Sou.Venutai Chavan Smarak Public Charitable Trust, Karad V. ITO, Wd -I, Satara

ITA 108/PUN/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0869 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 19-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAUSHAL
• Keywords: Charitable institution
• Section: 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER & SHRI D KARUNAKARA RAO ACCOUNTANT MEMBER ITA 108/PN/10 (A.Y.2006-07) SOU.VENUTAI CHAVAN SMARAK APPELLANT PUBLIC CHARITABLE TRUST, KARAD, DIST SATARA. PAN AADTS7795K VS. ITO, WD I, SATARA RESPONDENT APPELLANT BY : SMT. DEEPA KHARE, C.A. RESPONDENT BY : SHRI R.KAUSHAL, CIT DR ORDER PER: D KARUNAKARA RAO AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT(A) -III, PUNE DATED 03.11.2009. THE GROUNDS RAISED BY THE A SSESSEE READ AS UNDER. 1. THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE AO IN DENYING THE EXEMPTION U/S.11 OF THE ACT ON THE GROUND OF NON FILING OF FORM NO.10 WITHIN THE PRESCRIBED TIME. 2. THE LEARNED CIT (A) ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE COMPLIANCE OF CONDITION OF FILING THE FORM NO.10 CAN BE MADE BEFORE THE COMPLETION OF THE ASSESSMENT PROCEEDINGS. IT IS SUB MITTED THAT THE APPELLANT HAVING FILED THE FORM NO.10 BEFORE THE COMPLETION O F ASSESSMENT PROCEEDINGS, THE CONDITION OF FILING THE SAME IS BEEN COMPLIED W ITH. 2. THE ASSESSEE IS A TRUST FILED THE RETURN OF INCO ME DECLARING TOTAL INCOME OF RS NIL. THE OBJECTS OF THE TRUST IS TO RUN THE RUN LIB RARIES, TO PROMOTE INSTITUTES ETC. DURING THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE FAILED TO FURNISH THE FORM NO 10 ALONG WITH THE RETURN AND TH E SAID NOTICE FOR ACCUMULATION OF INCOME IN FORM NO 10 WAS FILED ON ONLY 29.7.2008. D URING THE PROCEEDINGS BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE GR OUNDS AND STATED THAT THE ASSESSING OFFICER DENIED THE EXEMPTION U/S.11 ON TH E GROUND OF NON-FILING OF FORM NO.10 ALONG WITH RETURN OF INCOME. AS PER THE AO, T HE ASSESSEE DID NOT COMPLY WITH THE PROVISIONS OF THE RULE 17 OF THE INCOME-TAX RUL ES, 1962 AND THE FAILURE TO DO SO SHOULD RESULT IN DENIAL OF THE BENEFITS OF EXEMPTIO N U/S 11 OF THE ACT EVEN IF THE SAID FORM IS FILED DURING THE ASSESSMENT PROCEEDINGS. I N THIS REGARD, BEFORE US, LEARNED ITA 108/PN/10 (A.Y.2006-07) SOU.VENUTAI CHAVAN SMARAK PU BLIC CHARITABLE TRUST, 2 COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT SUCH FOR M NO.10 COULD BE FILED BEFORE THE END OF THE ASSESSMENT PROCEEDINGS IN VIEW OF TH E APEX COURT JUDGMENT IN THE CASE OF CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION, 2 47 ITR 201 (SC). 3. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE FOR THE REASONS MENTIONED IN PARA 12 OF THE IMPUGNED ORDER WHICH READS AS UNDER. 12. THE NEXT GROUND FOR REJECTION OF FORM NO.10 BY THE ASSESSING OFFICER IS THAT THE NOTICE FOR ACCUMULATION OF INCOME IN FORM NO.10 WAS FILED AFTER THE EXPIRY OF THE TIME ALLOWED UNDER SUB-SECTION (1) OF SECTION 139 IN VIOLATION OF RULE 17 OF THE I.T. RULES. ALTHOUGH, ON THE STRENG TH THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF NAGPUR HOTEL O WNERS ASSOCIATION, 247 ITR 201, THE APPELLANT HAS CONTENDED THAT THE FORM NO.10 CAN BE FILED ANY TIME BEFORE ASSESSMENT IS CONCLUDED , WHAT REMAINS TO BE SEEN IS WHETHER THE DELAY IN FILING FORM NO.10 IS CONDONED BY THE CIT OR NOT AS THIS IS THE BASIC REQUIREMENT AS PER RULE 17. SINCE IN THE PRESENT CASE NOTHING HAS BEEN BROUGHT ON RECORD BY THE APPELLANT TO SHOW THA T THE DELAY IN FILING FORM NO.10 HAS BEEN CONDONED BY THE CIT, THE BASIC CONDI TION AS ENVISAGED UNDER RULE 17 IS NOT FULFILLED AND AS SUCH THE ACTION OF THE ASSESSING OFFICER IN REJECTING FORM NO.10 ON THIS GROUND CALLS FOR NO IN TERFERENCE. ACCORDINGLY, GROUNDS NO.1 AND 2 FAIL. 4. AGGRIEVED WITH THE ABOVE DECISION OF THE CIT(A), ASSESSEE FILED THE PRESENT APPEAL BEFORE US. LD COUNSEL STRONGLY RELIED ON THE APPLICABILITY OF THE APEX COURTS JUDGMENT IN THE CASE OF THE NAGPUR HOTEL OWNERS ASS OCIATION, (SUPRA). ON THE OTHER HAND, LEARNED DR FOR THE REVENUE RELIED ON THE ORDE RS OF THE REVENUE. 5. WE HAVE PERUSED THE ORDERS OF THE REVENUE AS WEL L AS THE CITED APEX COURT JUDGMENT IN THE CASE OF CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION, (SUPRA). FOR THE SAKE OF COMPLIANCE HELD PORTION OF THE APEX COURT J UDGMENT READ AS FOLLOWS. IT IS ABUNDANTLY CLEAR FROM THE WORDING OF SUB-SEC TION (2) OF SECTION 11 OF THE INCOME-TAX ACT, 1961, THAT IT IS MANDATORY FOR THE PERSON CLAIMING THE BENEFIT OF SECTION 11 TO INTIMATE TO THE ASSESSING AUTHORIT Y THE PARTICULARS REQUIRED, UNDER RULE 17 IN FORM NO. 10 OF THE INCOME-TAX RULE S, 1962. IF DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DOES NOT HAVE THE NECESSARY INFORMATION, THE QUESTION OF EXCLUDING SUCH INCOME FROM ASSESSMENT DOES NOT ARISE AT ALL. AS A MATTER OF FACT, THIS BENEFIT OF EXCLUDING THIS PARTICULAR PART OF THE INCOME FROM THE NET OF TAXATION ARISES FROM SEC TION 11 AND IS SUBJECT TO THE CONDITIONS SPECIFIED THEREIN. THEREFORE, IT IS NECESSARY THAT THE ASSESSING AUTHORITY MUST HAVE THIS INFORMATION AT T HE TIME HE COMPLETES THE ASSESSMENT. IN THE ABSENCE OF ANY SUCH INFORMATION, IT WILL NOT BE POSSIBLE FOR THE ASSESSING AUTHORITY TO GIVE THE BENEFIT OF SUCH EXCLUSION. EVEN ASSUMING THAT THERE IS NO VALID LIM ITATION PRESCRIBED UNDER THE ACT AND THE RULES, IT IS REASONABLE TO PRESUME THAT THE INTIMATION ITA 108/PN/10 (A.Y.2006-07) SOU.VENUTAI CHAVAN SMARAK PU BLIC CHARITABLE TRUST, 3 REQUIRED UNDER SECTION 11 HAS TO BE FURNISHED BEFOR E THE ASSESSING AUTHORITY COMPLETES THE CONCERNED ASSESSMENT BECAUS E SUCH REQUIREMENT IS MANDATORY AND WITHOUT THE PARTICULAR S OF THIS INCOME THE ASSESSING AUTHORITY CANNOT ENTERTAIN THE CLAIM OF THE ASSESSEE UNDER SECTION 11 OF THE ACT, THEREFORE, COMPLIANCE WITH THE REQUIREMENT OF THE ACT WILL HAVE TO BE ANY TIME BEFORE THE ASSESSMENT PROCEEDINGS . FURTHER, ANY CLAIM FOR GIVING THE BENEFIT OF SECTION 11 ON THE BASIS OF INFORMATION SUPPLIED SUB SEQUENT TO THE COMPLETION OF ASSESSMENT WOULD MEAN THAT THE ASSESSMENT ORDER WILL HAVE TO BE REOPENED. THE ACT DOES NOT CONTEMPLATE SUCH REOPENI NG OF THE ASSESSMENT. 6. THE ABOVE RATIO ESTABLISHES A PRINCIPLE THAT THE FROM NO 10 MUST BE FURNISHED TO THE AO BEFORE THE END OF THE ASSESSMENT PROCEEDI NGS AS, WITHOUT THE PARTICULARS OF THIS INCOME, THE ASSESSING AUTHORITY CANNOT ENTE RTAIN THE CLAIM OF THE ASSESSEE UNDER SECTION 11 OF THE ACT. DENIAL OF THE BENEFITS OF SECTION 11 OF THE ACT MERELY ON THE TECHNICALITIES RELATING TO CONDONATION BY THE C IT IS NOT FAIR. CONSIDERING THE FACT ASSESSEE UNDISPUTEDLY FILED THE FORM NO.10 DURING T HE ASSESSMENT PROCEEDINGS, IN OUR OPINION, THE CASE OF THE ASSESSEE IS COVERED BY THE APEX COURT JUDGMENT IN THE CASE OF CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION, ( SUPRA). ACCORDINGLY, THE GROUNDS RAISE BY THE ASSESSEE ARE ALLOWED . 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JUNE, 2010. SD/- SD/- (SHAILENDRA KUMAR YADAV) (D. KARUN AKARA RAO) JUDICIAL MEMBER A CCOUNTANT MEMBER PUNE DATED THE 2 ND JUNE, 2010 ASHWINI COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-III, PUNE 4. CIT-III, PUNE 5. D.R. ITAT A BENCH 6. GUARD FILE BY ORDER ASSTT. REGISTRAR I.T.A.T PUNE