEMBERS TOWARDS LAND & BUILDING 2,93,53,6 58.65 DUES FROM MEMBERS TOWARDS MAINTENANCE 2,23,265. 35 2,95,86,904.00 SUSPENSE ACCOUNT 3,64,83,618.00 . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 6 BACKGROUND OF THE ASSESSMENT PROCEEDINGS: FOR THE RELEVANT ASSESSMENT YEAR 2006-07, THE ASSES SING OFFICER HAD EXPRESSED THAT AS HE HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF PROVISIONS OF SECTION 147 OF THE INCOME TAX ACT; HE HAD SERVED A NOTICE DATED 31 -12- 2010 U/S 148 ON 11-01-2011 TO THE APPELLANT TO FILE RETURN OF IN COME. THEREAFTER, A SECOND NOTICE DATED 21-09-2011 WAS SERVED ON THE AP PELLANT REQUESTING TO FILE RETURN OF INCOME IMMEDIATELY. IN RESPONSE TO THIS, THE APP ELLANT FILED A LETTER ON 04-10-2011 EXPLAINING THE REASONS FOR NOT FIFING RETURN OF INC OME AND NOT ATTENDING TO THE ASSESSING OFFICER. THEN, THE APPELLANT WAS ASKED, VIDE LETTER DATED 26 -11-2011, TO ATTEND TO HIS OFFICE ALONG WITH SUPPORTING DOCUMENTS BY 01 -02-2011. ON THIS LETTER, IT WAS ALSO INFORMED TO THE APPELLANT THAT FAILURE TO COMPLY WITH THIS L ETTER WILL RESULT IN THE ASSESSING OFFICER COMPLETING THE ASSESSMENT U/S 144 OF INCOME TAX ACT. WHEN THE APPELLANT DID NOT FILE ANY RETURN NOR FILED ANY DETAILS, THE ASSE SSING OFFICER COMPLETED THE ASSESSMENT U/S 144 OF THE INCOME TAX ACT. THE ASSESSING OFFICER, FOR THE PURPOSE OF COMPLETIN G THE ASSESSMENT, ESTIMATED AN INCOME OF RS.2,95, 86,900.00 BEING THE CONTRIBUTION S RECEIVABLE FROM MEMBERS TOWARDS BUILDING CONSTRUCTION AND TOWARDS MAINTENANCE. SINC E THE APPELLANT HAD NOT GIVEN ANY EXPLANATION IN RESPECT OF THE AMOUNT COLLECTED. THE ASSESSING OFFICER TREATED THIS AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX AC T. THEREFORE, THE ASSESSING OFFICER COMPUTED THE TOTAL INCOME TAX OF THE APPELLANT AT PS.2,77,81,459. 00 OUR SUBMISSIONS: FOR A. Y. 2006-07, THE LEARNED ASSESSING OFFICER HA S CONSIDERED THIS AMOUNT, WHICH IS AN AMOUNT RECEIVABLE FROM MEMBERS, AS THE AMOUNT RE CEIVED, WE FEEL THAT THE ASSESSING OFFICER IS RATHER CONFUSED BETWEEN A PAR/ V/SON AND CASH CREDITS. MADAM, AT NO STRETCH OF IMAGINATION CAN A PROVISION FOR AN IN COME BE TREATED AS ACTUAL INCOME. AS PER SECTION 68 OF THE INCOME TAX ACT, CASH CREDITS ARE THOSE WHICH ARE FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOU S YEAR. MADAM, THE ASSESSEE I.E. A CO-OPERATIVE HOUSING SOC IETY, COLLECTING CONTRIBUTIONS FROM THE MEMBERS FOR THE PURPOSE OF MAINTENANCE OF THE S OCIETY, ANY SURPLUS CONTRIBUTIONS, REFLECTED IN THE INCOME AND EXPENDITURE OF THE SOCI ETY IS, SUBJECT TO CERTAIN EXCEPTIONS, GENERALLY EXEMPT ON THE PRINCIPLE OF MUTUALITY. THE LEARNED ASSESSING OFFICER HAS WITHOUT UNDERSTANDING THE PRINCIPLES OF ACCOUNTANC Y, THE CONSIDERED BALANCES IN THE BALANCE SHEET AS INCOME FAT ONE PARTICULAR ASSESSME NT YEAR. HE HAS ALSO ERRONEOUSLY ESTIMATED INCOME AT 10% INCREASE IN EACH OF THE SUB SEQUENTLY ASSESSMENT YEARS. THUS, WE FEEL THAT THE LEARNED ASSESSING OFFICER HA S MADE AN INFRUCTUOUS DEMAND FOR ALL THE ASSESSMENT YEARS. MADAM, THE APPELLANTS SINCERE PRAYER TO YOUR HONOU R IS TO GIVE AN OPPORTUNITY TO SUBMIT THE BALANCE SHEETS AND INCOME AND EXPENDITUR E, WHEREVER APPLICABLE, FROM THE DATE OF REGISTRATION TO 31-03-2008 TO THE LEARNED A SSESSING OFFICER. THE APPELLANT ALSO . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 7 SHOULD BE GIVEN AN OPPORTUNITY TO SUBMIT RELEVANT A VAILABLE DOCUMENTS SO THAT THE LEARNED ASSESSING OFFICER CAN MAKE A PROPER ASSESSM ENT FOR ALL THE THREE YEARS. 5.1 THE ASSESSEE FILED ADDITIONAL EVIDENCES ON THE GROUND THAT DURING THE ASSESSMENT PROCEEDINGS SUFFICIENT TIME TO PREPARE A ND FURNISH RELEVANT DETAILS WAS NOT GRANTED. THE ADDITIONAL EVIDENCES WERE FORWARD ED BY LD. CIT(A) TO AO VIDE LETTER DATED 16/10/2012 THE TEXT OF WHICH IS AS UNDER: 2. THE ASSESSMENT FOR THE ABOVE REFERRED ASSESSMEN T YEARS WAS COMPLETED U/S 144 OF THE I T ACT, .1961 DETERMINING TOTAL INCOME AT R S.2,95,86,900/-, RS.3,25,45,590/- AND RS.3,57,80,150/- RESPECTIVELY ON THE BASIS OF I NTERNAL AUDIT REPORT AVAILABLE ON THE RECORD FOR F. Y. 2005-06, AS THE APPELLANT DID NOT FILE THE RETURN OF INCOME, BALANCE SHEET ALONG WITH ITS ANNEXURES AND P & L A/C DESPIT E SEVERAL REQUESTS MADE BY YOU. IN THIS REGARD, LAM FORWARDING HERE WITH THE WRITTEN S UBMISSIONS OF THE AR DATED 10-10- 2012 ALONG WITH ITS ENCLOSURES IN RESPECT OF THE AB OVE ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT AND BALA NCE SHEET AND INCOME AND EXPENDITURE ACCOUNTS FROM THE PERIOD 06-09-1994 TO 31 -03-2006. YOU ARE REQUESTED TO GO THROUGH THE SUBMISSIONS OF THE ASSESSEE AND SUBM IT YOUR COMMENTS OR OBJECTIONS, IF ANY, AS REQUIRED UNDER RULE 46A OF I T RULES, .1962 YOU MAY CALL FOR FURTHER DETAILS, IF REQUIRED, FOR THIS PURPOSE. THE AO SUBMITTED REMAND REPORT VIDE LETTER DATED 29 /10/2012, THE CONTENTS OF WHICH ARE AS UNDER: THE ABOVE MENTIONED ASSESSEE HAS NEVER RESPONDED T O ANY OF THE NOTICES ISSUED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FAR A. Y. 2006-07, 2007-08 & 2008-09. IN SPITE OF ENOUGH OPPORTUNITIES BEING GIVEN, THE ASSE SSEE FAILED TO SUBMIT THE BASIC DETAILS I.E. INCOME / EXPENDITURE & BALANCE SHEET F OR THE RELEVANT ASSESSMENT YEARS. THEREAFTER, THE ASSESSMENT WAS COMPLETED EX-PARTE U /S 144 OF THE ACT, 28-12-2011 ON THE BASIS OF THE INTERNAL AUDIT REPORT PREPARED BY THE STATUTORY AUDITOR ON THE PANEL OF BMC, SINCE IT WAS GETTING TIME BAN-ED BY LIMITATION . AS PER HIS REPORT, DURING THE F. Y. 2005-06, THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 2,95,86,909/- TOWARDS BUILDING REPAIRS AND MAINTENANCE. SINCE THE ASSESSEE FAILED TO GIVE ANY EXPLANATION IN RESPECT OF THE AMOUNT COLLECTED, THE SAME WAS CORRECTLY TAX ED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. AS PER SECTION 2(12A) OF THE INCOME TAX ACT, 1961 B OOKS INCLUDES LEDGERS, DAY BOOKS, CASH BOOKS, ACCOUNT BOOKS AND OTHER BOOKS, WHETHER KEPT IN THE WRITTEN FORM OR AS PRINT OUTS OF DATA STORED IN FLOPPY, DISCS, TAPE OR ANY OTHER FORM OF ELECTRO - MAGNETIC DATA STORAGE DEVICE. IN CENTRAL BUREAU OF INVESTIGA TION V/S V.C. SHUKLA (1998) 3 SCC 410, THE SUPREME COURT HAS HELD THAT BOOK ORDINAR ILY MEANS A COLLECTION OF SHEETS OF PAPER OR OTHER MATERIAL, BLANK, WRITTEN OR PRINTED, FASTENED OR BOUNDED TOGETHER SO AS TO FORM A MATERIAL WHOLE. THUS, SPIRAL NOTEBOOKS AN D SPIRAL PADS CAN BE REGARDED AS BOOKS WITHIN THE MEANING OF SECTION 34 OF THE IND IAN EVIDENCE ACT, 1872. . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 8 IN THE INSTANT CASE, THE INTERNAL AUDIT REPORT IS P REPARED BY A STATUTORY AUDITOR APPOINTED BY THE BMC THE STATUTORY AUDITOR HAS SUBM ITTED THE REPORT ON THE BASIS OF DOCUMENTS, LEDGERS, ACCOUNTS ETC., PRESENTED BY THE ASSESSEE. THE ASSESSEE HAS NEVER CHALLENGED THE INTERNAL AUDITORS REPORT OR BROUGHT OUT OF THE DISCREPANCIES, IF ANY, IN THE SAME, DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. THE INTERNAL AUDIT REPORT IS AN AUTHENTIC REPORT, WHICH IS DULY SIGNED & DATED AND BASED ON FACTS. THE ONUS LIES ON THE ASSESSEE TO PROVE THAT IT IS NOT A CASH CREDIT AS HELD BY THE SUPREME COURT IN THE CASE OF RISHAN DI HATTI VS CIT (1977) 107 ITR 983 (SC). IT IS FURTHER OBSERVED FROM THE INCOME / EXPENDITU RE ACCOUNT & BALANCE SHEET SUBMITTED NOW, NEITHER IT IS SIGNED OR DATED. AS SU CH IT DOES NOT HAVE ANY AUTHENTICITY. IT IS FURTHER SUBMITTED THAT THE ASSESSEES CASE FO R A. Y. 2009-10 IS ALSO UNDER SCRUTINY & NO SUBMISSIONS HAVE BEEN MADE TILL DATE IN RESPON SE TO THE NOTICES ISSUED ON 28-03- 2012, 25-07-2012 AND 09-10-2012. EVEN THE ROI FOR A . Y. 2009-10 IS NOT FILED TILL DATE. AS PER RULE 46A(1), THE APPELLANT SHALL NOT BE ENTI TLED TO PRODUCE BEFORE THE (DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS), ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN T HE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE (ASSESS ING OFFICER) EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY: A) WHERE THE (ASSESSING OFFICER) HAS REFUSED TO ADM IT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE, WHICH HE WAS CALLED UPON TO PRODUCE BY TH E (ASSESSING OFFICER) OR C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE, THE (ASSESSING OFFICER) ANY EVIDENCE, WHICH IS RELE VANT TO ANY GROUND OF APPEAL; OR D) WHERE THE (ASSESSING OFFICER) HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO A DDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. IN VIEW OF THE ABOVE STATED RULE, I OBJECT TO THE A SSESSEES PLEA FOR PRODUCTION ADDITIONAL EVIDENCE ON THE FOLLOWING GROUNDS: I. SINCE THE ASSESSEE NEVER PRODUCED THESE DOCUMENT S DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE QUESTION OF REFUSING TO ADMIT THE EVIDENCES DOES NOT ARISE. II. THE APPELLANT HAS NOT MADE OUT ANY NEW CASE TO PROVE THAT IT IS PRE VENTED BY SUFFICIENT CAUSE TO SUBMIT THESE DETAILS. AS PER AP PELLANTS OWN SUBMISSION ON FAILURE ON THE PART OF THE APPELLANT TO DO ITS DUTI ES, THE ADMINISTRATOR HAD TO APPOINT A GOVT. AUDITOR WHO PREPARED THE ACCOUNTS F OR THE PERIOD 06-09-1 994 TO 31-03-2006. THIS REPORT IS SUBMITTED BY THE AUDITOR IN OCTOBER, 2006. HOWEVER, TILL THE DATE OF COMPLETION OF ASSESSMENT PROCEEDIN G ON 28-12-2011 I.E. FOR OVER FIVE YEARS, THE ASSESSEE HAS NEVER DISPUTED THE STA TE AUDITORS REPORT OR RECONCILED THE DISCREPANCIES, IF ANY. . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 9 III. AS STATED EARLIER ENOUGH OPPORTUNITIES HAVE BE EN PROVIDED TO THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. EVEN A T PRESENT THE ASSESSEE HAS NOT FILED ANY DETAILS FOR THE NOTICES ISSUED ON 28- 03 -2012, 25-07-2012 AND 09- 10-2012 FOR A. Y. 2009-10, WHICH IS UNDER SCRUTINY. IN RESPONSE TO AFOREMENTIONED REMAND REPORT OF THE AO THE SUBMISSIONS OF THE ASSESSEE MADE BEFORE LD. CIT(A) WERE AS UNDER: THE LEARNED ASSESSING OFFICER HAD ASSESSED THE AB OVE INCOME BASED ON THE STATEMENT OF AFFAIRS PREPARED BY THE GOVERNMENT NOM INATED AUDITOR. IN THIS CONNECTION, YOUR APPELLANT SUBMITS THAT THE SAME STATEMENT OF A FFAIRS HAS BEEN ADDRESSED TO THE ADMINISTRATOR OF THE SOCIETY, WHEREIN THE PERIOD OF SUCH REPORT HAS BEEN MENTIONED AS 06-09-1994 TO 31-03-2006. THIS CLEARLY SHOWS THAT T HE AMOUNT MENTIONED IN THE STATEMENT OF AFFAIRS ARE NOT ONLY RELATED TO THE AC COUNTING PERIOD CORRESPONDING THE A. Y. 2006-07 BUT ALSO INCLUDES THE PERIOD FROM 06-09 -1994 TO 31-03-2003. YOUR APPELLANT HAS FURTHER TO SUBMIT YOUR HONOUR WI LL APPRECIATE THAT THE UNEXPLAINED AMOUNT ASSESSED AS CASH CREDIT/LOAN IS ONLY ASSESSA BLE AND CAN BE ADDED AS INCOME OF YOUR APPELLANT IN THE YEAR OF RECEIPT, YOU WILL APPRECIATE THAT THE AMOUNT OF RS.2,95,86,904/- IS SHOWN AS RECEIVABLE FROM THE ME MBERS AS ON 31-032006 AND NOT AS RECEIVED DURING THE YEAR. THE ABOVE SAID FACTS H AVE BEEN CLEARLY AND PROPERLY SHOWN BY THE AUDITOR IN THE STATEMENT OF AFFAIRS AS TOWARDS ASSETS AS RECEIVABLE, THE SAID AUDITOR A/SO MENTIONED THE SAID FIGURE IN PARA 3 ON PAGE 16 OF HIS REPORT. HOWEVER, THE LEARNED ASSESSING OFFICER HAD ASSESSED THE SAID AMOUNT U/S 68, WHICH CLEARLY SHOWS THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND WHILE FRAMING HIS ASSESSMENT BASED ON THE STATEMENT OF AFFAIRS. THE L EARNED ASSESSING OFFICER HAD ALSO NOT APPRECIATED THE FACT THAT THE STATEMENT OF AFFA IRS IS FOR THE PERIOD FROM 06-09-1994 TO 31-03-2006. IN THIS CONNECTION, YOUR APPELLANT SUBMITS THAT THE APPELLANT IS A CO-OPERATIVE HOUSING SOCIETY DULY REGISTERED UNDER THE CO-OPERATIVE HOUS ING SOCIETY ACT VIDE REGISTRATION NO. BOM/MHADA/HS&/8746 OF 1994 DATED 06-09-1994. THE SO CIETY WAS ALLOTTED BY MHADA TO CONSTRUCT RESIDENTIAL FLATS FOR THE MEMBER S OF THE SOCIETY AND ACCORDINGLY THE SOCIETY HAS COLLECTED FUNDS FROM THE MEMBERS AN D CONSTRUCT THE RESIDENTIAL BUILDINGS FOR THE USE OF RESIDENCE BY THE MEMBERS, THE SAID CONSTRUCTION OF BUILDING HAD GOT COMPLETED IN THE YEAR 2004-05 AND THE MEMBE RS HAD OCCUPIED THE SAID RESIDENTIAL FLATS IN THE PERIOD 2004-05. THE ABOVE PARA DEARLY SHOWS THAT THE SOCIETY HAD CO LLECTED FUNDS FROM THE MEMBERS PR/OR TO 2005 AND MADE PAYMENTS FOR PLOT ALLOTTED B Y MHADA AS WELL AS CONSTRUCT/ON OF BUILDINGS FOR THE MEMBERS. YOUR HONOUR WILL APPR ECIATE THAT AS PER THE AUDITED ACCOUNT FOR THE YEAR ENDED 31-03-2006, THE SOCIETY HAD COLLECTED MAINTENANCE CHARGES FROM THE MEMBERS OF RS.21.L5LAKHS AND SPENT THE SAM E FOR MEMBERS UNDER MUTUALITY CONCEPT AND HAVE NOT EARNED ANY TAXABLE INCOME DURI NG THE YEAR UNDER CONSIDERATION. THE LEARNED ASSESSING OFFICER HAS FRAMED HIS ASSESS MENT ORDER FOR A. Y 2007-08 AND 2008-09 BY INCREASING THE ASSESSED INCOME BY 10% AN D CONTINUED TO ADD THE . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 10 ASSESSED INCOME FOR A.Y. 2006-07 IN 2007-08 AND 20 08-09 WITHOUT APPRECIATING THE FACTS AND WITHOUT APPLICATION OF MIND. YOUR HONOUR WILL APPRECIATE THAT YOU HAD ASKED FOR A REMAND REPORT FROM ASSESSING OFFICER VIDE YOUR LETTER DATED 1 6-10-2012. YOUR AP PELLANT THROUGH AN AUTHORIZED REPRESENTATIVE, CA, MR. SHANKAR IYER, HAS APPROACHE D THE ASSESSING OFFICER AND ENQUIRED ABOUT THE REQUIREMENTS FOR THE REMAND REPO RT. THE LEARNED ASSESSING OFFICER HAS CURTLY INFORMED THE AR THAT THE ASSESSMENT RECO RDS FOR A. 2006-07, 2007-08 AND 2008-09 HAD GONE FOR REVENUE AUDIT PURPOSES AND HE HAD NO RECORDS FOR THE TIME BEING AND HE WOULD LOOK INTO THE MATTER, THE LEARNED ASSE SSING OFFICER, HAS, WITHOUT GIVING ANY OPPORTUNITY TO YOUR APPELLANT HURRIEDLY SUBMITT ED HIS REPORT ON 29-10-2012 I.E. WITHIN A PERIOD OF 13 DAYS OF YOUR LETTER FOR THE R EMAND REPORT ONLY ON THE GROUND THAT NO FRESH EVIDENCE CAN BE ADMITTED AND ACCEPTED AT T HE APPEAL STAGE. IN THIS CONNECTION, THE LEARNED ASSESSING OFFICER FAILS TO APPRECIATE THAT YOUR APPELLANT HAS NOT SUBMITTED NOR HE COULD SUBMIT ANY AUDITED ACCOU NTS DURING THE COURSE OF THE ORIGINAL ASSESSMENT U/S.144 AND THE LEARNED ASSESSI NG OFFICER HAS FAILED TO APPRECIATE AND GIVE FURTHER OPPORTUNITY TO A NON -PROFIT ORGANIZATION LIKE A CO-OPERATIVE HOUSING SOCIETY CARRYING ON THE ACTIVITY UNDER MU TUALITY CONCEPT. THE LEARNED ASSESSING OFFICER ALSO FAILS TO APPRECIATE THAT HI GH PITCH ASSESSMENT WITHOUT APPRECIATING THE STATUS OF YOUR APPELLANT AS A COOP ERATIVE HOUSING SOCIETY WOULD NOT SERVE ANY PURPOSE AND CONTINUED TO KEEP YOUR APP ELLANT UNDER PRESSURE FOR THE RECOVERY OF HIS ILLOGICAL DEMAND FOR THE REASONS BEST KNOWN TO HIM. IN VIEW OF THE ABOVE FACTS YOUR APPELLANT CRAVES TO DELETE THE ARBITRARY ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER FOR A. Y.2006-07, 2007-08 AND 2008-09 RESPECTIVELY. 5.2 ON THESE SUBMISSIONS, UPHOLDING THE VALIDITY OF REASSESSMENT PROCEEDINGS LD. CIT(A) HAS CONFIRMED THE ADDITION WITHOUT REFERENC E TO THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE ON THE BASIS THAT ASSESS EE WAS GIVEN SUFFICIENT TIME AND OPPORTUNITY TO FURNISH COPY OF RETURNS FILED, THE D ETAILS OF CONSTITUTION OF SOCIETY, BANK ACCOUNT MAINTAINED BY THE SOCIETY ETC. THE A DDITION MADE BY THE AO WAS BASED ON THE BALANCE SHEET . THERE WAS CONTINUING NON-COMPLIANCE BY THE ASSESSEE. THE ASSESSEE HAS NOT BEEN ABLE TO ESTA BLISH GENESIS OF THESE FUNDS BUT ONLY STATED THAT THESE AMOUNTS WERE CARRIED OVER F ROM THE PREVIOUS YEARS ACCOUNT. FOR THESE REASONS LD. CIT(A) HAS UPHELD THE ADDITIO N FOR EACH OF THE YEAR. THE ASSESSEE IS AGGRIEVED AND HAS RAISED AFOREMENTIONED GROUNDS. . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 11 6. LD. AR SUBMITTED THAT ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FOR NOT SUBMITTING REQUIRED DETAILS DURING THE COURSE OF A SSESSMENT PROCEEDINGS AND REFERENCE FOR THAT CAN BE MADE TO THE REPLY OF THE ASSESSEE WHICH IS REPRODUCED IN THE ASSESSMENT ORDER ITSELF. HE SUBMITTED THAT DUR ING THE COURSE OF FIRST APPELLATE PROCEEDINGS THE ASSESSEE COULD GET ITS ACCOUNTS AUD ITED AND THOSE AUDIT REPORTS SUBMITTED HAVE BEEN IGNORED BY LD. CIT(A) DESPITE C ALLING REMAND REPORT FROM THE AO. HE SUBMITTED THAT THE ASSESSMENT IS CONTRARY T O THE FACTS AS THE ENTIRE AMOUNT WHICH IS ASSESSED WAS SHOWN RECEIVABLE ON ACCOUNT O F BUILDING REPAIR AND TOWARDS MAINTENANCE. HE SUBMITTED THAT ENTIRE AMOUNT COULD NOT BE ASSESSED. HE ALSO SUBMITTED THAT FOR OTHER YEARS THE FIGURE HAS BEEN TAKEN FROM THE INTERNAL AUDIT REPORT FOR A.Y 2006-07 AND FOR OTHER ASSESSMENT Y EARS 10% INCREASE HAS BEEN MADE TO ASSESS THE INCOME WHICH IS CONTRARY TO THE RECORD AND HAS NO SUPPORTING EVIDENCE TO ASSESS SUCH INCOME. HE SUBMITTED BEFOR E US FOLLOWING FACT SHEETS. THE COPIES OF THE DOCUMENTS MENTIONED IN THE FACT SHEET S ARE AVAILABLE IN THE PAPER BOOK. BRIEF FACTS 1. REASONS AS TO WHY THE DETAILS REQUIRED BY ASSES SING OFFICER COULD NOT BE FILED/SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE A SSESSEE WAS IN GREAT DIFFICULTY AS ITS ACCOUNTS WERE NEITHER PREPARED NOT AUDITED. THE B RIEF FACTS ARE AS UNDER: I) DATED 06/04/1993 ALLOTTING A PIECE OF LAND PG. N O.6 TO 8 II) DATED 30/09/199 POSSESSION OF PLOT WAS HANDED O VER AND LEASE AGREEMENT ENTERED AS WELL PREMIUM PAID - PG.14 III) DATED 02/05/1995 COMMENCEMENT CERTIFICATE RECE IVED. PG. 35 TO 42 IV) DATED 03/02/1996 SANCTION FROM FIRE BRIGADE PG. 43 TO 46. V) DATED 28/11/2004 SINCE SUBSTANTIAL NUMBER OF MEM BERS HAD OCCUPIED, THE FLATS AND NO MAINTENANCE WAS DONE BY PREVIOUS COMMITTEE AS MENTIONED IN DETAILS AT PAGE NO.1 & 2 OF THE PAPER BOOK AN ADHOC COMMITTEE WAS FORMED TO LOO K AFTER DAY-TO-DAY AFFAIRS. VI) DATED 04/08/2005 TO 14/09/2005 ELECTION OFFICER WAS APPOINTED BY DY. REGISTRAR TO HOLD THE ELECTIONS AND ELECTIONS HELD. PG. 64 TO 66 VII DATED 15/10/2005 THE NEW COMMITTEE ISSUED NOTIC ES TO CHIEF PROMOTER MR. D.K. KOLAMBKAR EX- SECRETARY TO HAND OVER THE RECORDS DOCUMENTS AND PAPERS OF THE SOCIETY ALONG WITH THE AUDIT REPORTS. PG. 68 . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 12 VIII) DATED 19/10/2005 MR. KOLAMBKAR REPLIED SAYING THAT NECESSARY DOCUMENTS WILL BE HANDED OVER TO THE NEWLY ELECTED COMMITTEE ON OR BEFORE 15/11/2005 PG. 69 TO 70. IX) DATED 02/12/2005 MR. KOLAMBKARS LETTER TO DY. REGISTRAR STATING THAT DUE TO UNAVOIDABLE CIRCUMSTANCES, HE WAS NOT ABLE TO HANDOVER THE RECORDS BY 15/11/2005 AND THEN ON 30/11/2005 HE WENT TO SECRETARY OF NEWLY ELECTED COMMITTEE WHO IS SAID TO HAVE REFUSED TO TAKE THE RECORDS SAYING THAT HE DOESNT REQUIRE THE SAME AND EVEN HAD REPORTED TO POLICE. HE FURTHER INFORMED T HE DY. REGISTRAR THAT NOW HE WOULD HAND OVER THE SAME TO H IS OFFICE. PG. 71. X) DATED 03/12/2005 MR. KOLAMBKARS LETTER TO THE C HAIRMAN OF THE SOCIETY INFORMING THAT HE WOULD HAND OVER THE RECORDS IN TH E OFFICE OF THE DY. REGISTRAR AND THE CONCERNED CHAIR MAN SHOULD TAKE IT FROM THERE AFTER INFORMING HIM IN WR ITING. PG. 72 XI) DATED 05/12/2005 AS MR. KOLAMBKAR HAD NOT SUBMI TTED ANY RECORDS SOCIETY WROTE A LETTER TO THE DY.REGISTRAR COMPLAINING ABOU T THE SAME TO THE DY. REGISTRAR. PG. 73 TO 78 XII) DATED 24/12/2005 SOCIETYS LETTER TO MR. KOLAM BKAR FOR HANDING OVER THE RECORDS/AUDIT REPORTS TO ITS. PG. 79 TO 81 XIII) DATED 18/01/2006 LETTER FROM DY. REGISTRAR TO MR.KOLAMBKAR FOR SUBMITTING THE RECORDS. PG. 82 XIV) DATED 05/02/2006 THE OFFICE BEARERS OF THE SOC IETY SUBMITTED RESIGNATION FOR THE REASONS OF NON CO- OPERATION OF MEMBERS AND VESTED INTEREST BY A FEW MEMBERS . PG. 83 XV) DATED 17/02/2006 REGISTRATION OF THE MEMBERS AC CEPTED BY DY. REGISTRAR AND APPOINTMENT OF ADMINISTRATOR. PG.84 TO 85 XVI) DATED 24/03/2006 BOARD OF ADMINISTRATIONS WAS APPOINTED BY DY. REGISTRAR COMPRISING OF THREE MEMBERS BUT SUBSEQUEN TLY CHANGED TO TWO MEMBERS BY DROPPING ONE MEMBER. PG. 86 TO 87 XVII) DATED 22/08/2006 BOARD OF ADMINISTRATOR (SHRI C.G. SALVI) TO MR. KOLAMBKAR DEMANDING FOR COPIES OF SANCTIONED AND APPROVED PLA NS BUILDING, LETTER OF ALLOTMENT MADE TO MEMBERS AND ORIGINAL AUDIT REPORTS UPTO 2003-04. PG. 90 TO 91 XVIII) DATED 19/10/2006 DY.REGISTRAR WRITES TO ADMI NISTRATOR TO PREPARE A FINAL LIST OF MEMBERS START ELELCTION PROCESS AND THEREAF TER APPOINTS NEW ADMINISTRATOR SHRI VASANT SHINDE AFTER DISSOLVING THE ENTIRE BOARD PG. 92 XIX) DATED 29/4/2007 TO 16/10/2008 ELECTION PROCESS STARTED BY ANNOUNCING THE SCHEDULE , AND APPOINTMENT OF ELECTION OFFICER. PG. 95 TO 96 XX) DATED 07/11/2008 AS PREVIOUS ADMINISTRAORS AP POINTED ON 12/10/2007 WORK WAS NOT FOUND SATISFACTORY NEW ADMINISTRATOR W AS APPOINTED PG. 97. XXI) DATED 18/04/2009 SPECIAL GENERAL BODY MEETING OF ADMINISTRATORS WAS HELD AND WHERE IT CAME TO LIGHT THAT HE DID NOT HAV E ANY INFORMATION ABOUT THE ACCOUNTS, STATUS OF AUDIT REP ORT AND THE WORK DONE BY PREVIOUS ADMINISTRATOR MR. SAN JAY . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 13 KOLGE. PG. 98 TO 102. XXII) DATED 26/07/2009 TO 05/09/2007 SPECIAL GENERAL BODY MEETING HELD, NAMES WERE SUGGESTED FOR THE COMMITTEE AND COMMITTEE FORMED. PG. 103 TO 111 XXIII DATED 07/02/2010 FIRST EXTRA ORDINARY GENERAL BODY MEETING OF THE NEW COMMITTEE HELD AFTER TAKING OVER THE SOCIETYS ADMINISTRATION FROM THE ADMINISTRATOR. FROM THE ABOVE IT CAN BE SEEN THAT THE PRESENT COMM ITTEE HAS EFFECTIVELY TAKEN OVER THE CHARGE ONLY FROM 07/02/2010, AND HENCE THEY COULD N OT GET THE ACCOUNTS PREPARED BY THE TIME. 2) NOTICE U/S. 148 DATED 31/12/2010 SERVED ON 11/01 /2011 FOR A.YS 2006-07 TO 2008-09 WERE RECEIVED IN RESPONSE TO WHICH NO RETUR NS WERE FILED. 3) THEREAFTER NOTICE U/S. 143(2) AND 142(1) WERE IS SUED IN RESPONSE TO WHICH ASSESSEE SOCIETY GAVE A DETAILED REPLY VIDE LETTER DATED 04/ 10/2011 WHICH THE LEARNED ASSESSING OFFICER HAS BEEN KIND ENOUGH TO REPRODUCE AT PAGE 2 OF THE ASSESSMENT ORDER WHERE IN BRIEF IT IS SUBMITTED THAT SINCE SOC IETY DID NOT HAVE ANY RECORDS AS IT WAS BEING ADMINISTERED BY THE ADMINISTRATOR FOR MOS T OF THE PERIOD IT IS NOT POSSIBLE TO FILE THE RETURNS. HOWEVER THE SOCIETY HAD EVEN REQ UESTED TO THE DEPUTY REGISTRAR FOR EXTENSION OF AGM DATE DUE TO NON-FINALISATION OF OL D ACCOUNTS FOR F.Y. 2010-11 FOR AGM PURPOSES. 4) FROM THE ABOVE IT CAN BE SEEN THAT ASSESSEE SOCI ETY HAS BEEN CONSISTENTLY MAKING EFFORTS TO COLLECT THE RECORDS FROM ITS EX-SECRETAR Y WHO WAS THE CHIEF PROMOTER OF THE SOCIETY AND HAD ALL THE RECORDS WITH HIM. BUT INSPI TE OF THEIR BEST EFFORTS INCLUDING MAKING COMPLAINTS TO THE DEPUTY REGISTRAR OF CO-OPE RATIVE SOCIETIES WAS NOT PROVIDED THE SAME WAS PREVENTED BY SUFFICIENT CAUSE BOTH FOR NOT BEING ABLE TO FILE THE RETURNS AS ALSO PROVIDING THE DETAILS. 5) THE LEARNED ASSESSING OFFICER DID NOT APPRECIATE THE FACT THAT DURING RELEVANT PREVIOUS YEARS PRESENT MANAGING COMMITTEE WHICH WAS NOT IN EXISTENCE HAD NOT RECEIVED ANY PREVIOUS RECORDS FOR WHICH IT HAD TAKE N ALL THE EFFORTS AND AS SUCH ASSESSEE DESERVES TO BE GIVEN AN OPPORTUNITY TO PRE SENT ITS CASE ON THE BASIS OF NEW BALANCE SHEETS, INCOME AND EXPENDITURE A/CS. ETC. W HICH HAVE BEEN GOT PREPARED BY AN APPROVED AUDITOR (UNDER THE SOCIETIES ACT) WITH WHATEVER DETAILS IT HAD. BESIDES, THE SOCIETY HAD FILED AUDITED ACCOUNTS FOR INDIVIDUAL ASSESSMENT YEARS BEFORE THE HONBLE CIT(APPEALS). THE LEARNED CIT(A) FORWARDED THE SAME TO THE LEARNED A.O. FOR REMAND REPORT. HOWEVER, THE LEARNED A.O. STATED THA T AS THE ASSESSEE HAS NOT SUBMITTED THE STATEMENT OF ACCOUNTS AT THE TIME OF ASSESSMENT , IT CANNOT NOW BE ACCEPTED. HENCE THE CIT(A) REFUSED TO ACCEPT THE ADDITIONAL EVIDENCE PR ODUCED BEFORE THE LEARNED CIT(A). IT IS PRAYED THAT THE ASSESSMENT BE SET ASIDE, AS THE SAID EVIDENCES ARE NOW PRODUCED BEFORE THIS HONBLE TRIBUNAL. REGARDING THE MERITS OF THE CASE IT IS FURTHER SUBM ITTED THAT THE ADDITIONS MADE U/S. 68 ARE THE AMOUNT RECEIVABLE BY THE SOCIETY FROM ITS MEMBE RS FOR CONSTRUCTION AS WELL AS MAINTENANCE. BESIDES, THIS WAS A CONSOLIDATED ACCOU NT PREPARED FOR OVER 12 YEARS AND HENCE . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 14 THIS CANNOT FORM PART OF ANY ADDITION. BESIDES EVER Y YEAR 10% ADDITION HAS BEEN MADE BY THE A.O. WHICH IS UNKNOWN AS PER PRINCIPLES OF ACCOUNTA NCY. 6.1 THUS IT WAS PLEADED BY LD. AR THAT IN THE INTER EST OF JUSTICE THE MATTER SHOULD BE RESTORED TO THE FILE OF AO WITH A DIRECTION TO F RAME DENOVO ASSESSMENT AFTER GIVING THE ASSESSEE REASONABLE OPPORTUNITY OF HEARING AN D PLACING ALL THE MATERIALS ON RECORD. 7. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY LD. CIT(A). LD. DR PLEADED THAT IN ABSENCE OF ANY DETAILS FILED BY THE ASSESSEE IN RESPONSE TO QUERIES RAISED BY THE AO THE ASSESSMENTS WERE RIGHTLY FRAME UNDER SECTION 144 OF THE ACT AND THESE ASSESSMENTS HAVE RIGHTLY BEEN CONFIRMED B Y LD. CIT(A). 8. WE HAVE HEARD BOTH PARTIES AND THEIR CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. KEEPING IN VIEW THE FACTS AND CIRCUMST ANCES OF THE CASE, WE ARE OF THE OPINION THAT ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FOR NOT PRODUCING THE RELEVANT DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ALL THESE DETAILS WERE FURNISHED DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS. IN OUR CONSIDERED OPINION THOSE DETAILS WERE REQUIRED TO B E TAKEN INTO CONSIDERATION FOR ADJUDICATING THE APPEAL OF THE ASSESSEE. FOR THE C LARITY OF FACTS REPLIES OF THE ASSESSEE AND OTHER CONTENTS HAVE ALREADY BEEN REPRO DUCED IN THE ABOVE PART OF THIS ORDER. IN THIS VIEW OF THE SITUATION, WE ARE OF TH E OPINION THAT THE REQUEST MADE BY THE LD. AR SHOULD BE ACCEPTED IN THE INTEREST OF JU STICE. ACCORDINGLY, WE RESTORE ALL THESE MATTERS TO THE FILE OF AO WITH A DIRECTION TO FRAME DENOVO ASSESSMENT IN RESPECT OF ALL THE THREE YEARS AFTER GIVING THE ASS ESSEE A REASONABLE OPPORTUNITY OF HEARING. THE ASSESSEE WILL PLACE ALL THE MATERIAL ON RECORD WHICH WILL BE HELPFUL IN FRAMING THE LAWFUL ASSESSMENT FOR ALL THE YEARS UND ER CONSIDERATION. WE DIRECT ACCORDINGLY. 8.1 AS WE ARE RESTORING THESE ASSESSMENTS TO THE FI LE OF AO FOR DENOVO ASSESSMENT AS PER DIRECTIONS GIVEN ABOVE WE DO NOT CONSIDER IT NECESSARY TO GO INTO EACH OF THE . / ITA NO.4388 TO 4390/MUM/2013 ! ! ! ! / ASSESSMENT YEARS 2006-07 TO 2008-09 15 GROUNDS AS ALL THESE ISSUES HAVE TO BE CONSIDERED B Y THE AO WHILE FRAMING THE DENOVO ASSESSMENT. 9. IN THE RESULT, FOR STATISTICAL PURPOSES, ALL THE SE APPEALS FILED BY THE ASSESSEE ARE TREATED TO BE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/11/2013 . * ,-! / 0 1 13/11/2013 - * 2 3 SD/- SD/- ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 0 DATED 13/11/2013 . . . . * ** * '+45 '+45 '+45 '+45 65!+ 65!+ 65!+ 65!+ / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '(#& / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 582 '+ , , / DR, ITAT, MUMBAI 6. 2 9 / GUARD FILE. . . . . / BY ORDER, (5+ '+ //TRUE COPY// : :: : / ; ; ; ; $ $ $ $ (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS