CANCARE TRUST, MUMBAI V. THE COMM OF INCOME TAX (APPEAL) NFAC, MUMBAI

ITA 1155/MUM/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9883 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-10-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 17-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VALLABH GOKHALE
• Keywords: Charitable institution; Benefit of exemption; Set aside
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI B. R. BASKARAN, AM AND SHRI ABY T. VARKEY, JM आयकर अपील सं/ I.T.A. No.1155/Mum/2022 (निर्धारण वर्ा / Assessment Years: 2015-16) Cancare Trust A-508, Byculla Service Industries Premises CHS, Dadaji Konddev Road Byculla (E), Mumbai- 400027. बिधम/ Vs. The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Mumbai. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AAATM4606L (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) सुनवाई की तारीख / Date of Hearing: 03/10/2022 घोषणा की तारीख /Date of Pronouncement: 21/10/2022 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee trust against the order of the Ld. Commissioner of Income Tax (Appeals), (NFAC), Delhi dated 23.03.2022 for the assessment year 2015-16. 2. The grounds of appeal raised by the assessee are as under: - “1. The learned CIT(A) erred in including the total income of the appellant accumulation u/s 11(2) of the Act amounting to Rs.1,20,13,966/- without taking cognizance of the Form 10 filed by the appellant on 29 th Sep, 2015 with the office of the learned AO. 2. The learned CIT(A) erred in treating ground no. 1 of CIT(A) with respect to accumulation u/s 11(2) of the Act as withdrawn.” Assessee by: Mr. Vallabh Gokhale/Ms. Mrunmayee Kajrekar Revenue by: Mr. P. D. Chougule (Sr. AR) ITA No.1155/Mum/2022 A.Y. 2015-16 Cancare Trust 2 3. Brief facts is that the assessee is a charitable trust registered u/s 12A of the Income Tax Act, 1961 (hereinafter “the Act”) with effect from 18 th May, 1998, with the main object inter-alia of giving financial aid to needy patients for the diagnosis and treatment of cancer and allied diseases. In pursuance to its objects, the assessee is setting up a State of the Art Cancer Hospital (head and neck). In the relevant assessment year (AY), the assessee trust had filed its return of income for the AY. 2015-16 on 30 th Sep,2015 claiming exemption u/s 11 of the Act. (i.e. benefit of exemption u/s 11(2) of the Act in the ITR, for accumulation of surplus fund of Rs.1,20,13,966/-). For doing so, the trustees of the appellant trust have duly passed the resolution for accumulation of surplus funds out of donations received during the previous year relevant to AY. 2015-16. For claiming the accumulation of surplus fund, the assessee trust had filed an application for accumulation of funds u/s 11(2) of the Act in the manner as prescribed in Rule 17 of the Income Tax Rules, 1962 (hereinafter “the Rules”) in the Form-10, which was filed on 29 th Sep, 2015 with the office of the AO, providing for an accumulation of Rs.1,20,13,966/- along with the aforesaid resolution. 4. Even though as per CBDT notification dated 14 th Jan, 2016, the statement in Form no. 10 for exercise of option u/s 11(2) of the Act need to be furnished electronically with effect from 1 st April, 2016, the assessee filed not only physical copy of Form 10 claiming accumulation of amount of Rs.1,20,13,966/-, it also filed electronically ITA No.1155/Mum/2022 A.Y. 2015-16 Cancare Trust 3 the same (which was not necessary). But unfortunately in the uploaded/electronic form-10 the assessee made an inadvertent mistake and showed the amount as Rs.16,41,639/-, instead of Rs.1,20,13,966/. And this amount of Rs.16,41,639/- was adopted by the AO which according to him represented the deemed accumulation of 15% within the meaning assigned u/s 11(1)(b) pertaining to AY 2015-16. According to Ld. AR, the AO has not considered the Form 10 physically filed by the assessee on 29 th Sep, 2015 with the office of the AO for accumulation u/s 11(2) of the Act amounting to Rs.1,20,13,966/- being the actual amount of accumulation (as per the resolution of Trustees). It was brought to our notice that after taking notice of the inadvertent mistake the assessee trust had also filed revised form-10 electronically on 23.01.2018 (for AY. 2015-16) wherein it has rectified the amount of accumulation u/s 11(2) to Rs.1,20,13,966/-. Further, it was brought to our notice the fact that the assessee trust had also thereafter filed Form-10 electronically for the subsequent assessment years i.e, AY 2016-17 and AY 2017-18 taking into consideration the accumulation amount relevant for AY 2015-16 as Rs.1,20,13,966/- on 07.09.2016 and 20.09.2017 respectively i.e. prior to completion of this impugned action. Based on that, the accumulation of Rs.1,20,13,966/- for AY 2015-16 was considered by AO while completing the assessment proceedings for subsequent years (i.e, for AY. 2016-17 & AY. 2017-18). However, during the first appellate proceedings even though the assessee pleaded that the amount of accumulation u/s 11 of the Act should be considered at ITA No.1155/Mum/2022 A.Y. 2015-16 Cancare Trust 4 Rs.1,20,13,966/- instead of Rs.16,41,639/- as done by the AO, he has not considered this ground of appeal raised by the assessee [i.e. in respect of ground no. 1 raised before him. Re: Accumulation u/s 11(2) of the Act amounting to Rs.1,20,13,966/- without taking cognizance of the Form 10 filed by the appellant on 29 th Sep, 2015 with the office of the AO]. We further note that the CBDT notification dated 14.01.2016 which directed furnishing electronically Form no. 10 in exercise of claim u/s 11(2) of the Act came into effect from 1 st April, 2016 (AY. 2016-17). However, the assessee in this case has inadvertently filed electronically Form no. 10 dated 13.09.2015 (refer page no. 19 of the PB) wherein the assessee has shown the accumulated amount to be Rs.16,41,639/- whereas a perusal of Form no. 10 which was physically submitted before AO on 29.09.2015 (refer page no. 17 and 18 of the PB) shows that the assessee has shown the amount of accumulation to the tune of Rs.1,20,13,966/-. However, we note that the AO has ignored the physically filed Form no. 10 and has only taken cognizance of electronically filed Form 10 and thus discarded the physical form which was filed before him. In such a scenario, we deem it fit to set aside the impugned order of the Ld. CIT(A) and restore the matter back to the file of the AO and direct the AO to take into consideration the Form no. 10 physically submitted as on 29.09.2015 (AY. 2015-16) and take a fresh decision in respect of the accumulation of income as per the section 11(2) of the Act in accordance to law. ITA No.1155/Mum/2022 A.Y. 2015-16 Cancare Trust 5 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 21/10/2022. Sd/- Sd/ (B. R. BASKARAN) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 21/10/2022. Vijay Pal Singh, (Sr. PS) आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधयक िंजीकधर /(Dy./Asstt. Registrar) आयकर अिीलीय अनर्करण, मुंबई / ITAT, Mumbai