TMI Blog2018 (4) TMI 1516X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 (2) TMI 3 - SUPREME COURT] and M/s. BANGALORE CLUB [2013 (1) TMI 343 - SUPREME COURT] The assessee in the paper book furnished in the returns of income but not furnished the actual amount of interest received by the assessee from the Karnataka Bank Limited. A.O also has not given any finding on the interest received by the assessee from the banks. Even though the interest received on mandatory deposits the same is taxable. The case should be remitted back to the file of the A.O. to examine the nature of receipts which are exempt on principle of mutuality basis and taxable receipts such as interest received from Karnataka Bank and any other receipts and determine the true and correct income as per law. Appeals filed by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,31,271/- 2007-08 - ₹ 3,25,759/- 2008-09 - ₹ 7,26,413/- 2009-10 - ₹ 5,97,509/- The A.O. reopened the assessments by issue of notices u/s 148 of the Act and the assessee submitted the reply stating that the returns of income filed on 4.11.2011 may be treated as a returns in response to notices issued u/s 148 of the Act on 22.11.2011. Assessment was completed u/s 143(3) r.w.s. 147 accepting the income returned. 3. The assessee filed appeal against the order passed u/s 143(3) r.w.s. 147 of the Act before the CIT(A) statin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was not realized by the assessee at the time of filing the return of income and argued that there is no concession under law to tax the income which cannot be taxed. The assessee also placed reliance on circular No.14 of 1955 dated 11.4.1955 where CBDT stated that the A.O. should not take the advantage of the ignorance of the assessee. The assessee also relied on the case of Srikant G. Shah Vs. ITO (Bombay Tribunal) 108 ITD 577 and Nirmala L. Mehta Vs. A. Balasubrahmaniam, CIT Ors (High Court of Bombay) 269 ITR 1. The Ld. A.R. further argued that article 265 of the Constitution of India declared that no tax can be collected except by authority of law. Further, Hon ble Supreme Court in the case law in (1965) 56 ITR 67 held that if a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wise and withdrawal by cheque, draft, order or otherwise for the purpose of lending or investment; and (iii) To borrow or raise money and to receive all types of short, medium and long term deposits and in particular thrift, recurring, fixed and other deposits from its members etc., as per the objectives of the society. 7. The AO has completed the assessment accepting the returned income and the assessee has not made any claim regarding the exemption of income on mutuality basis before the AO. However the assessee raised the issue before the CIT(A) but the Ld.CIT(A) dismissed the assessee s contention stating that the proceedings u/s 148 are aimed at income escaping the assessment. In this case the assessee has filed the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orily empowered to determine the revised income which can be lower than the returned income. 8. The Ld.AR relied on th CBDT circular No.14 of 1955 dated 11.4.1955 and stated that the A.O. should not take the advantage of the assessees s ignorance of law to his advantage. Ld.AR also taken the reference of Hon ble Supreme Court decision in the case of V. Mr. P. Firm, Muar* 56 ITR 67 (SC) and argued that that if a particular income is not taxable under the Income Tax Act, it cannot be taxed on the basis of estoppels or any other equitable doctrine. Though the facts of the case law relied on by the assessee is quite different and the issue is not related to voluntary filing of return of income, the observation in the case is still relevant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) and Totgars Co-operative Sale Society Ltd. V. ITO (2010) 322 ITR 283, the interest on deposits is not the business income but income from other sources and the society is not entitled to special deduction u/s 80P(2)(d) of the Act. In the instant case, the assessee has made deposits with the Karnataka Bank Limited, which is not member of the society and the same is not to be allowed as a deduction u/s 80P(2)(d) of the Act. Therefore, the entire interest income derived by the assessee from the Karnataka Bank Limited is taxable. This view is supported by the Hon ble Supreme Court judgement cited (supra) in 322 ITR 283 and the Bangalore Club 29 Taxmann.com 29. The assessee in the paper book furnished in the returns of income but not furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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