ACIT CIR 3, MUMBAI v. SWATANTRYAVEER SAVARKAR SEVA SAMITI, MUMBAI

ITA 4181/MUM/2009 | 2005-2006
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 418119914 RSA 2009
Assessee PAN AADTS9797F
Bench Mumbai
Appeal Number ITA 4181/MUM/2009
Duration Of Justice 2 year(s) 15 day(s)
Appellant ACIT CIR 3, MUMBAI
Respondent SWATANTRYAVEER SAVARKAR SEVA SAMITI, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 22-07-2011
Date Of Final Hearing 12-07-2011
Next Hearing Date 12-07-2011
Assessment Year 2005-2006
Appeal Filed On 07-07-2009
Judgment Text
1 ITA NO. 4180 & 4181/MUM/2009 (ASST YEARS 2005-06) IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH MUMBAI BENCHES MUMBAI BEFORE SHRI PRAMOD KUMAR AM & SHRI VIJAY PAL RAO JM ITA NO. 4180 & 4181/MUM/2009 (ASST YEARS 2005-06) THE ASST COMMR OF INCOME TAX CIR 3 MUMBAI VS SWATANTRYAVEER SAVARKAR SEVA SAMITI 7 KAMAL NIWAS 394 N C KELKAR MARG DADAR (W) MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AADTS9797F ASSESSEE BY SHRI M S MATHURIA REVENUE BY SHRI G P TRIVEDI PER VIJAY PAL RAO JM THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS DATED 13.3.2009 ONE IS ARISING OUT OF THE ASSESSMEN T ORDER PASSED U/S 144 AND THE OTHER ONE IS ARISING FROM THE PENALTY ORDER PASSED U/S 271(1) ( C) OF THE ACT FOR THE AY 2005-06. 2 IN THE QUANTUM APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD CIT(A) THANE ERRED IN DELETING THE AMOUNT OF RS47 17 069/- REPRESENTING CASH DEPOSIT IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO F URNISH ANY EXPLANATION ON THE SOURCE OF THE CASH DEPOSITS. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) THANE ERRED IN VERIFYING THE BOOKS OF ACCOUNT ON ITS OWN CONTRAVENING THE PROVISIONS OF RULE 46A OF T I RULES 1962. THE L D CIT(A)THANE OUGHT TO HAVE FORWARDED THE EVIDENCES SUBMITTED BEFORE IT TO THE ASS ESSING OFFICER FOR VERIFICATION WHICH IT HAS FAILED TO DO SO AND ASSED THE ORDER SUMMARILY IN APPEAL. 2 ITA NO. 4180 & 4181/MUM/2009 (ASST YEARS 2005-06) 3 THE ASSESSEE IS A REGISTERED CHARITABLE INSTITUTE AND HOLDING CERTIFICATE REGISTRATION UNDER THE SOCIETY REGISTRATION ACT AS WELL AS UNDER BOMBAY PUBLIC TRUST ACT SINCE 1983 AND 1984 RESPECTIVELY. THE ASSESSEE HAS BEEN GRANTED REGITRATION U/S 80G(5) R.W.S 12 OF THE I T ACT SINCE 1994. THE ASS ESSEE IS RUNNING A MILITARY TRAINING SCHOOL IN THE NAME OF MAHARASHTRA MILITARY SCHOOL A T TALAVALI (BARAGAON) TALUKA MURBAD DIST THANE. THE INCOME OF THE ASSESSEE IS E XEMPT U/S 10(23C) (V) BEING CHARITABLE EDUCATIONAL INSTITUTION. 3.1 WHILE SCRUTINISING THE ANNUAL INFORMATION RETUR N (AIR) FURNISHED U/S 285 BA OF THE I T ACT THE ITO (HQ) CIB PUNE NOTICED THAT TH E ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS. 47 17 069/- IN ITS SAVING BANK AC COUNT DURING THE FINANCIAL YEAR 2004-05. ON THE BASIS OF THE SAID INFORMATION RECEI VED NOTICE U/S 142(1) WAS ISSUED TO THE ASSESSEE. THE ITO STATED IN THE ASSESSMENT O RDER THAT NO RESPONSE TO THE NOTICE WAS FURNISHED BY THE ASSESSEE AND THEREFORE THE ASSESSEE HAS NO EXPLANATION TO OFFER REGARDING THE SOURCE OF DEPOSIT IN THE SAM E BANK ACCOUNT. ACCORDINGLY THE TOTAL CASH DEPOSITED AMOUNTING TO RS. 47 17 069/- W AS TREATED AS UNEXPLAINED INVESTMENT AND ASSESSED THE SAME TO TAX WHILE PAS SING THE ASSESSMENT ORDER U/ 144 OF THE I T ACT. 3.2 THE ASSESSEE CHALLENGED THE ACTION OF THE ASSES SING OFFICER BY RAISING THE OBJECTION OF THE VALIDITY OF THE ASSESSMENT ORDER P ASSED WITHOUT JURISDICTION WITHOUT PROPER SERVICE OF NOTICE AND IN WRONG STATUS OF T HE ASSESSEE. THE ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE ITO HQ (CIB) DID NOT GIVE A PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ORD ER HAS BEEN PASSED MECHANICALLY WITHOUT EXAMINATION AND INVESTIGATION OF THE FACTS AND RECORDS. IT 3 ITA NO. 4180 & 4181/MUM/2009 (ASST YEARS 2005-06) WAS POINTED OUT THAT THE ASSESSEE IS REGULARLY ASSE SSED TO TAX UNDER THE PROVISIONS OF I T ACT AND MAINTAINING REGULAR BOOKS OF ACCOUNT W HICH ARE BEING DULY AUDITED. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASS ESSMENT YEAR UNDER CONSIDERATION ON 29.12.2005 WITH THE JURISDICTIONAL ACIT(EXEMPTIO N) CIR I (2) MUMBAI WITH AUDIT REPORT IN FORM 10B. THE ASSESSEE WAS EVEN NOT AWARE ABOUT THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER AND ON RECEIPT OF THE PENALTY ORDER PASSED U/S 271(1)(C). THE ASSESSEE FILED AN APPLICATION UNDER RTI ACT AND CONSEQUENTLY THE ASSESSEE WAS SUPPLIED A CERTIFIED TRUE COPY OF THE IMPUGNED ASSESSMENT ORDER DT 27.12.2007 PASSED U/S 144 OF THE ACT BY THE ITO HQ (CIB) PUNE. 4 ON MERITS THE ASSESSEE HAS SUBMITTED BEFORE THE CIT(A) THAT CASH DEPOSITED IN THE BANK ACCOUNT REPRESENTS FEES RECEIVED FROM T HE STUDENTS AS THE ASSESSEE IS RUNNING MILITARY SCHOOL. ALL THE RECEIPTS ARE DULY ACCOUNTED IN THE REGULAR BOOKS AND THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE DULY AUDIT ED. THE AUDITED INCOME AND EXPENDITURE ACCOUNT AND BALANCE SHEET WITH AUDIT RE PORT IN FORM 10B WERE FILED WITH THE JURISDICTIONAL AO ALONG WITH RETURN OF INC OME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. ALL THESE RECORDS HAVE BEEN FILED BY THE ASSESSEE BEFORE THE CIT(A) ALONG WITH THE DETAILS OF STATEMENT OF FEES RECEIVE D BY CASH FROM THE STUDENTS WITH THEIR NAMES AND AMOUNT DEPOSITED IN THE SAVING BANK ACCOUNT. 4.1 AFTER CONSIDERING AND VERIFYING ALL THE RECORDS BOOKS OF ACCOUNT BANK ACCOUNT AND FACTS THE CIT(A) HELD THAT THE CASH DE POSITED BY THE ASSESSEE IN ITS BANK ACCOUNT AND THE NAMES OF THE STUDENTS FULLY EX AMINED AND ACCORDINGLY THE ADDITION MADE BY THE ITO HQ CIB PUNE WAS DELETED VIDE THE IMPUGNED ORDER. 4 ITA NO. 4180 & 4181/MUM/2009 (ASST YEARS 2005-06) 5 BEFORE US THE LD DR HAS MAINLY CONTENDED THAT TH E CIT(A) WHILE PASSING THE IMPUGNED ORDER HAS CONSIDERED THE BOOKS OF ACCOUNT AND OTHER RECORDS WITHOUT FORWARDING THE SAME TO THE ASSESSING OFFICER FOR V ERIFICATION. ACCORDINGLY THE CIT(A) HAS VIOLATED THE PROVISIONS OF RULE 46A WHILE CONSI DERING THE ADDITIONAL EVIDENCE WITHOUT GIVING OPPORTUNITY TO THE ASSESSING OFFICER . THE LD DR FORCEFULLY CONTENDED THAT THE RECORDS FILED BY THE ASSESSEE BEFORE THE C IT(A) OUGHT TO HAVE BEEN FORWARDED TO THE ASSESSING OFFICER FOR COMMENTS V ERIFICATION OR ANY COUNTER EVIDENCE BY THE ASSESSING OFFICER . THUS THE LD D R URGED THAT THE MATTER REQUITES VERIFICATION AND EXAMINATION AT THE LEVEL OF THE AS SESSING OFFICER AND MAY BE SET ASIDE TO THE RECORD OF THE ASSESSING OFFICER . 5.1 ON THE OTHER HAND THE LD AR OF THE ASSESSEE HAS REITERATED THE CONTENTIONS AS RAISED BEFORE THE CIT(A) AND SUBMITTED THAT WHEN TH E ASSESSEE WAS NOT GIVEN ANY OPPORTUNITY BY THE ASSESSING OFFICER BEFORE PASSIN G THE IMPUGNED ORDER AND ALL THE RELEVANT MATERIAL AND RECORDS WERE ALREADY AVAILABL E WITH THE ASSESSING OFFICER HAVING REGULAR JURISDICTION OVER THE ASSESSEE THE N CONSIDERING SUCH RECORDS BY THE CIT(A) WOULD NOT AMOUNT TO VIOLATION OF PROVISIONS OF RULE 46A OF THE I T RULES. 6 WE HAVE CONSIDERED THE RIVAL CONTENTION AND PERUS ED THE RELEVANT MATERIAL ON RECORDS. THIS IS A CASE OF EDUCATIONAL SOCIETY R UNNING MILITARY SCHOOL. THE ASSESSEE HAS BEEN REGULARLY FILING RETURN OF INCOME ALONG WI TH AUDITED BOOKS OF ACCOUNT. SINCE THE ASSESSEE IS EXEMPTED U/S 10(23C)(V) BEING CHARITABLE EDUCATIONAL INSTITUTION NO TAX WAS REQUIRED TO BE PAID. IT IS NOT IN DISPUTE BEFORE US THAT THE 5 ITA NO. 4180 & 4181/MUM/2009 (ASST YEARS 2005-06) ASSESSEE HAS BEEN RECEIVING CASH AMOUNT BEING FEES FROM THE STUDENTS AND DEPOSITING THE SAME IN THE SAVING BANK ACCOUNT. THI S PRACTICE OF RECEIVING FEES IN CASH AND DEPOSITING THE SAME IN THE BANK ACCOUNT IS NOT A NEW PRACTICE FOR THE YEAR UNDER CONSIDERATION BUT THIS PRACTICE AND FACT EXISTS DURING OTHER EARLIER YEARS ALSO. IT IS ALSO NOT IN DISPUTE BEFORE US THAT THE TRANSACTION OF CASH RECEIPT BEING FEES RECEIVED FROM THE STUDENTS HAS BEEN DULY RECORDED I N THE REGULAR BOOKS OF ACCOUNT AND AVAILABLE WITH THE JURISDICTIONAL ASSESSING OFF ICER. ONCE THE FEES RECEIVED BY WAY CASH FROM THE STUDENTS IS THE REGULAR PRACTICE IN THE CASE OF SCHOOL AND HAS BEEN REGULARLY ACCEPTED BY THE JURISDICTIONAL ASSES SING OFFICERTHEN TREATING THE SAME AS UNEXPLAINED INVESTMENT BY THE ITO HQ CIB O N THE BASIS OF ANNUAL INFORMATION RETURN WITHOUT VERIFYING THE FACTS EITH ER FROM THE JURISDICTIONAL ASSESSING OFFICER OR FROM THE ASSESSEE IS NOT JUSTIFIED AND HIGHLY IMPROPER. THOUGH THE ITO HQ CIB HAS BEEN GRANTED SPECIAL JURISDICTIONAL; HOWEVE R ANY INFORMATION RECEIVED REGARDING THE ASSESSEE WHO HAS BEEN REGULARLY ASSE SSED TO TAX THE MATTER OR INFORMATION OUGHT TO HAVE BEEN SENT TO THE AO HAVIN G JURISDICTION OVER THE ASSESSEE. THE ITO HQ CIB PUNE HAD MADE NO EFFORTS TO FIND OU T EVEN THE STATUS OF THE ASSESSEE FROM THE JURISDICTIONAL ASSESSING OFFICER. WHEN TH E PAN AND OTHER INFORMATION ARE READILY AVAILABLE IN THE CENTRAL INFORMATION CENTRE ; THEN INSTEAD OF MAKING THE ASSESSMENT IN THE ABSENCE OF THE ASSESSEE THE ITO HQ CIB WAS SUPPOSED TO MAKE MINIMUM ESSENTIAL ENQUIRY AND VERIFICATION FROM THE JURISDICTIONAL ASSESSING OFFICER AT LEAST. THE CIT(A) CONSIDERED FROM THE RECORD WHICH WAS ALREADY FILED BY THE ASSESSEE BEFORE THE JURISDICTIONAL ASSESSING OFFICE R AND FOUND THAT THE CASH DEPOSITED IN THE SAVING BANK ACCOUNT REPRESENTS SCH OOL FEES RECEIVED FROM THE STUDENTS AND THE SAID DEPOSIT HAVE BEEN EXPLAINED B Y THE ASSESSEE. THE RELEVANT PORTION OF THE CIT(A) IS REPRODUCED AS UNDER; 6 ITA NO. 4180 & 4181/MUM/2009 (ASST YEARS 2005-06) THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT OR DER WITHOUT PROVIDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. THE ASSESSING OFFICERS ORDER THEREFORE SUFFERS FROM THE FACTUAL MISTAKES. IN FACT THE APPELLANT IS A REGULAR ASSESSEE OF THE INCOME TAX DEPARTMENT. THE RETU RN OF INCOME FOR A?Y 05-06 HAS BEEN FILED ON 29.12.2005 U/S 139(1) OF TH E I T ACT 1961 WITH THE ACIT (EXEMPTION) CENTRAL 1(2) MUMBAI. THE CASH DEPOSITS IN THE APPELLANTS SAVINGS BANK ACCOUNT REPRESENTED CASH FEES RECEIVED FROM THE STUDENTS. THE APPELLANT AHS ENTERED ALL THE CASH FEES RECEIVED FRO M THE STUDENTS IN ITS REGULAR BOOKS OF ACCOUNTS. THE REGULAR BOOKS OF ACCOU NT HAVE BEEN AUDITED AS PER THE PROVISIONS OF THE I T AC T 161.ON VERIFYI NG THE FULL FACTS I FIND THAT THE CASH DEPOSITS MADE BY THE APPELLANT IN IS SAVIN G BANK ACCOUNT STANDS FULLY EXPLAINED. IN VIEW OF THESE FACTS THE ADDITI ON OF RS. 47 17 069 MADE TO THE TOTAL INCOME OF THE APPELLANT IS HEREBY DELETED. 6.1 THE CIT(A) HAS EXAMINED ONLY THOSE FACTS AND RE CORDS WHICH WERE ALREADY AVAILABLE WITH THE ASSESSING OFFICER HAVING JURISD ICTION OVER THE ASSESSEE AND FILED ALONG WITH THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION THUS IT WOULD NOT AMOUNT TO VIOLATION OF RULE 46 OF THE IT RULES. EVEN OTHERWISE WHEN IT HAS NOT BEEN DISPUTED BY THE REVENUE ABOUT THE SOURCE A ND NATURE OF THE DEPOSIT IN THE BANK ACCOUNT THEN WE DO NOT FIND ANY REASON TO SE T ASIDE THE MATTER TO THE RECORD OF THE ASSESSING OFFICER FOR ANY VERIFICATION.. 7 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE DO NOT SEE ANY ERROR OR ILLEGALITY IN THE ORDER OF THE CIT(A); ACCORDINGLY THE SAME IS UPHELD. THE REVENUE APPEAL IS DEVOID OF ANY MERIT. ITA NO.4180/MUM/2009 8 REVENUE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) THANE ERRED IN DELETING THE PENALTY OF RS/15 58 590/ - LEVIED U/S 271(1) C) OF 7 ITA NO. 4180 & 4181/MUM/2009 (ASST YEARS 2005-06) THE I T ACT 1961 BY RELYING ITS ENTIRE DECISION ON THE QUANTUM APPEAL DECIDED BY IT IN THE APPELLATE ORDER NO. APPAL NO.THN /CIT(A)-I/ACIT CIR 3/KYN/221/08-09 DATED 13.3.09 IGNORING THE FACTS AND CIRCUMSTANCES/EVIDENCES BROUGHT OUT BY THE AO IN HIS ASSESSMENT ORDER. 9 SINCE THE QUANTUM FOR WHICH THE PENALTY HAS BEEN LEVIED U/S 271(1)( C) HAS ALREADY BEEN DELETED BY THE CIT(A) AND UPHELD BY US IN THE QUANTUM APPEAL OF THE REVENUE THEN THE APPEAL AGAINST DELETION OF P ENALTY BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. 10 IN THE RESULT THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THE 22 ND DAY OF JULY 2011. SD/- SD/- ( PRAMOD KUMAR ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED:22 ND JULY 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI