Prajasakti Sahitee Samsta, Hyderabad V. The A.D.I.T. (EXEMP)-I, Hyderabad

ITA 1511/HYD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7694 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 18-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reassessment proceedings
• Section: 143(3); 12A; 147; 148; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1511/HYD/2013 ASSESSMENT YEAR : 2007-08 PRAJASAKTI SAHITEE SAMSTA, HYDERABAD. PAN AAATP 3524A ASST. DIRECTOR OF INCOME-TAX (EXEMPTION)-I, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI A.V. RAGHURAM REVENUE BY SHRI RAMAKRISHNA BANDI DATE OF HEARING 28-10-2014 DATE OF PRONOUNCEMENT 12-11-2014 O R D E R PER SAKTIJIT DEY, J.M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER DATED 31/02/2013 OF THE CIT(A)-IV, HYDERABAD FOR TH E ASSESSMENT YEAR 2007-08. 2. ASSESSEE IN TOTAL HAS RAISED FOUR GROUNDS. GROUN D NOS. 1 & 4 BEING GENERAL IN NATURE ARE NOT REQUIRED TO BE ADJU DICATED. 3. GROUND NO. 2 IS IN RESPECT OF REJECTION OF FORM NO. 10, SUBMITTED IN COURSE OF REASSESSMENT PROCEEDING, BY THE AO AND WAS CONFIRMED BY CIT(A). 4. BRIEFLY THE FACTS RELATING TO THE AFORESAID ISSU E ARE, ASSESSEE IS A SOCIETY REGISTERED U/S 12A OF THE ACT. FOR THE AY UNDER DISPUTE, 2 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. ASSESSEE FILED ITS RETURN OF INCOME ORIGINALLY ON 3 1/10/07 DECLARING NIL INCOME AFTER CLAIMING EXEMPTION U/S 11 OF THE ACT. RETURN WAS INITIALLY PROCESSED U/S 143(1). HOWEVER, SUBSEQUENT LY, ASSESSEES RETURN WAS SUBJECTED TO SCRUTINY AND AFTER VERIFYIN G THE BOOKS OF ACCOUNT AND OTHER DETAILS, ASSESSMENT IN CASE OF AS SESSEE WAS COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 28 /08/08 ACCEPTING THE INCOME RETURNED. MUCH AFTER COMPLETION OF THE A SSESSMENT, AO ON EXAMINING THE RECORDS NOTICED THAT AS PER THE COMPU TATION OF INCOME FILED ALONG WITH RETURN OF INCOME, ASSESSEE HAD ACC UMULATED RS. 98,76,511 OVER AND ABOVE THE MANDATORY ACCUMULATION OF 15% OF THE GROSS RECEIPTS, WHICH WAS SET OFF AGAINST THE EXCES S UTILIZATION IN EARLIER YEARS. HOWEVER, AS ASSESSEE HAS NOT FILED F ORM NO. 10 AS PRESCRIBED U/S 11(2) FOR ACCUMULATION OR SET APART OF MORE THAN 15% OF THE RECEIPTS, AO WAS OF THE VIEW THAT THERE IS E SCAPEMENT/UNDER ASSESSMENT OF INCOME IN TERMS OF SECTION 147. ACCOR DINGLY, AFTER RECORDING REASONS TO THAT EFFECT, AO ISSUED A NOTIC E U/S 148 OF THE ACT ON 28/03/12. IN RESPONSE TO THE SAID NOTICE, ASSESS EE, THOUGH, INITIALLY REQUESTED AO TO TREAT THE RETURN ORIGINAL LY FILED TO BE A RETURN IN RESPONSE TO THE NOTICE U/S 148, BUT, SUBSEQUENTL Y ON 24/07/12, FILED A RETURN OF INCOME AND REQUESTED AO TO TREAT IT AS RETURN IN RESPONSE TO NOTICE U/S 148. ALONG WITH THE SAID RETURN OF IN COME, ASSESSEE ALSO FURNISHED A CERTIFICATE IN FORM NO. 10 IN COMPLIANC E TO THE PROVISIONS OF SECTION 11(2) OF THE ACT. AO, HOWEVER, REFUSED T O ACCEPT EITHER THE RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S 148 O R FORM NO. 10. THE REASONS FOR NOT ACCEPTING, AS MENTIONED BY AO IN T HE ASSESSMENT ORDER, ARE AS PER THE PROVISIONS OF SECTION 148, AS SESSEE HAS TO FILE THE RETURN OF INCOME WITHIN A PERIOD OF 30 DAYS FRO M THE SERVICE OF NOTICE U/S 148. AS THE RETURN OF INCOME FILED ON 24 /07/12 IS BEYOND THE PRESCRIBED PERIOD, THE SAID RETURN IS TO BE TRE ATED AS INVALID. SIMILARLY, AO HELD THAT AS PER THE STATUTORY PROVIS ION, ASSESSEE HAS TO INTIMATE AO THE EXCESS ACCUMULATION OVER AND ABOVE THE AMOUNT ALLOWED U/S 11(2) IN FORM NO. 10 BEFORE EXPIRY OF T IME ALLOWED U/S 139(1). THE PROVISION, DOES NOT PROVIDE FOR FILING OF FORM NO. 10 3 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. BEFORE COMPLETION OF ASSESSMENT. HE, FURTHER, NOTED THAT EVEN ASSESSEE HAS NOT FILED FORM NO. 10 BEFORE COMPLETIO N OF ORIGINAL ASSESSMENT U/S 143(3). HE OBSERVED THAT REOPENED AS SESSMENT U/S 147 CANNOT BE TREATED AS PENDING ASSESSMENT, HENCE, ASSESSEES CONTENTION THAT FORM NO. 10 WAS FILED BEFORE COMPLE TION OF ASSESSMENT CANNOT BE ACCEPTED. AO OBSERVED THAT AS HELD BY THE HONBLE SUPREME COURT IN CASE OF CIT VS. NAGPUR HOT EL OWNERS ASSOCIATION, NAGPUR VS. CIT [2001] 247 ITR 201 (SC) , IT IS MANDATORY FOR THE PERSON CLAIMING BENEFIT OF SECTION 11 TO IN TIMATE THE ASSESSING AUTHORITY, THE PARTICULARS REQUIRED UNDER RULE 17 I N FORM NO. 10 OF THE RULES. EVEN ASSUMING THAT THERE IS NO VALID LIMITAT ION PRESCRIBED UNDER THE RULES, THEN, ALSO IT IS REASONABLE TO PRE SUME THAT THE INTIMATION REQUIRED U/S 11 ABOUT ACCUMULATION HAS T O BE FURNISHED BEFORE THE ASSESSING AUTHORITY COMPLETES THE CONCER NED ASSESSMENT BECAUSE SUCH REQUIREMENT IS MANDATORY AND WITHOUT T HE PARTICULARS OF THIS INCOME, ASSESSING AUTHORITY CANNOT ENTERTAIN T HE CLAIM OF ASSESSEE U/S 11 OF THE ACT. ON THE AFORESAID BASIS, AO REJECTED FORM NO. 10 FILED BY ASSESSEE AND BROUGHT TO TAX AN AMOU NT OF RS. 98,76,511 BEING THE EXCESS INCOME ACCUMULATED OR SE T APART BY ASSESSEE. BEING AGGRIEVED OF THE ASSESSMENT ORDER, SO PASSED, ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A) . 5. IN COURSE OF HEARING OF APPEAL, IT WAS SUBMITTED ON BEHALF OF ASSESSEE, AS PER THE DECISION OF HONBLE SUPREME C OURT IN CASE OF CIT VS. NAGPUR HOTELS OWNERS ASSOCIATION, NAGPUR VS . CIT (SUPRA), INTIMATION IN FORM NO. 10 COULD BE FILED DURING ASS ESSMENT PROCEEDING, BUT, IF THE ASSESSMENT PROCEEDING IS CO MPLETED, ASSESSMENT CANNOT BE REOPENED FOR FACILITATING FILI NG OF FORM NO. 10 BY ASSESSEE. IT WAS SUBMITTED THAT, HOWEVER, IF THE ASSESSMENT IS ALREADY REOPENED THERE IS NO HINDRANCE IN FILING FO RM NO. 10 IN COURSE OF SUCH PROCEEDING. IT WAS CONTENDED THAT ONCE ASSE SSMENT IS REOPENED IT ALSO BECOMES PENDING ASSESSMENT AND IN COURSE OF SUCH ASSESSMENT PROCEEDING, ASSESSEE CAN FILE FORM NO. 1 0. IN SUPPORT OF 4 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. SUCH CONTENTION, ASSESSEE ALSO RELIED UPON CERTAIN JUDICIAL PRECEDENTS. LEARNED CIT(A) AFTER CONSIDERING THE SU BMISSIONS OF ASSESSEE, HELD THAT AS PER THE OBSERVATION OF THE H ONBLE SUPREME COURT IN CIT VS. NAGPUR HOTELS OWNERS ASSOCIATION, NAGPUR (SUPRA), ANY CLAIM FOR GIVING BENEFIT OF SECTION 11 ON THE B ASIS OF INFORMATION SUPPLIED SUBSEQUENT TO THE COMPLETION OF ASSESSMENT WOULD MEAN THAT ASSESSMENT WILL HAVE TO BE REOPENED. IN OTHER WORDS, REOPENING CANNOT BE A MEANS TO FACILITATE FILING OF INTIMATIO N. SHE OBSERVED THAT IF ASSESSEES CLAIM IS TO BE ACCEPTED, IT WOULD LEA D TO A SITUATION WHERE AN ASSESSEE IN WHOSE CASE NOTICE U/S 148 HAS NOT BEEN ISSUED WOULD HAVE NO OPPORTUNITY TO FILE FORM NO. 10 WHERE AS ANOTHER IN WHOSE CASE SUCH NOTICE HAS BEEN ISSUED WOULD BE ENT ITLED TO DO SO. THIS, ACCORDING TO, LEARNED CIT(A) WOULD BE DISCRET IONARY. LEARNED CIT(A) RELYING UPON A DECISION OF HONBLE SUPREME C OURT IN CASE OF CIT VS. SUN ENGINEERING WORKS, 198 ITR 297, HELD TH AT PROCEEDING U/S 147 IS FOR THE BENEFIT OF REVENUE AND NOT FOR T HE BENEFIT OF ASSESSEE. THEREFORE, ASSESSEE IN COURSE OF REASSESS MENT PROCEEDING, CANNOT MAKE GOOD THE DEFICIENCIES IN TE RMS OF ORIGINAL RETURN OF INCOME. ACCORDINGLY, LEARNED CIT(A) UPHEL D THE DECISION OF AO THAT ASSESSEE CANNOT FILE FORM NO. 10 IN COURSE OF REASSESSMENT PROCEEDING. 6. THE LEARNED AR SUBMITTED BEFORE US THAT AS PER S ECTION 2(8) ASSESSMENT INCLUDES REASSESSMENT. THEREFORE, ASSES SEE IS ENTITLED TO FILE FORM NO. 10 DURING REASSESSMENT PROCEEDING AND THE AO AS WELL AS LEARNED CIT(A) ARE NOT JUSTIFIED IN REJECTI NG FORM NO. 10 FILED BY ASSESSEE. IN SUPPORT OF SUCH CONTENTION, LEARNED AR STRONGLY RELIED UPON A DECISION OF HONBLE DELHI HIGH COURT IN CASE OF ASSOCIATION OF CORPORATION AND APEX SOCIETIES OF HA NDLOOMS VS. ADIT IN JUDGMENT DATED 10/01/13 IN ITTA NO. 523 TO 526 OF 2010, [2013] 84 CCH 14. LEARNED AR SUBMITTED THAT AS FAR AS THE OBSERVATION OF LEARNED CIT(A) THAT REOPENING OF ASS ESSMENT IS NOT FOR THE BENEFIT OF ASSESSEE BUT FOR THE BENEFIT OF DEPA RTMENT, THE SAME, 5 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. THOUGH, MAY BE CORRECT BUT AS ASSESSEE IS NOT MAKIN G ANY FRESH CLAIM BUT IS FURNISHING DOCUMENTS IN RESPECT OF A CLAIM A LREADY MADE IN THE RETURN OF INCOME AND ON WHICH ASSESSMENT IS REOPENE D, IT CANNOT BE CONSIDERED TO BE A BENEFIT FOR ASSESSEE. IN THIS CO NTEXT, LEARNED AR SUBMITTED THAT ASSESSEE IN THE ORIGINAL RETURN AS W ELL AS IN THE BOOKS OF ACCOUNT HAS CLAIMED THE BENEFIT OF SECTION 11(2 ) AND FURNISHING OF FORM NO. 10 IS ONLY IN THE NATURE OF RECTIFYING A P ROCEDURAL IRREGULARITY WHICH ASSESSEE NEVER HAD AN OCCASION TO REMOVE AS A SSESSEES CLAIM IN THE RETURN OF INCOME WAS EXAMINED AND ALLO WED BY AO IN THE ORIGINAL ASSESSMENT COMPLETED U/S 143(3). THUS, IT WAS SUBMITTED BY LEARNED AR THAT ASSESSEE HAVING FURNISHED THE REQUI RED INFORMATION IN FORM NO. 10 BEFORE COMPLETION OF ASSESSMENT U/S 143 (3) READ WITH SECTION 147, THE SAME OUGHT TO HAVE BEEN ACCEPTED B Y AO AND CIT(A). 7. THE LEARNED DR, ON THE OTHER HAND SUPPORTING THE FINDING OF THE LEARNED CIT(A) AND AO SUBMITTED THAT AS REOPENING O F ASSESSMENT IS FOR THE BENEFIT OF THE DEPARTMENT AND NOT FOR THE A SSESSEE, FORM NO. 10 FILED IN COURSE OF REASSESSMENT PROCEEDING CANNO T BE ACCEPTED. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD AS WELL AS ORDERS OF REVENU E AUTHORITIES ON THIS ISSUE. WE HAVE ALSO CAREFULLY APPLIED OUR MIN D TO THE DECISIONS CITED BY THE PARTIES. IT IS VERY MUCH CLEAR FROM TH E ASSESSMENT ORDER AS WELL AS THE ORDER OF LEARNED CIT(A) THE ONLY GRO UND ON WHICH FORM NO. 10 FILED BY ASSESSEE HAS BEEN REJECTED IS THAT THE SAME CANNOT BE FILED DURING REASSESSMENT PROCEEDING. WHILE COMI NG TO SUCH CONCLUSION, AO AS WELL AS LEARNED CIT(A) HAVE RELIE D UPON A DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. NAGPUR HOTELS OWNERS ASSOCIATION, NAGPUR (SUPRA). HOWEVER, ON GOING THRO UGH THE AFORESAID JUDGMENT OF THE HONBLE SUPREME COURT, IT BECOMES C LEAR THAT FACTS IN THE SAID CASE ARE TOTALLY DIFFERENT. IN CASE OF CIT VS. NAGPUR HOTELS OWNERS ASSOCIATION, NAGPUR (SUPRA), AFTER COMPLETIO N OF ASSESSMENT, 6 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. ASSESSEE SUBMITTED FORM NO. 10 BEFORE AO. THEREFORE , THE HONBLE SUPREME COURT HELD THAT IF DURING ASSESSMENT PROCEE DING, AO DOES NOT HAVE NECESSARY INFORMATION THE QUESTION OF EXCL UDING SUCH INCOME DOES NOT ARISE AT ALL. IN THE AFORESAID CONT EXT, THE HONBLE SUPREME COURT OBSERVED THAT FOR GIVING A BENEFIT TO ANY CLAIM MADE ON THE BASIS OF INFORMATION SUPPLIED SUBSEQUENT TO COMPLETION OF ASSESSMENT WOULD MEAN THAT THE ASSESSMENT ORDER WIL L HAVE TO BE REOPENED WHICH THE ACT DOES NOT CONTEMPLATE. 9. HOWEVER, THE FACTS IN THE PRESENT CASE ARE TOTAL LY DIFFERENT. AS CAN BE SEEN FROM THE REASONS RECORDED BY AO WHILE R EOPENING ASSESSMENT, ASSESSEE ITSELF IN THE RETURN OF INCOME HAS COMPUTED THE EXCESS INCOME ACCUMULATED/SET APART AND AO HAS ALLO WED EXEMPTION TO ASSESSEE WHILE COMPLETING THE ORIGINAL ASSESSMEN T AFTER EXAMINING THE SAME. THEREFORE, AS CAN BE SEEN FROM THE FACTS OF THE ASSESSEES CASE, EXEMPTION CLAIMED BY ASSESSEE, IN FACT, WAS A LLOWED BY AO AND IT WAS NEVER POINTED BY AO TO ASSESSEE THAT DUE TO NON FILING OF FORM NO. 10 ASSESSEES CLAIM OF EXEMPTION WILL NOT BE A CCEPTED. THEREFORE, WHEN THE ASSESSMENT WAS REOPENED FOR DIS ALLOWING ASSESSEES CLAIM OF EXEMPTION U/S 11 IN RESPECT OF EXCESS INCOME ACCUMULATED/SET APART FOR NON-FURNISHING OF FORM NO . 10, ASSESSEE BECAME AWARE OF IT AND FURNISHED FORM NO. 10 BEFORE AO IN COURSE OF REASSESSMENT PROCEEDING. AS CAN BE SEEN, IN THE PRE SENT CASE, ASSESSMENT WAS NOT REOPENED ON THE BASIS OF INFORMA TION SUBSEQUENTLY FILED BY ASSESSEE CLAIMING BENEFIT OF SECTION 11 AFTER COMPLETION OF ORIGINAL ASSESSMENT. CONSIDERED IN TH E AFORESAID CONTEXT, THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CASE OF CIT VS. NAGPUR HOTELS OWNERS ASSOCIATION, NAGPUR (S UPRA) WILL NOT APPLY TO THE FACTS OF THE PRESENT CASE. LEARNED CIT (A) HAS ALSO RELIED UPON A DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. SUN ENGINEERING WORKS (SUPRA) TO OBSERVE THAT REOPENIN G U/S 147 IS NOT FOR THE BENEFIT OF ASSESSEE, BUT, FOR THE BENEFIT O F REVENUE. THOUGH THE AFORESAID PROPOSITION OF LAW IS CORRECT BUT, IT NEEDS TO BE 7 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. EXAMINED WHETHER ASSESSEE IS REALLY CLAIMING A BENE FIT IN THE REASSESSMENT PROCEEDING. IN THIS CONTEXT, IT WILL B E PROFITABLE TO REFER TO THE OBSERVATIONS MADE BY THE HONBLE SUPREME COU RT IN CASE OF SUN ENGINEERING WORKS (SUPRA), WHICH IS EXTRACTED H EREUNDER FOR CONVENIENCE: AS A RESULT OF THE AFORESAID DISCUSSION, WE FIND TH AT, IN PROCEEDINGS UNDER S. 147 OF THE ACT, THE ITO MAY BR ING TO CHARGE ITEMS OF INCOME WHICH HAD ESCAPED ASSESSMENT OTHER THAN OR IN ADDITIONAL TO THAT ITEM OR TIMES WHICH HAVE LED TO THE ISSUANCE OF THE NOTICE UNDER S. 148 AND WHERE REASSESSMENT IS M ADE UNDER S. 147 IN RESPECT OF INCOME WHICH HAS ESCAPED TAX, THE ITO'S JURISDICTION IS CONFINED TO ONLY SUCH INCOME WHICH HAS ESCAPED TAX OR HAS BEEN UNDERASSESSED AND DOES NOT EXTEND TO RE VISING, REOPENING OR RECONSIDERING THE WHOLE ASSESSMENT OR PERMITTING THE ASSESSEE THE REAGITATE QUESTIONS WHICH HAD BEEN DEC IDED IN THE ORIGINAL ASSESSMENT PROCEEDINGS. IT IS ONLY THE UND ERASSESSMENT WHICH IS SET ASIDE AND NOT THE ENTIRE ASSESSMENT WH EN REASSESSMENT PROCEEDINGS ARE INITIATED. THE ITO CAN NOT MAKE AN ORDER OF REASSESSMENT INCONSISTENT WITH THE ORIGINA L ORDER OF ASSESSMENT IN RESPECT OF MATTERS WHICH ARE NOT THE SUBJECT MATTER OF PROCEEDINGS UNDER S. 147. AN ASSESSEE CANNOT RES IST VALIDLY INITIATED REASSESSMENT PROCEEDINGS UNDER THIS SECTI ON MERELY BY SHOWING THAT OTHER INCOME WHICH HAD BEEN ASSESSED O RIGINALLY WAS AT TOO HIGH A FIGURE EXCEPT IN CASES UNDER S. 152(2 ). THE WORDS 'SUCH INCOME' IN S. 147 CLEARLY REFER TO THE INCOME WHICH IS CHARGEABLE TO TAX BUT HAS 'ESCAPED ASSESSMENT' AND THE ITO'S JURISDICTION UNDER THE SECTION IS CONFINED ONLY TO SUCH INCOME WHICH HAS ESCAPED ASSESSMENT. IT DOES NOT EXTEND TO RECONSIDERING GENERALLY THE CONCLUDED EARLIER ASSES SMENT. CLAIMS WHICH HAVE BEEN DISALLOWED IN THE ORIGINAL ASSESSME NT PROCEEDING CANNOT BE PERMITTED TO BE REAGITATED ON THE ASSESSM ENT BEING REOPENED FOR BRINGING TO TAX CERTAIN INCOME WHICH H AD ESCAPED ASSESSMENT BECAUSE THE CONTROVERSY ON REASSESSMENT IS CONFINED TO MATTERS WHICH ARE RELEVANT ONLY IN RESPECT OF TH E INCOME WHICH HAD NOT BEEN BROUGHT TO TAX DURING THE COURSE OF TH E ORIGINAL ASSESSMENT. A MATTER NOT AGITATED IN THE CONCLUDED ORIGINAL ASSESSMENT PROCEEDINGS ALSO CANNOT BE PERMITTED TO BE AGITATED IN THE REASSESSMENT PROCEEDINGS UNLESS RELATABLE TO TH E TIMES SOUGHT TO BE TAXED AS 'ESCAPED INCOME'. INDEED, IN THE REA SSESSMENT PROCEEDINGS FOR BRINGING TO TAX ITEMS WHICH HAD ESC APED ASSESSMENT, IT WOULD BE OPEN TO AN ASSESSEE TO PUT FORWARD CLAIMS FOR DEDUCTION OF ANY EXPENDITURE IN RESPECT OF THAT INCOME OR THE NON-TAXABILITY OF THE ITEMS AT ALL. KEEPING IN VIEW THE OBJECT AND PURPOSE OF THE PROCEEDINGS UNDER S. 147 OF THE ACT WHICH ARE FOR THE BENEFIT OF THE REVENUE AND NOT AN ASSESSEE, AN ASSESSEE CANNOT BE PERMITTED TO CONVERT THE REASSESSMENT PRO CEEDINGS AS HIS APPEAL OR REVISION, IN DISGUISE, AND SEEK RELIE F IN RESPECT OF ITEMS EARLIER REJECTED OR CLAIM RELIEF IN RESPECT O F ITEMS NOT CLAIMED IN THE ORIGINAL ASSESSMENT PROCEEDINGS, UNL ESS RELATABLE TO 'ESCAPED INCOME', AND REAGITATE THE CONCLUDED MATTE RS. EVEN IN CASES WHERE THE CLAIMS OF THE ASSESSEE DURING THE C OURSE OF REASSESSMENT PROCEEDINGS RELATING ON THE ESCAPED AS SESSMENT ARE 8 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. ACCEPTED, STILL THE ALLOWANCE OF SUCH CLAIMS HAS TO BE LIMITED TO THE EXTENT TO WHICH THEY REDUCE THE INCOME TO THAT ORIGINALLY ASSESSED. THE INCOME FOR PURPOSES OF 'REASSESSMENT' CANNOT BE REDUCED BEYOND THE INCOME ORIGINALLY ASSESSED. 9.1 THE PROPOSITION OF LAW, WHICH EMERGES FROM THE AFORESAID JUDGMENT OF THE HONBLE SUPREME COURT ARE AS UNDER: ASSESSEE NEITHER CAN CLAIM RECOMPUTATION OF INCOME OR REDOING OF AN ASSESSMENT NOR HE COULD BE ALLOWED A CLAIM WHICH HE EITHER FILED TO MAKE OR IT WAS OTHERWISE R EJECTED AT THE TIME OF ORIGINAL ASSESSMENT. CLAIMS WHICH HAVE BEEN DISALLOWED IN THE ORIGINAL ASSESSMENT PROCEEDING CANNOT BE PERMITTED TO BE RE- AGITATED IN REOPENED ASSESSMENT. A MATTER NOT AGITATED IN THE CONCLUDED ORIGINAL ASSESSMENT PROCEEDING CANNOT BE PERMITTED TO BE AGITATED IN THE REASSESSMENT PROCEEDING UNLESS RELA TABLE TO THE ITEM SOUGHT TO BE TAXED AS ESCAPED INCOME. 9.2 IF THE FACTS OF THE PRESENT CASE ARE CONSIDERED IN THE LIGHT OF THE PROPOSITIONS LAID DOWN BY THE HONBLE SUPREME COURT AS AFORESAID, IT CAN BE SEEN THAT ASSESSEE HAS CLAIMED ACCUMULATION/ SETTING APART EXCESS INCOME IN THE RETURN OF INCOME FILED ORIGINA LLY AND AO ALSO ACCEPTED SUCH CLAIM OF ASSESSEE WHILE COMPLETING TH E ORIGINAL ASSESSMENT. AO NEVER RAISED THE ISSUE OF NON-FILING OF FORM NO. 10 NOR HE REJECTED ASSESSEES CLAIM OF EXEMPTION U/S 1 1 IN RESPECT OF ACCUMULATED INCOME. THEREFORE, THERE WAS NO OCCASIO N FOR ASSESSEE EARLIER TO FILE FORM NO. 10. THEREFORE, WHEN ASSESS MENT WAS REOPENED FOR ASSESSING ESCAPED INCOME ON ACCOUNT OF NON FURNISHING OF FORM NO. 10, IT CAN BE SAID THAT FURNISHING OF F ORM NO. 10 IS RELATABLE TO ESCAPED INCOME SOUGHT TO BE ASSESSED. HENCE, EVEN AS PER THE RATIO LAID DOWN BY THE HONBLE SUPREME COUR T IN CASE OF SUN ENGINEERING WORKS (SUPRA), ASSESSEE IS ELIGIBLE TO FURNISH FORM NO. 10 IN COURSE OF REASSESSMENT PROCEEDING. FURTHER, AS RIGHTLY 9 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. CONTENDED BY THE LEARNED AR, THIS IS NOT A FRESH CL AIM MADE BY ASSESSEE. ACCUMULATION/SETTING APART OF EXCESS INCO ME IS ALREADY DISCLOSED/SHOWN BY ASSESSEE IN THE RETURN OF INCOME ORIGINALLY FILED AND WAS ALSO EXAMINED AND ALLOWED BY AO WHILE COMPL ETING THE ASSESSMENT. THEREFORE, NEITHER IT IS A FRESH CLAIM MADE BY ASSESSEE WHICH WAS NOT BEFORE AO DURING THE ORIGINAL ASSESSM ENT NOR IT IS A CLAIM REJECTED BY AO DURING ORIGINAL ASSESSMENT, AN D REAGITATED BY ASSESSEE DURING THE ASSESSMENT PROCEEDING. IN THE AFORESAID VIEW OF THE MATTER, THE DECISION IN CASE OF SUN ENGINEERING WORKS CANNOT BE APPLIED TO REJECT FORM N. 10 FILED BY ASSESSEE. ON THE CONTRARY, THE CONTENTION OF LEARNED AR THAT ASSESSEE CAN FILE FOR M NO. 10 EVEN IN COURSE OF REASSESSMENT PROCEEDING IS SQUARELY COVER ED BY THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF AS SOCIATION OF CORPORATION AND APEX SOCIETIES OF HANDLOOMS VS. ADI T (SUPRA). AS CAN BE SEEN FROM THE FACTS OF THE AFORESAID CASE, F OR AYS 1998-99, 1999-00, AND 2000-01, ASSESSEE DID NOT FURNISH FORM NO. 10 ALONG WITH THE RETURN OF INCOME, BUT, WERE FURNISHED DURI NG PROCEEDING INITIATED U/S 147 OF THE ACT. AFTER ASSESSEES CLAI M OF FURNISHING OF FORM NO. 10 DURING REASSESSMENT PROCEEDING WAS REJE CTED BY AO AS WELL APPELLATE FORUMS, WHEN THE MATTER WAS AGITATED BEFORE THE HONBLE DELHI HIGH COURT, THE HONBLE DELHI HIGH CO URT AFTER EXAMINING THE RATIO LAID DOWN BY THE HONBLE SUPREM E COURT IN CASE OF CIT VS. NAGPUR HOTELS OWNERS ASSOCIATION, NAGPUR (SUPRA) AS WELL AS THE RELEVANT STATUTORY PROVISIONS, HELD AS UNDER : ON GOING THROUGH THE ABOVE EXTRACT WE FIND THAT THE SUPREME COURT OBSERVED THAT IT WAS NECESSARY THAT THE ASSES SING AUTHORITY MUST HAVE THE INFORMATION UNDER FORM-10 A T THE TIME HE COMPLETES THE ASSESSMENT AND IN ITS ABSENCE IT I S NOT POSSIBLE FOR THE ASSESSING AUTHORITY TO GIVE BENEFI T OF SUCH EXCLUSION. FURTHERMORE, ONCE THE ASSESSMENT IS SO C OMPLETED IT WOULD BE FUTILE TO FIND FAULT WITH THE ASSESSING AU THORITY FOR HAVING INCLUDED SUCH INCOME IN THE ASSESSABLE INCOM E OF THE ASSESSEE. THE SUPREME COURT HELD CATEGORICALLY THAT WITHOUT THE PARTICULARS OF THIS INCOME AS GIVEN IN FORM-10, THE ASSESSING AUTHORITY CANNOT ENTERTAIN THE CLAIM OF T HE ASSESSEE U/S 11 OF THE ACT AND, THEREFORE, COMPLIANCE WITH T HE REQUIREMENT OF THE ACT WILL HAVE TO BE AT ANY TIME BEFORE THE 10 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. ASSESSMENT PROCEEDINGS ARE COMPLETED. THE SUPREME C OURT ALSO OBSERVED THAT ANY CLAIM FOR GIVING THE BENEFIT OF SECTION 11 ON THE BASIS OF INFORMATION SUPPLIED SUBSEQUENT TO THE COMPLETION OF ASSESSMENT WOULD MEAN THAT THE ASSESS MENT ORDER WILL HAVE TO BE REOPENED. THE SUPREME COURT N OTICED THAT THE ACT DID NOT CONTEMPLATE SUCH REOPENING OF THE A SSESSMENT. THE LEARNED COUNSEL FOR THE REVENUE RELIED ON THIS PORTION O THE FINDING OF THE SUPREME COURT TO CONTEND THAT DURING REASSESSMENT PROCEEDINGS, THE SAID FORM-10 COULD NO T BE FURNISHED BY AN ASSESSEE. HOWEVER, WE HAVE TO KEEP IN MIND THE FACT THAT WHILE REOPENING OF AN ASSESSMENT CANN OT BE ASKED FOR BY THE ASSESSEE ON THE GROUND THAT HE HAD NOT F URNISHED THE FORM-10 DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, THIS DOES NOT MEAN THAT WHEN THE REVENUE REOPENS THE ASSESSME NT BY INVOKING SECTION 147 OF THE SAID ACT, THE ASSESSEE WOULD BE REMEDILESS AND WOULD BE BARRED FROM FURNISHING FORM -10 DURING THOSE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IN SO F AR AS THE SECOND QUESTION IS CONCERNED AND WITH REGARD TO THE APPEAL NOS. 524/2012, 525/2012 AND 526/2012, THE SAME HAS TO BE ANSWERED IN FAVOUR OF THE ASSESSEE/APPELLANT AND AG AINST THE REVENUE. HOWEVER, WITH REGARD TO THE ITA NO. 523/20 12 BECAUSE THE FORM-10 WAS FILED ONLY BEFORE THE TRIBU NAL, THE QUESTION HAS TO BE DECIDED, IN THAT APPEAL, AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. 9.3 AS THE RATIO LAID DOWN BY THE HONBLE DELHI HIG H COURT IN THE AFORESAID DECISION IS SQUARELY APPLICABLE TO THE FA CTS OF THE PRESENT CASE, RESPECTFULLY FOLLOWING THE SAME, WE DIRECT TH E AO TO ACCEPT FORM NO. 10 FILED BY ASSESSEE AND ALLOW THE BENEFIT IN TERMS OF SECTION 11(2) READ WITH RULE 17. THIS GROUND IS ALL OWED. 10. IN GROUND NO. 3, ASSESSEE HAS RAISED ALTERNATIV E CONTENTION THAT AS ASSESSEE HAS UTILIZED MORE THAN 85% OF INCOME IN EARLIER YEARS, THE EXCESS OF INCOME OVER EXPENDITURE IN THE IMPUGN ED ASSESSMENT YEAR IS TO BE SET OFF AGAINST SUCH EXPENDITURE INCU RRED IN EXCESS OF 85% LIMIT. HOWEVER, IN VIEW OF OUR DECISION IN GROU ND NO. 2, THIS GROUND IS OF MERE ACADEMIC INTEREST, HENCE, NOT REQ UIRED TO BE ADJUDICATED. 11 ITA NO. 1511/HYD/2013 PRAJASAKTI SAHITEE SAMSTA, HYD. 11. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALL OWED. PRONOUNCED IN THE OPEN COURT ON 12 TH NOVEMBER, 2014. SD/- SD/- (P.M. JAGTAP) (S AKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 12 TH NOVEMBER, 2014 KV COPY TO:- 1) PRAJASAKTI SAHITEE SAMSTA, C/O A.V. RAGHURAM, AD VOCATE, 610, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYD-1 2) ADIT (EXEMPTION)-I, HYDERABAD 3) CIT(A)-IV, HYDERABAD 4) DIT(E), HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD.