The ITO, Ward-2(3), Baroda V. M/s. G.C. Shah Foundation, Baroda

ITA 1579/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6264 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 07-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 19-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANTONY PARIATH
• Section: 143(3); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NO. 1579/AHD/2014 (ASSESSMENT YEAR: 2010-11) THE INCOME-TAX OFFICER, WARD-2(3), 2 ND FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA APPELLANT VS. M/S. G. C. SHAH FOUNDATION 205, YASH KAMAL BUILDING, SAYAJIGUNJ, BARODA - 390005 RESPONDENT PAN: AAAAG0501B /BY REVENUE : SHRI ANTONY PARIATH, SR. D.R. /BY ASSESSEE : SHRI SUNIL TALATI, SR. D.R. /DATE OF HEARING : 17.01.2018 /DATE OF PRONOUNCEMENT : 23.01.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2010-11 A RISES AGAINST THE CIT(A)-II, BARODAS ORDER DATED 02.01.2014 IN CASE NO. CAB/II-177/12-13, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961 ; IN SHORT THE ACT. ITA NO. 1579/AHD/14 [ITO VS. M/S. G. C. SHAH FOUNDA TION] A.Y. 2010-11 - 2 - 2. THE REVENUE PLEADS FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: 1(I). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) ERRED IN ALLOWING THE EXEMPTION CLAIME D U/S 11 OF THE ACT, DESPITE CLEAR VIOLATION OF THE PROVISIONS OF THE SEC. 11(2) OF THE ACT, IN SO FAR AS EACH ACCUMULATION REQUIRES TO BE INFORMED TO THE ASSESSI NG OFFICER TO SATISFY THE CONDITION LAID DOWN IN SECTION 11(2)(A) AND 11(2)(B ) OF THE ACT. 1(II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) ERRED IN NOT APPRECIATING THAT THE PRO VISIONS OF SECTION 11(2) OF THE ACT CANNOT BE PROPERLY IMPLEMENTED, IF ONE FORM NO. 10 IN THE INITIAL YEAR IS CONSIDERED SUFFICIENT FOR ALL FUTURE ACCUMULATIO N, SINCE, AS PER THE PROVISIONS OF SECTION 11(2)(B) OF THE ACT, EACH ACCUMULATION H AS TO BE IN SPECIFIED INSTRUMENTS AS PER SECTION 11(5) OF THE ACT, WHICH CANNOT BE ASCERTAINED IN ABSENCE OF FORM NO. 10 FILED FOR EACH ACCUMULATION. 1(III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) FAILED TO APPRECIATE THAT PROVISIONS O F ACCUMULATION UP TO 10 YEARS AS PER SECTION 11(2)(A) OF THE ACT CANNOT BE MADE EFFECTIVE, IF FRESH FORM NO. 10 IS NOT FILED FOR EACH ACCUMULATIONS. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 3. IT EMERGES FROM THE REVENUES PLEADINGS HEREINAB OVE THAT ITS SOLE SUBSTANTIVE GROUND RAISES THE ISSUE OF FORM NO. 10 TO BE SUBMITTED BY THE ASSESSEE FOR THE PURPOSE OF CLAIMING ACCUMULATION O F INCOME U/S. 11(2) OF THE ACT. WE FIND THAT THE CIT(A)S ORDER UNDER CHALLEN GE DISCUSSES THE ENTIRE BACKDROP OF FACTS AT LENGTH AS FOLLOWS: 3.3.1. I HAVE CONSIDERED THE SUBMISSIONS OF THE L EARNED AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFIC ER. IN THIS CASE, THE ASSESSEE TRUST HAD MADE ACCUMULATION IN THE BUILDING & AUDIT ORIUM FUND IN THE F.Y.2007-08 FOR WHICH A THE FUND WAS CREATED AMOUNT ING RS.50,00,000/-. OUT OF THIS, RS.16,50,000/-WERE TRANSFERRED IN F.Y. 2007-0 8 AND RS.22,50,000/- WERE TRANSFERRED IN THE CURRENT F.Y. 2009-10 TO BUILDING & AUDITORIUM FUND. THE SAME FIGURES ARE REFLECTED IN FINANCIAL RECORDS OF BOTH THE YEARS. THE FUND WAS CREATED FOR A TIME PERIOD OF 5 YEARS ENDING ON 31.0 3.2013 FOR WHICH A RESOLUTION OF THE TRUSTEES AND A COPY OF FORM NO. 1 0 WAS SUBMITTED BEFORE THE ASSESSING OFFICER (A COPY OF WHICH ALSO FILED BEFOR E ME). THUS, THE ASSESSEE TRUST SUBMITTED FORM NO. 10 IN THAT VERY YEAR WHEN THE FUND WAS CREATED AND IN FACT IN THAT FORM, THE NOTICE WAS GIVEN IN RESPECT OF 5 PREVIOUS YEARS ENDING ON 31.03.08 AND THE INCOME WAS SOUGHT TO BE ACCUMULATE D FOR THE PERIOD ENDING ITA NO. 1579/AHD/14 [ITO VS. M/S. G. C. SHAH FOUNDA TION] A.Y. 2010-11 - 3 - 31.03.13. FURTHER, IT HAS BEEN MENTIONED IN FORM NO . 10 THAT SUCH AN ACCUMULATION IS DONE NOT ONLY FOR THAT CURRENT YEAR BUT FOR NEXT 5 YEARS. 3.3.2. ITAT MUMBAI, IN THE CASE OF COTTON TEXTILES EXPORT PROMOTION COUNCIL VS ITO(E) [2009] 117 ITD 90 (MUM.) HELD THA T AS PER SECTION 11 OF THE INCOME-TAX ACT, ASSESSEE CAN GIVE NOTICE IN WRI TING IN FORM NO. 10 FOR MORE THAN ONE YEAR IN ORDER TO CLAIM ACCUMULATION O F INCOME UNDER SECTION 11(2), AND CLAIM OF ASSESSEE CANNOT BE DENIED MEREL Y ON GROUND THAT IN SUBSEQUENT YEAR OR YEARS NO FURTHER NOTICE IS GIVEN BY ASSESSEE. IN PRESENT CASE, ASSESSING OFFICER'S CONTENTION THAT FORM NO. 10 IS TO BE FILED EVERY YEAR IS ERRONEOUS AS ACCORDING TO SECTION 11(2), IN ORDER T O CLAIM EXEMPTION UNDER SECTION 11(1), A NOTICE IN WRITING IS TO BE GIVEN T O THE ASSESSING OFFICER IN THE YEAR IN WHICH THE ACCUMULATIONS WERE MADE. THE ASSE SSEE TRUST HAS COMPLIED WITH THE PROVISIONS OF THE SECTION BY FILING FORM N O. 10 IN THE YEAR ENDED 31.03.2008. IN FILING FORM NO. 10 FOR THE-FIRST YEA R IN WHICH ACCUMULATIONS ARE MADE AND SPECIFYING THAT ACCUMULATIONS ARE MADE FOR NEXT 5 YEARS, IT CONSTITUTES SUFFICIENT COMPLIANCE WITH THE RELEVANT PROCEDURE PRESCRIBED AND THUS THERE DOES NOT ARISE NEED TO FILE FORM NO. 10 IN EACH AND EVERY YEAR. THE NOTICE ONCE GIVEN NEED NOT BE GIVEN EVERY YEAR DURI NG THE PERIOD OF ACCUMULATION. THIS CANNOT IN ANYWAY ALLOW THE A.O. TO CONCLUDE THAT THE ASSESSEE TRUST HAS 'NOT FILED' FORM NO. 10 IN A.Y. 2010-11 AS THE ASSESSEE HAS ALREADY FILE FORM NO. 10 BEFORE. THE ADDITION MADE BY THE ASSESSING OFFICER REJECTING ASSESSEE'S CONTENTION IS NOT JUSTIFIED AN D THE ADDITION SO MADE IS DIRECTED TO BE DELETED. 4. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY C ONTENDS THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN ACCE PTING ASSESSEES CASE QUA ITS IMPUGNED ACCUMULATION OF INCOME BY WAY OF ITS S INGLE FORM NO.10 IN RESPECT OF THE ACCUMULATION IN QUESTION. HIS CASE IS THAT THE ASSESSING OFFICER HAD RIGHTLY HELD THAT THE ABOVE FORM NO.10 IS TO BE SUBMITTED FOR ALL THE NEXT FIVE YEARS. WE FIND NO SUBSTANCE IN THE I NSTANT ARGUMENT AS THE ABOVE CO-ORDINATE BENCH IN COTTON TEXTILES EXPORT P ROMOTION COUNCIL (SUPRA) HAS ALREADY DECIDED THE VERY ISSUE AGAINST THE REVENUE IN HOLDING THAT NO SUCH DISALLOWANCE/ADDITION(S) IS TO BE MADE MERE LY ON THE GROUND THAT THE ASSESSEE DOES NOT GIVE SUCH AN INTIMATION IN EVERY SUBSEQUENT YEARS. IT HAS COME ON RECORD THAT THE ASSESSEE HAD ALREADY FILED ITS FORM NO.10 FOR THE YEAR ENDING ON 31.03.2008 SPECIFICALLY PINPOINTING ABOUT ITS ACCUMULATIONS TO BE MADE IN NEXT FIVE YEARS. WE THEREFORE FIND NO REAS ON TO INTERFERE WITH THE LD. ITA NO. 1579/AHD/14 [ITO VS. M/S. G. C. SHAH FOUNDA TION] A.Y. 2010-11 - 4 - CIT(A)S ORDER UNDER CHALLENGE IN TUNE WITH THE ABO VE CO-ORDINATE BENCHS DECISION. THE REVENUES SOLE SUBSTANTIVE GRIEVANCE IS THEREFORE DECLINED. 5. THIS REVENUES APPEAL IS ACCORDINGLY DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF JANUARY, 2018.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 23/01/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0