ACIT (Exemption), New Delhi V. Jamnalal Bajaj Foundation, New Delhi

ITA 1246/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3432 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 07-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M A GOHEL
• Keywords: Assessment record
• Section: 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: F , NEW DELHI BEFORE SHRI R S SYAL, VICE PRESIDENT AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 1246/DEL/2016 A.Y. 2011 - 12 ACIT (EXEMPTION) CIRCLE 1(1), E 2 BLOCK PRATYAKSH KAR BHAWAN DR .SHYAMA PARSAD MUKHERJEE CIVIC CENTRE NEW DELHI 110 002 VS . JAMNALAL BAJAJ FOUNDATION B 60 - 61, NARAINA INDUSTRIAL AREA, PHASE II NEW DELHI 110 028 PAN: AAATJ0402B (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ATIQ AHMA D, SR.D.R. RESPONDENT BY SH. M.A. GOHEL, C.A. DATE OF HEARING 15 TH NOVEMBER, 2017 DATE OF PRONOUNCEMENT 22 ND NOVEMBER, 2017 ORDER PER BEENA PILLAI, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 40, NEW DELHI DATED 09.12.2015 PERTAINING TO THE ASSESSMENT YEAR (A.Y.) 2 011 - 12 ON THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN IGNORING THE PROVISIONS OF EXPLANATION 2(B) OF ITA 1246/DEL/2016 ASSESSMENT YEAR 2010 - 11 JAMNALAL BAJAJ FOUNDATION PAGE 2 OF 8 SECTION 11(1) JUST BECAUSE THE AUTHORITY UNDER RULE 17 WITH REGARD TO PRESCRIBING LIMITATION FOR EXERCISING OPTION U/S 11(2) HAS NOT BEEN HELD TO BE VALID B Y THE HIGH COURT FOR THE REASON THAT THE LIMIT IN THE MATTER OF GIVING NOTICE WAS NOT WITHIN THE DELEGATED AUTHORITY UNDER RULE 17 OF IT RULES, 1962. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEAR ING. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE FILED ITS RETURN OF INCOME ALONG WITH AUDITED REPORT ON 22/03/12. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143 (2) WAS ISSUED. IN RESPONSE TO VARIOUS NOTICES , AUTHORISED REP RESENTATIVE OF ASSESSEE ATTENDED ASSESSMENT PROCEEDINGS FROM TIME TO TIME. INFORMATION CALLED FOR WERE PLACED ON RECORD. 2.1. LD. AO OBSERVED THAT ASSESSEE IS A TRUST REGISTERED UNDER SECTION 12 A (A) OF THE INCOME TAX ACT, 1961 (THE ACT) V IDE ORDER DAT ED 22 /05/ 76. ON PERUSAL OF STATEMENT OF INCOME , LD. AO OBSERVED THAT ASSESSEE HA D AVAILED OPTION OF ACCUMULATION OF RS.6,50,00,000/ - , BEING EXCESS INCOME OVER EXPENDITURE , UNDER THE PROVISIONS OF, SECTION 11 (1) EXPLANATION 2 OF INCOME TAX ACT, 1961 . ASSES SEE FILED RESPONSE ON 24/03/14 TO THE QUERY RAISED BY LD. AO. HE ALSO PLACED RELIANCE UPON VARIOUS DECISIONS OF HON BLE SUPREME COURT, JURISDICTIONAL HIGH COURT AND BOMBAY HIGH COURT, TO SUBSTANTIATE ITS CLAIM . ITA 1246/DEL/2016 ASSESSMENT YEAR 2010 - 11 JAMNALAL BAJAJ FOUNDATION PAGE 3 OF 8 CIT VS . NAGPUR HOTEL OWNERS ASSOCIATION , RE PORTED IN 247 ITR 201 (SC); ASSOCIATION OF CORPORATION AND APEX SOCIETIES OF HANDLOOMS VS . ADIT , REPORTED IN (2013) 351 ITR 287; T RUSTEES OF TULSIDAS GOPALJI CHARITABLE AND CHALESHWAR TEMPLE T R UST VS . CIT REPORTED IN 207 ITR 368. 2.2. IT WAS CONTENDED BY A SSESSEE THAT ALL THE RELEVANT INFORMATION REGARDING THE EXERCISE OF OPTION UNDER EXPLANATION 2 TO SECTION 11 (1) OF THE A CT WAS FILED ALONG WITH THE RETURN OF INCOME. ASSESSEE SUBMITTED THAT AS IT RECEIVED DONATION AGGREGATING TO RS.17,15,32,000/ - IN THE LAST WEEK OF MARCH 2012, IT HAD TO EXERCISE THE OPTION UNDER SECTION 11 (1), EXPLANATION 2. ASSESSEE ALSO SUBMITTED THAT THE DECISIONS RELIED UPON BY HIM SUPPORTED THE ARGUMENTS ADVANCED BY ASSESSEE. 2.3. LD. AO HOWEVER DISALLOWED THE CLAIM OF ASSESSEE. 3. AGGRIEVED BY THE ASSESSMENT ORDER , ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) , WHO ALLOWED THE CLAIM BY REL YING UPON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION (SUPRA). LD. CIT (A) HELD AS UNDER: 4.5. I HAVE CONSIDERED THE FACTS OF THE CASE, THE OBSERVATIONS AND REASONING OF THE AO AND THE SUBMISSIONS MADE BY THE APPELLANT AS WELL AS THE RELEVANT CASE LAWS. IT IS NOTED THAT THE PROVISIONS OF SECTION 11 (1), EXPLANATION RELATING TO EXERCISE OF OPTION FOR ITA 1246/DEL/2016 ASSESSMENT YEAR 2010 - 11 JAMNALAL BAJAJ FOUNDATION PAGE 4 OF 8 ACCUMULATION AND SECTION 11 (2) OF THE ACT RELATING TO ACCUMULATION FOR SPECIFIC PURPOSE/PROJECT ARE IDENTICAL TO THE PROVISIONS OF EXPLANATION 2, SECTION 11 (1 RELATING TO EXERCISE OF OPTION FOR ACCUMULATION. HON BLE SUPREME COURT IN ITS LANDMARK JUDGMEN T IN THE CASE OF CIT VERSUS NAGPUR HOTEL OWNERS ASSOCIATION (SUPRA) HAS HELD THAT THE TIME LIMIT PRESCRIBED UNDER SECTION 11 (2) OF THE ACT IS ONLY DECLARATORY AND IF THE REQUISITE FORM NUMBER TEN IS FURNISHED ANY TIME BEFORE THE COMPLETION OF THE ASSESSME NT, THE SAME WILL MEET WITH THE REQUIREMENTS OF THE LAW AND THE ASSESSEE WILL BE ENTITLED TO ACCUMULATION UNDER SECTION 11 (2) OF THE ACT. IN MY VIEW, AS HAS BEEN HELD BY VARIOUS HIGH COURTS, THIS RULE OF LAW LAID DOWN BY THE HON BLE SUPREME COURT WILL ALS O APPLY IN RESPECT OF IDENTICAL PROVISIONS OF SECTION 11 (1), EXPLANATION ALSO. 3.1. LD. CIT (A) ALSO DEALT WITH THE ISSUE REGARDING WHETHER THE RETURNS FILED BY ASSESSEE COULD BE CONSIDERED AS A RETURN REQUIRED TO BE FURNISHED UNDER SUBSECTION (1) OF SEC TION 139 OF THE A CT. HE HELD THAT THOUGH THE RETURN WAS FILED BEYOND THE TIME SPECIFIED IN SUBSECTION (1) OF SECTION 139 BUT WAS WITHIN THE T IME PRESCRIBED UNDER SUBSECTION (4) OF SECTION 139. IT WAS HELD BY LD.CIT(A) THAT UNDER SUCH CIRCUMSTANCES. I T H AS TO BE CONSIDERED TO BE A RETURN FILED WITHIN THE TIME ALLOWED UNDER SUBSECTION (1) OF SECTION 139 OF THE ACT. 4. AGGRIEVED BY THE ORDER OF LD. CIT (A) THE REVENUE IS IN APPEAL BEFORE US NOW. ITA 1246/DEL/2016 ASSESSMENT YEAR 2010 - 11 JAMNALAL BAJAJ FOUNDATION PAGE 5 OF 8 5. LD. DR PLACED RELIANCE UPON THE ASSESSMENT ORDER. 6. LD. A R SUBMITTED THAT THE REQUIREMENT AS PER F ORM 10 WAS PRODUCED BY ASSESSEE AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143 (3) OF THE A CT. HE SUBMITTED THAT ASSESSEE HAS NOT VIOLATED ANY CONDITIONS PRESCRIBED UNDER R ULE 17 OF THE A CT AND P LACED HEAVY RELIANCE UPON THE REASONING ADOPTED BY HON BLE SUPREME COURT IN THE CASE OF NAGPUR H O TEL O WNERS ASSOCIATION (SUPRA). 6.1. LD. AR SUBMITTED THAT THE CONJOINT READING OF SECTION 11 AND SECTION 139 OF THE A CT MAKES IT CLEAR THAT A CHARITABLE OR R ELIGIOUS TRUST WHOSE INCOME IS EXEMPT UNDER SECTION 11 OR 12, IS REQUIRED TO SUBMIT A RETURN OF INCOME BY VIRTUE OF SUBSECTION (4A) OF SECTION 139 OF THE ACT . IT WAS SUBMITTED THAT SUBSECTION (1) OF SECTION 39 PROVIDES THE TIME WITHIN WHICH RETURN IS REQ UIRED TO BE SUBMITTED VOLUNTARILY. SUBSECTION (4) OF SECTION 139 HOWEVER PERMITS AN ASSESSEE WHO HAS FAILED TO FURNISH A RETURN WITHIN THE TIME ALLOWED BY SUBSECTION (1), TO FILE THE SAME AT ANY TIME BEFORE THE ASSESSMENT IS COMPLETED . 6.2. LD. AR SUBMITTE D THAT IN THE PRESENT FACTS OF THE CASE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 22/03/12 AND THEREAFTER A NOTICE UNDER SECTION 143 (2) WAS ISSUED ON 11/09/12. HE THUS SUBMITTED ITA 1246/DEL/2016 ASSESSMENT YEAR 2010 - 11 JAMNALAL BAJAJ FOUNDATION PAGE 6 OF 8 THAT THE ASSESSEE DID NOT VIOLATE ANY OF THE PROVISIONS OF SECTION 139 , AS THE RETURN HAS BEEN FILED UNDER SUBSECTION (4) IS HELD TO BE A RETURN FILED WITHIN THE TIME ALLOWED UNDER SUBSECTION (1) OF SECTION 139 IN THE INSTANT CASE. 6.3. THE LD. AR SUBMITTED THAT UNDER SUCH CIRCUMSTANCES OPTION EXERCISED BY ASSESSEE UNDER E XP LANATION TO SECTION 11 (1) OF THE A CT ALONG WITH BELATED RETURN FILED UNDER SUBSECTION (4) OF SECTION 139 WILL HAVE TO BE HELD TO HAVE BEEN EXERCISED BEFORE THE EXPIRY OF THE TIME ALLOWED UNDER SUBSECTION (1) OR SUBSECTION (2) OF SECTION 139 AS CONTEMPL ATED BY E XPLANATION TO SECTION 11 (1) OF THE A CT. 7. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE DECISIONS RELIED UPON BY LD. AR . 8. ON GOING THROUGH THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF NAGPUR H OTEL O WNER S ASSOCIATION (SUPRA), IT IS NECESSARY THAT THE ASSESSING AUTHORITY MUST HAVE INFORMATION UNDER F ORM 10 AT THE TIME HE COMPLETES THE ASSESSMENT AS IN ITS ABSENCE IT IS NOT POSSIBLE FOR THE ASSESSING OFFICER TO GIVE BENEFIT OF SUCH EXCLUSION. THEREFORE, R EQUIREMENT OF THE A CT AS PER RULE 17 WILL HAVE TO BE FULFILLED AT ANY TIME BEFORE THE ASSESSMENT PROCEEDINGS ARE COMPLETED. 9. IN THE FACTS OF THE PRESENT CASE AND AS OBSERVED FROM THE ASSESSMENT RECORDS, ASSESSEE HAD FURNISHED THE DETAILS UNDER F ORM 1 0 BEFORE THE ASSESSMENT PROCEEDINGS HAD BEEN INITIATED. THEREFORE ITA 1246/DEL/2016 ASSESSMENT YEAR 2010 - 11 JAMNALAL BAJAJ FOUNDATION PAGE 7 OF 8 THE ASSESSING OFFICER HAD THE BENEFIT OF VERIFYING CLAIM OF EXEMPTION DURING THE PENDENCY OF ASSESSMENT. 9 .1. O N A CAREFUL READING OF SECTION 139 OF THE A CT, WE ARE OF THE OPINION THAT SUBSE CTION (1) AND (4) OF SECTION 139 HAVE TO BE READ TOGETHER AND , ON SUCH A READING, IT IS VERY CLEAR THAT RETURN IS FILED WITHIN THE SPECIFIED PERIOD UNDER SUBSECTION ( 4 ) HAS TO BE CONSIDERED AS HAVING BEEN MADE WITHIN THE TIME PRESCRIBED IN SUBSECTION (1) OR SUBSECTION (2) OF SECTION 139 OF THE A CT. IN OTHER WORDS IF A RETURN IS FILED WITHIN THE TIME SPECIFIED UNDER SUBSECTION (4) OF 139 OF THE A CT AND THE ACTION CONTEMPLATED BY E XPLANATION TO SECTION 11 (1) OF THE ACT EXERCISED IN WRITING ALONG WITH SUCH A RETURN FILED UNDER SUBSECTION (4) OF SECTION 139, THE REQUIREMENTS OF E XPLANATION TO SECTION 11 (1) WOULD STAND SATISFIED. 9 .2. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY WITH THE FINDINGS OF LD. CIT (A) AND THE SAME IS UP HELD. ACCORDINGLY THE GROUNDS RAIS ED BY THE REVENUE STAND DISMISSED. 10 . IN THE RESULT APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND NOVEMBER, 2017. SD/ - SD/ - (R.S. SYA L) (BEENA A PILLAI) VICE PRESIDENT JUDICIAL MEMBER DATED: 22 ND NOVEMBER, 2017. ITA 1246/DEL/2016 ASSESSMENT YEAR 2010 - 11 JAMNALAL BAJAJ FOUNDATION PAGE 8 OF 8 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. C IT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT, DELHI BENCHES, NEW DELHI