The DCITGNR Circle,, Gandhinagar V. Gujarat State Board of School Text Books, Gandhinagar

ITA 2282/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5683 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 08-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Revised return
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 2282/AHD/2014 (ASSESSMENT YEAR: 2011-12) DY. COMMISSIONER OF INCOME-TAX, GANDHINAGAR CIRCLE, GANDHINAGAR V/S GUJARAT STATE BOARD OF SCHOOL TEXT BOOKS VIDYAYAN, SECTOR-10A, GANDHINAGAR, 382028 (APPELLANT) (RESPONDENT) PAN: AAATG4671P APPELLANT BY : SHRI K. MADHUSUDAN, SR. D .R. RESPONDENT BY : SHRI M. K. PATEL, A.R. ( )/ ORDER DATE OF HEARING : 25 -07-201 7 DATE OF PRONOUNCEMENT : 27-07-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A), GANDHINAGAR, AHMEDABAD DATED 23.05.2014 PERTAINING TO A.Y. 2011-12. ITA NO. 2282 /AHD/2014 . A.Y. 2011-1 2 2 2. THE FIRST GRIEVANCE OF THE REVENUE RELATES TO THE D ELETION OF THE DISALLOWANCE MADE BY THE A.O. U/S. 11(2) OF THE ACT AMOUNTING TO RS. 16,88,49,536/- AND THE SECOND GRIEVANCE OF THE REVENUE RELATES TO THE DIRECTION TO VERIFY THE ISSUE RELATED TO MISC. & INTEREST INCOME AMOUNTING TO RS. 17,07,41,163/-. 3. THE ASSESSEE IS IN THE BUSINESS OF PREPARING MANUFA CTURING AND DISTRIBUTION OF GUJARAT STATE SCHOOL TEXT BOOKS AND OTHER EDUCATION AL ACTIVITIES. 4. PURSUANT TO THE NATURE OF ACTIVITIES CARRIED OUT BY THE ASSESSEE, THE ASSESSEE CLAIMED EXEMPTION U/S. 11 OF THE ACT. 5. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND ON VERIFICATION OF FORM NO. 10, THE A.O. NOTICED THAT THE RESOLUTION WAS PA SSED ON 27.09.2013 FOR HOLDING THE NET SURPLUS AS ON 31.03.2011 TO BE CARR IED FORWARD AND UTILIZED WITHIN NEXT FIVE YEARS. 6. THE A.O. WAS OF THE FIRM BELIEF THAT THE RESOLUTION HAS BEEN PASSED ON 27.09.2013 WHICH IS MUCH AFTER THE EXPIRY OF THE DU E DATE OF FILING OF THE RETURN U/S. 139(1) OF THE ACT. THE A.O. CONCLUDED BY DENY ING THE CLAIM OF EXEMPTION TO THE ASSESSEE. 7. ASSESSEE CARRIED THE MATTER THE BEFORE THE LD. CIT( A) AND REITERATED ITS CLAIM OF EXEMPTION. 8. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) WAS OF THE OPINION THAT THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT SQUARELY APPLY ITA NO. 2282 /AHD/2014 . A.Y. 2011-1 2 3 ON THE FACTS OF THE CASE AND ACCORDINGLY DIRECTED T HE A.O. TO ALLOW THE CLAIM OF EXEMPTION U/S. 11(2) OF THE ACT. 9. BEFORE US, THE LD. D.R. COULD NOT BRING ANY DISTING UISHING DECISION IN FAVOUR OF THE REVENUE. 10. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORI TIES BELOW. IT IS TRUE THAT THE RESOLUTION WAS PASSED MUCH AFTER THE DUE DATE OF FI LING OF THE RETURN. A SIMILAR ISSUE WAS CONSIDERED BY THE HONBLE HIGH COURT OF G UJARAT IN THE CASE OF STOCK EXCHANGE AHMEDABAD IN TAX APPEAL NOS. 207 TO 213 OF 2000 WHEREIN THE HONBLE HIGH COURT HAS HELD WHERE ASSESSEE HAD FILE D FORM NO. 10 AS REQUIRED UNDER RULE 17 BEFORE COMPLETION OF ASSESSMENT, IT W AS ENTITLED TO BENEFIT OF SECTION 11 ON BASIS OF INFORMATION SUPPLIED PRIOR T O FRAMING OF ASSESSMENT. THE RELEVANT FINDINGS OF THE HONBLE HIGH COURT REA DS AS UNDER:- 9. FROM THE FACTS AND CONTENTIONS NOTED HEREINABOVE , THE SOLE QUESTION THAT ARISES FOR CONSIDERATION IS WHETHER THE TRIBUNAL WA S JUSTIFIED IN HOLDING THAT THE TIME LIMIT PRESCRIBED FOR FILING FORM NO.10 UNDER R ULE 17 OF THE RULES READ WITH SECTION 11(2) OF THE ACT IS DIRECTORY. IN THE PRESE NT CASE, IT IS AN ADMITTED POSITION THAT THE ASSESSEE HAD FILED FORM NO. 10 AS REQUIRED UNDER RULE 17 OF THE RULES ALONGWITH THE REVISED RETURNS FILED IN RESPECT OF A LL THE ASSESSMENT YEARS UNDER CONSIDERATION. THUS, ADMITTEDLY, THE FORMS HAD BEEN SUBMITTED BEFORE THE ASSESSMENT CAME TO BE COMPLETED. AT THIS JUNCTURE R EFERENCE MAY BE MADE TO THE DECISION OF THE SUPREME COURT IN THE CASE OF NAGPUR HOTEL OWNERS' ASSOCIATION (SUPRA) ON WHICH RELIANCE HAD BEEN PLACED BY THE LE ARNED COUNSEL FOR THE REVENUE, WHEREIN IT HAS BEEN HELD THUS: '6. IT IS ABUNDANTLY CLEAR FROM THE WORDINGS OF SUB- SECTION (2) OF SECTION 11 THAT IT IS MANDATORY FOR THE PERSON CLAIMING THE BENEFIT OF SECTION 11 TO INTIMATE TO THE ASSESSING AUTHORITY THE PARTICUL ARS REQUIRED, UNDER RULE 17 IN FORM 10 OF THE ACT. IF DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER DOES NOT HAVE THE NECESSARY INFOR MATION, QUESTION OF EXCLUDING SUCH INCOME FROM ASSESSMENT DOES NOT ARIS E AT ALL. AS A MATTER OF FACT, THIS BENEFIT OF EXCLUDING THIS PARTICULAR PART OF THE INCOME FROM ITA NO. 2282 /AHD/2014 . A.Y. 2011-1 2 4 THE NET OF TAXATION ARISES FROM SECTION 1 1 AND IS SUBJECT TO THE CONDITIONS SPECIFIED THEREIN. THEREFORE, IT IS NECESSARY THAT THE ASSESSING AUTHORITY MUST HAVE THIS INFORMATION AT THE TIME HE COMPLETES THE ASSESSMENT. IN THE ABSENCE OF ANY SUCH INFORMATION, IT WILL NOT BE POSSIBLE FOR THE ASSESSING AUTHORITY TO GIVE THE ASSESSEE THE BENEFI T OF SUCH EXCLUSION AND ONCE THE ASSESSMENT IS SO COMPLETED, IN OUR OPINION , IT WOULD BE FUTILE TO FIND FAULT WITH THE ASSESSING AUTHORITY FOR HAVING INCLUDED SUCH INCOME IN THE ASSESSABLE INCOME OF THE ASSESSEE. THEREFORE, E VEN ASSUMING THAT THERE IS NO VALID LIMITATION PRESCRIBED UNDER THE A CT AND THE RULES EVEN THEN, IN OUR OPINION, IT IS REASONABLE TO PRESUME T HAT THE INTIMATION REQUIRED UNDER SECTION 11 HAS TO BE FURNISHED BEFOR E THE ASSESSING AUTHORITY COMPLETES THE ASSESSMENT CONCERNED BECAUS E SUCH REQUIREMENT IS MANDATORY AND WITHOUT THE PARTICULARS OF THIS IN COME THE ASSESSING AUTHORITY CANNOT ENTERTAIN THE CLAIM OF THE ASSESSE E UNDER SECTION 11 OF THE ACT, THEREFORE, COMPLIANCE WITH THE REQUIREMENT OF THE ACT WILL HAVE TO BE ANY TIME BEFORE THE ASSESSMENT PROCEEDINGS. F URTHER, ANY CLAIM FOR GIVING THE BENEFIT OF SECTION 11 ON THE BASIS OF IN FORMATION SUPPLIED SUBSEQUENT TO THE COMPLETION OF ASSESSMENT WOULD ME AN THAT THE ASSESSMENT ORDER WILL HAVE TO BE REOPENED. IN OUR O PINION, THE ACT DOES NOT CONTEMPLATE SUCH REOPENING OF THE ASSESSMENT. I N THE CASE IN HAND IT IS EVIDENT FROM THE RECORDS OF THE CASE THAT THE RE SPONDENT DID NOT FURNISH THE REQUIRED INFORMATION TILL AFTER THE ASSESSMENTS FOR THE RELEVANT YEARS WERE COMPLETED. IN THE LIGHT OF THE ABOVE, WE ARE O F THE OPINION THAT THE STAND OF THE REVENUE THAT THE HIGH COURT ERRED IN A NSWERING THE FIRST QUESTION IN FAVOUR OF THE ASSESSEE IS CORRECT, AND WE REVERSE THAT FINDING AND ANSWER THE SAID QUESTION IN THE NEGATIVE AND AG AINST THE ASSESSEE.' 9. EXAMINING THE FACTS OF THE PRESENT CASE IN THE L IGHT OF THE PRINCIPLES ENUNCIATED IN THE ABOVE DECISION, AS NOTICED EARLIER, THE ASSE SSEE FILED FORM NO. 10 UNDER RULE 17 OF THE RULES AT THE TIME OF FILING REVISED RETURNS IN RESPECT OF EACH OF THE ASSESSMENT YEARS UNDER CONSIDERATION. THUS, EVIDENT LY, THE REQUIREMENTS OF SECTION 11(2) OF THE ACT HAD BEEN COMPLIED WITH BEF ORE THE COMPLETION OF THE ASSESSMENTS. THEREFORE, WHILE COMPLETING THE ASSESS MENTS FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, THE ASSESSING OFFICER HA D THE NECESSARY INFORMATION IN RESPECT OF THE CLAIM FOR EXEMPTION UNDER SECTION 11 OF THE ACT MADE BY THE ASSESSEE BEFORE HIM. THUS, THIS IS NOT A CASE WHERE INFORMATION IN RESPECT OF THE CLAIM OF THE ASSESSEE FOR GIVING BENEFIT OF SECTION 11 OF THE ACT WAS FURNISHED AFTER THE ASSESSMENTS FOR THE RELEVANT ASSESSMENT Y EARS WERE COMPLETED. UNDER ITA NO. 2282 /AHD/2014 . A.Y. 2011-1 2 5 THE CIRCUMSTANCES, THE PRESENT CASE IS SQUARELY COV ERED BY THE AFORESAID DECISION OF THE SUPREME COURT. THE ASSESSEE WAS. THEREFORE, ENTITLED TO THE BENEFIT OF SECTION 11 OF THE ACT ON THE BASIS OF THE INFORMATI ON SUPPLIED BY IT PRIOR TO FRAMING OF THE ASSESSMENT ORDERS. 10. IT MAY ALSO BE NOTED THAT THIS COURT IN THE CA SE OF MAYUR FOUNDATION ( SUPRA) HAS HELD THAT THE ASSESSMENT PROCEEDINGS CANNOT BE SAID TO BE COMPLETE AND ARE PENDING TILL THE APPEAL IS HEARD AND DISPOSED OF BY THE TRIBUNAL AND ACCORDINGLY HELD THAT THE TRIBUNAL WAS JUSTIFIED IN CONSIDERING A NEW GROUND BY THE ASSESSEE CLAIMING BENEFIT UNDER SECTION 11 OF THE ACT DURING THE COURSE OF THE APPEAL. AS RIGHTLY URGED BY THE LEARNED COUNSEL FOR THE ASSESS EE, IN THE PRESENT CASE, THE ASSESSEE STANDS ON AN EVEN STRONGER FOOTING INASMUC H AS THE PARTICULARS IN FORM NO. 10 UNDER RULE 17 OF THE RULES HAD BEEN FURNISHE D ALONGWITH THE REVISED RETURN BEFORE THE ASSESSMENT CAME TO BE COMPLETED. 11. IN THE LIGHT OF THE ABOVE DISCUSSION, IT IS NOT POS SIBLE TO STATE THAT THERE IS ANY LEGAL INFIRMITY IN THE IMPUGNED ORDER OF THE TRIBUN AL IN HOLDING THAT RULE 17 OF THE RULES IS DIRECTORY IN NATURE AND IN HOLDING THAT TH E ASSESSEE HAD DULY COMPLIED WITH THE REQUIREMENTS OF SUB-SECTION (2) OF SECTION 11 OF THE ACT. 11. WE FIND THAT THE FIRST APPELLATE AUTHORITY HAS FOLL OWED THE JUDGMENT OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF MAYUR FOUNDATION WHICH HAS BEEN CONSIDERED BY THE HONBLE HIGH COURT OF GUJARA T IN THE JUDGMENT CITED HEREINABOVE. WE, THEREFORE, DO NOT FIND ANY ERROR O R INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). 12. APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 27 - 07- 20 17 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 27/07/2017