C C I CHAMBERS CO OPERATIVE HOUSING SOCIETY LTD Vs. ITO
INCOME TAX APPELLATE TRIBUNAL
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N.V. Vasudevan, J.M. -
(1.) THESE are appeals by the assessee against 4 orders all dated 26-7-2007 of learned Commissioner (Appeals)-XII, Mumbai relating to assessment year 2001-02 to 2004-05.
(2.) In all these appeals, first issue that arises for consideration is with regard to the validity of initiation of reassessment proceedings under Section 147 of the Act.
The assessee is a co-operative housing society. Non-occupancy charges are collected from the members of the society, who are owners of the apartments, which are let out and not occupied by the owners themselves. The Government of Maharashtra in exercise of powers under the Maharashtra Co-operative Societies Act vide notification dated 1-8-2001 directed all the co-operative societies to recover non-occupancy charges at 10 per cent of the service charges. Notification further lays down that no society shall charge more than 10 per cent of the service charges as non-occupancy charges and that the bye laws of the society should be amended to levy non-occupancy charges in accordance with the aforesaid notification. Notification further lays down that the limit would come into force from the date of issue of the notification i.e. 1-8-2001.
(3.) THE assessee has been collecting non-occupancy charges from its members, which was admittedly more than 10 per cent of the service charges. In the light of the notification referred to above, the assessing officer reopened the assessments for assessment years 2001-02 to 2004-05. Reasons recorded for reopening, which are identical in all the cases are as follows:
Reasons for reopening the case under Section 147
During the year under consideration the assessee society has received non-occupancy charge of Rs. 8,80,000 from its members at three times the normal maintenance charges Government of Maharashtra vide its notification No. SYG-1094 15165/P No. 317/14-C dated 1-8-2001 has restricted to some extent to collect the said non-occupancy charges. THE notification provides that the society should not collect the non-occupancy charges at a rate exceeding 10 per cent of the service charges/maintenance charges (excluding municipal taxes/Nagarpalika tax). It is apparent from the above facts and circumstances of the case that the assessee co-operative society has violated the limitation fixed by the Government of Maharashtra, so the principal of mutuality ceased to operate, in such circumstances and profit motive prevails.
In view of the above facts and circumstances of the case, I have reason to believe that income chargeable to tax on account of non-occupancy charges has escaped for assessment year 2001-02 and accordingly assessment proceedings under Section 147 of the Income Tax Act is initiated.
Permission may kindly be granted to issue notice under Section 148. Put up for approval.;
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