KONKAN CO-OP HOUSING SOCIETY LTD., MUMBAI V. DCIT-21(2), MUMBAI

ITA 4762/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4733 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 16-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJENDRA KODREKAR
• Keywords: TDS
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , H BENCH MUMBAI BEFORE : SHRI VIKAS AWAS THY, JUDICIAL MEMBER & SHRI M.BALAGANESH, A CCOUNTANT MEMBER I TA NO. 4762 /MUM/ 2019 ( ASSESSMENT YEAR : 2010 - 11 ) M/S. KONKAN CO - OPERATI VE HOUSING SOCIETY LIMIT E D KONKAN NAGAR, K WING 1 ST FLOOR, LT. PRAKASH KOTNIS MARG, MAHIM ( WEST) , MUMBAI - 400016 V S. INCOME TAX OFFICER - 21(2)(1) PRESENT JURISDICTION - DCIT - 21(2) PIRAM AL CHAMBERS , LALBA UG, PAREL MUMBAI - 400012 PAN/GIR NO. AAAAK3406F (APPELLANT ) .. (RESPONDENT ) AS S ESSEE BY SHRI RAJENDRA KODREKAR REVENUE BY MS. BHARATI SINGH DATE OF HEARING 16 / 03/ 202 1 DATE OF PRONO U NCEMENT 21 / 04 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 4762/MUM/2019 FOR A.Y. 2010 - 11 ARISES OUT O F THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 33 , MUMBAI IN APPEAL NO. CIT(A) - 33/RG.21/478/15 - 16 DATED 26/04/2019 (LD. CIT(A) IN SHORT) IN THE MATTER OF IMPOSI TION OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) . 2. AT THE OUTSET WE FIND THAT THERE IS A D ELAY OF 2 DAYS IN FILING OF THE APPEAL BY THE ASSESSEE. ON GOING THROUGH THE REASONS FOR THE SAME, W E ITA NO . 4762 /MUM/ 2019 M/S. KONKAN CO - OP HOUSING SOC IETY LTD., 2 ARE INCLINED TO CONDONE THE DELAY AND ADMIT THE APPEAL OF THE ASSESSEE FOR ADJUDICATION . 2.1 . THE O N L Y IS SUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY U/S.271(1) (C) OF THE ACT IN THE SUM OF RS.4,32,517/ - IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. 3. WE HAVE HEARD RIVAL SUBMISSI O NS AND P ERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT ASSESSEE IS REGISTERED UNDER M AHARASHTRA CO - OPERATIVE S OCIETIES ACT . THE ASSESSEE SOCIETY WAS ESTABLISHED ON 17/11/1948. IT IS CLASSI FIED UNDER MAJOR C LASS HOUSING WITH SUB - CLASS T ENANT O WNE RSHIP H OUSING S OCIETY . THE SOCIETY HAS 90 MEMBERS INCLUDING THREE NOMINAL M EMBERS. TH E SOCIETY HAS 88 RESIDENT IAL FLATS AND H ALL PREMISES, FOR WHICH IT COLLECTS SOCIETY MAINTENANCE AND OTHER CHARGES , PROPERTY TAX, COMPANY ELECT RICITY , WATER CHARGES FROM A LL ITS MEMBERS FOR T HE USE OF PREMISES OF CO - OPERATIVE HOUS ING SOCIETY AT VARYING RATES IN PROPORTION T O THE AR EA, USAGE AND OTHER FACTS AS PER THE DECISIONS TAKEN BY ITS MANAGING COM MITTEE AFTER CON FIRMATION FROM ITS MEMBERS AT TH E GENERAL MEETING. FOR TH E A .Y.2010 - 11, SOCIETY F ILED ITS RETURN OF INCOME ON 31/03/2012 DECLARING TOTAL INCOME OF RS.NIL AFTER CLAIMING EXEMPTION OF AN AMOUNT OF RS.19,99,620/ - COLLECTED FROM ITS NOMINAL MEMBER, EUREK A FORBES LTD., FOR USE OF THE HALL PREMISES PROVIDED BY THE SOC IETY AS PER AGREEMENT DATED 04/05/2003. THE SAID CLAIM OF EXE MPTION WAS DULY REFLECTED IN THE ORIGINA L RETURN OF INCOME FILED ON 31/03/2012 AND ASSESSEE HAD CLAIMED TAX REFUND OF RS.3,22,166/ - T OWARDS TDS U/S.194 I OF THE ACT FROM THE SAID RECEIPT O F RS.1 9, 99,620/ - P AID FOR USE OF PREMISES BY ITS NOMINAL M EMBER, EUR EK A FORBES LTD., TOGETHER WITH THE FIGUR E OF TDS U/S.194 I OF THE ACT. WE FIND ITA NO . 4762 /MUM/ 2019 M/S. KONKAN CO - OP HOUSING SOC IETY LTD., 3 THAT ASSESSEE HAD MADE CLAIM FOR EXEMPTION ON THE GROUND OF MUTUALITY ON THE BASIS OF PROFESSIONAL ADVI C E RECEIVED F ROM T H E THEN TAX ADVIS O RS O F THE SOCIETY PERTAINING TO ITS ON GOING APPEAL FOR A.Y.2004 - 05 BEFORE T H IS TRIBU NAL. THIS TRIBUNAL FOR A.Y.2004 - 05 PARTLY ALLOWED THE APPEAL AND RESTORED THE IMPUGNED ISSUE T O THE FILE OF THE LD. AO VIDE ITS ORDER DATED 10/07/2 0 13. HOWEVER, THE ISSUE WAS DECIDED BY THE LD. AO AGAINST THE SOCIETY VIDE HIS ORDER DATED 31/10/201 4 FOR A.Y .2014 - 15 FOR E XEMPTION OF THE SOCIETY. THE SAID ORDER WAS PLACED BEFORE ITS MEMBERS BY I TS MANAGING COMMITTEE MEMBERS A ND THERE UPON, IT WAS DECIDED BY THE THEN SOCIETY OFFICIALS TO OFFER THE SAID INCOME FOR TAX DE SPITE RECEIPT OF CONTRA RY OPINION F R OM ITS T AX ADVISORS . THIS WA S DONE TO AVOID ADDITIONAL COST OF LITIGATION AND TO BUY PEACE FROM THE DEPARTMENT . AS SUCH, THE SOCIETY INT ER ALIA PAID THE TA X DUE ON THE SAID INCOME AND I T ELECTRONICALLY F ILED ITS RETURN OF INCOME FOR A.Y.2010 - 11 ON 11/0 2/2015 OFFER ING TO TAX THE AF ORESAID AM O UNT RECE IVED FROM NOMINAL MEMBER TO AVOID LITIGATION AND TO BUY PEAC E OF MIND , AS DECIDED BY THE NEW COMMITTEE MEMBERS OF THE SOCIETY ON THE BASIS OF DECISION TAKEN BY THE MAJORITY OF THE MEMBERS OF THE SOCIETY. THE ASSESSEE CLAIMED THAT COLLECTION OF RECE IP TS FROM I TS VARIOUS MEMBERS INCLUDING NOMINAL MEMBERS TOWARDS M AINTENANCE AND OTHER SERVICES, FACILITIES ETC., ARE N E ITHER COVERED BY THE DEFI NITION OF INCOME U/S.2 ( 24 ) OF THE ACT NOR ASSESSABLE AS INCOME LIABLE TO TAX IN ITS HANDS U/S.4 OF THE ACT BEING EX EM PT ON THE GROUND OF MUTUALITY. BEFORE US, IT WAS PLEAD ED BY THE LD. AR THAT THE OBSERVATIONS MADE BY THE LD. AO RE L AT ED TO THE INCOME DERIVED BY THE ASSESSEE SO CIETY FOR ALLOWING PURPOSEFUL COMMERCIAL USE OF ITS ALL PREMISES DOES NOT TAKE IT OUT OF EXEMPT C ATEGORY O N THE GROUNDS OF MUTUALI TY. RELIANCE IN THIS REGARD WAS PLACED ON THE DECISION OF THE HON BLE JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS. WELLINGTON CLU B REPORTED IN 302 ITR 279 (BOM). FURTHER, IT WA S ALSO ARGUED THAT TH E ASSESSEE SOCIETY H AD MADE C L A IM FOR EXEMPTION ON ITA NO . 4762 /MUM/ 2019 M/S. KONKAN CO - OP HOUSING SOC IETY LTD., 4 THE GROUNDS OF MUTUALITY AS THERE IS NO D ISTINCTION BETWEEN PERSONS AND NOMINAL MEMB ERS AS PER THE PROVISIONS OF THIS ACT. RELIANCE IN THIS REGARD WAS PLACED ON THE D ECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CA SE OF JALGA ON DISTRICT CO - OPERATIVE BANK LTD., VS. UNION OF INDIA REPORTED IN 134 TAXMA N 1 (BOM) . 3.1. WE FIND THAT THE ASSESSEE HAD FURNISHED F ULL, TRUE , CORRECT AND COMPLET E PARTICULARS OF ITS INCOME AND HAD NEITHER CONCEALED ANY INCOME NOR FI LED ANY I NA CCURATE PARTIC ULARS THEREOF. THE RECEIPT OF REN TAL INCOME WAS ALWAYS REC ORDED IN THE ORIGINAL RETURN FILED U/S.139 OF THE A CT AND EXEMPTION WAS CLAIMED ONLY ON THE GROUND OR MUTUALITY. THE RETURN FILED AFTER ISSUE OF NOTICE U / S 148 OF THE ACT OFFERING THE SAID INCOME T O TAX AFTER DI S POSAL OF APPEAL FILED BEFORE THIS TRIBUNAL WA S JUST TO BUY PEAC E AND AVOID COST OF LITI GATION. IN ANY CASE, THE ENTIRE DETAILS OF RECEIPT OF AMOUNT FROM EUREKA FORBES LTD FOR US AGE C HARGES OF ITS HALL PREMISES TOGETHER WITH TDS FIGURE T HEREON WERE ALREADY PART OF THE RETURNS FILED BY THE ASSESSEE AS STATED SUPRA. H ENCE THE RATIO LAID DOWN B Y THE HON BLE SUPREM E COURT IN THE C ASE OF PRICEWATERHOUSE COOPERS REPORTED IN 348 ITR 306 (SC) WOU LD SQUARELY APPLY TO THE FACTS O F THE INSTANT CASE. IN TH ESE CIR CUMSTANCES, IT COULD BE SA FELY CONCLUDED THAT THIS IS NOT A FIT CASE FOR LEVY OF P ENALTY U/S. 271(1) (C) OF THE ACT IN THE SUM OF RS.4 , 32 , 51 7/ - . ACCORDING LY, WE DIRECT THE LD. AO T O DELETE THE SAME. TH E GROUND S RAISED BY THE ASSESSEE ARE ALLOWED . ITA NO . 4762 /MUM/ 2019 M/S. KONKAN CO - OP HOUSING SOC IETY LTD., 5 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D . ORDER PRONOUNCE D ON 21 / 04 / 202 1 BY WAY OF PROPER M ENTIONING IN T HE NOTICE BOARD. SD/ - ( VIKAS AWASTHY ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 21 / 04 / 202 1 KARUNA , SR.PS COPY OF THE O RDER FORWARDED T O : BY ORDER, ( ASSTT. REGIST RAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI. 4. CIT 5. DR, ITA T, MUMBAI 6. GUARD FILE. //TRUE COPY//