Smt Shanthi Bai Deepachand Sanghvi Trust , Davangere V. Assistant Commissioner of Income Tax Circle-1(1), Davangere

ITA 2312/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2329 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 02-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER APPEAL NOS. AND ASSESSMENT YEARS APPELLANT RESPONDENT ITA NO. 2311/BANG/2018 2012-13 M/S. DEVICHAND KESAJI SWETHAMBAR JAIN TRUST, #750/1, C. V. COMPOUND, TALUK OFFICE ROAD, DAVANGERE. PAN : AAATD 3832 H ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 1(1), DAVANGERE. ITA NO. 2312/BANG/2018 2012-13 SMT. SHANTHIBAI DEEPCHAND SANGHVI TRUST, #300/1, CHAMARAJAPET, DAVANGERE 577 001. PAN : AAATS 4608 Q -DO- ASSESSEE BY : NONE REVENUE BY : SHRI. PRIYADARSHI MISHRA, JCIT, SPECIAL RANGE - III DATE OF HEARING : 14 .0 8 .2018 DATE OF PRONOUNCEMENT : 07 .0 9 .2018 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDER OF THE CIT(A) ON COMMON GROUNDS. WE, HOWEVER, FOR THE SAKE OF REFERENCE, EXTRACT THE GROUNDS RAISED IN ITA NO. 2311/BANG/2018 AS UNDER: GROUNDS OF APPEAL IN ITA NO. 2311/BANG/2018 1. HIGH COURT OF GUJRAT DECISION: IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME-TAX VERSUS STOCK EXCHANGE AHMEDABAD. IN THE INSTANT CASE THE ASSESSEE HAD FURNISHED FORM NO.10 UNDER RULE 17 OF THE RULES ALONG WITH THE REVISED RETURN, THAT IS, PRIOR TO ITA NOS.2311 AND 2312/BANG/2018 PAGE 2 OF 6 THE COMPLETION OF THE ASSESSMENT. REFERRING TO THE DECISION OF THIS COURT IN THE CASE OF CIT V. MAYUR FOUNDATION [2005] 274 ITR 562 (GUJ.), IT WAS SUBMITTED THAT THIS COURT, IN A CASE WHERE THE REQUIREMENTS OF RULE 17 OF THE RULES HAD BEEN COMPLIED WITH AT THE STAGE OF APPEAL BEFORE THE TRIBUNAL, HAD HELD THAT THE TRIBUNAL WAS WELL WITHIN ITS JURISDICTION TO ENTERTAIN A NEW GROUND BY WHICH THE ASSESSEE CLAIMED THE BENEFIT UNDER SECTION 11(2) OF THE ACT AND ADJUDICATE THE TAX LIABILITY OF THE ASSESSEE. IT WAS SUBMITTED THAT THE COURT HAD CONSIDERED THE DECISION OF THE SUPREME COURT IN THE CASE OF NAGPUR HOTEL OWNERS' ASSOCIATION (SUPRA) AND HAD HELD THAT THE APEX COURT HAD STATED THAT THE DETAILS HAVE TO BE FURNISHED BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS AND ANY INFORMATION SUPPLIED SUBSEQUENT TO THE COMPLETION OF ASSESSMENT CANNOT BE TAKEN INTO CONSIDERATION. IT WAS POINTED OUT THAT IN THE FACTS OF THE SAID CASE, THE COURT HAD HELD THAT EVEN AT THE STAGE OF APPEAL, THE ASSESSMENT PROCEEDINGS COULD BE SAID TO BE PENDING AND AS SUCH, THE DETAILS COULD BE FURNISHED EVEN AT THE STAGE OF APPEAL, TO SUBMIT THAT IN THE PRESENT CASE, THE ASSESSEE STANDS ON AN EVEN STRONGER FOOTING INASMUCH AS THE NECESSARY INFORMATION HAD BEEN SUPPLIED BEFORE THE COMPLETION OF THE ASSESSMENT BY THE ASSESSING OFFICER. IT WAS, ACCORDINGLY, SUBMITTED THAT THE CONTROVERSY INVOLVED IN THE PRESENT CASE, STANDS CONCLUDED BY THE ABOVE REFERRED DECISION OF THIS COURT. A COPY OF THE ABOVE HIGH COURT DECISION IS HEREWITH ENCLOSED FOR YOUR KIND REFERRAL 2. SUPREME COURT DECISION: IN THE CASE OF COMMISSIONER OF INCOME TAX VS NAGPUR HOTEL OWNERS ASSOCIATION, (2001[247ITR201]THE HONORABLE SUPREME COURT HAS HELD THAT FORM NO. 10 CAN BE FILED BEFORE THE COMPLETION OF THE ASSESSMENT. A COPY OF THE ABOVE SUPREME COURT DECISION IS HEREWITH ENCLOSED FOR YOUR KIND REFERRAL SO IT IS EVIDENT FROM THE ABOVE FACT THAT FILING OF FORM-10 BEFORE THE COMPLETION OF ASSESSMENT IS VALID. HENCE IN THE INSTANT CASE THE ASSESSEE TRUST HAS FILED FORM -10 WELL BEFORE THE ASSESSMENT IS COMPLETED AND HENCE FORM -10 CAN NOT BE REJECTED. FURTHER, THE ASSESSING OFFICER IN HIS ASST. ORDER HAS REJECTED THE FORM -10 STATING THAT IT DOES NOT SPECIFY THE PURPOSE FOR WHICH THE SURPLUS INCOME IS SET APART. ITA NOS.2311 AND 2312/BANG/2018 PAGE 3 OF 6 HOWEVER THE APPELLANT HAS FILED THE EXTRACT OF BOARD RESOLUTION ALONG WITH FORM-10 CLEARLY SPECIFYING THE PURPOSE FOR WHICH THE SURPLUS INCOME IS SET APART. SO FORM -10 CANNOT BE TREATED AS ERRONEOUS. FURTHER, THE APPELLANT TRUST HAS ACCUMULATED THE SURPLUS AS SPECIFIED IN SEC 11(2) AND THE SURPLUS SO ACCUMULATED IS INVESTED IN THE MODES SPECIFIED IN SUB SECTION (5) OF SEC 11. THE APPELLANT TRUST HAS NOT UTILIZED THE SURPLUS FOR THE PURPOSES OTHER THAN CHARITABLE OR RELIGIOUS PURPOSES. THE VERY INTENTION OF THE LAW IS THAT THE SURPLUS/INCOME OF THE TRUST SHOULD NOT BE APPLIED FOR THE PURPOSES OTHER THAN CHARITABLE OR RELIGIOUS PURPOSES. AND SUBMISSION OF FORM -10 IS ONLY A PROCEDURAL MATTER REQUIRING THE TRUST TO NOTIFY THE ASSESSING OFFICER REGARDING THE ACCUMULATION OF SURPLUS. SO IT IS EVIDENT FROM THE ABOVE FACTS THAT THE ADDITIONS MADE BY A 0 IS NOT IN ORDER. AGGRIEVED BY THE ASST ORDER PASSED BY THE A 0 THE APPELLATE HAS FILED AN APPEAL BEFORE CIT (APPEALS) DAVANGERE. DURING THE COURSE OF PROCEDINGS BEFORE CIT (APPEALS) THE APPELLATE HAS ONCE AGAIN SUBMIITTED FORM 10 CLEARLY STATING THE PURPOSE FOR WHICH THE SURPLUS OF THE TRUST IS ACCUMULATED. CIT(APPEALS) HAS DISMISSED THE CASE ON THE GROUND THAT THE FORM NO. 10 FILED BEFORE A O WAS DEFECTIVE. THE APPELLANT HAS FILED BEFORE THE A 0 THE EXTRACT OF BOARD RESOLUTION ALONG WITH FORM-10 CLEARLY SPECIFYING THE PURPOSE FOR WHICH THE SURPLUS INCOME IS SET APART. SO FORM -10 CANNOT BE TREATED AS DEFECTIVE. FURTHER THE APPELLANT HAS FILED ONE MORE FORM NO 10 BEFORE THE CIT (APPEALS) CLEARLY STATING THE PURPOSE FOR WHICH THE SURPLUS OF THE TRUST IS ACCUMULATED. SINCE THE ASSESSMENT IS STILL PENDING AND NOT COMPLETED, THE CIT (APPEALS) WOULD HAVE ACCEPTED 'THE FORM 10. BECAUSE SUBMISSION OF FORM 10 BEFORE THE COMPLETION OF ASSESSMENT IS VALID AS DECIDED BY SUPREME COURT IN THE ABOVE MENTIONED CASE. FURTHER, THE APPELLANT TRUST HAS ACCUMULATED THE SURPLUS AS SPECIFIED IN SEC 11(2) AND THE SURPLUS SO ACCUMULATED IS INVESTED IN THE MODES SPECIFIED IN SUB SECTION (5) OF SEC 11. THE APPELLANT TRUST HAS NOT UTILIZED THE SURPLUS FOR THE PURPOSES OTHER THAN CHARITABLE OR RELIGIOUS PURPOSES. THE VERY INTENTION OF THE LAW IS THAT THE SURPLUS/INCOME OF THE TRUST SHOULD NOT BE APPLIED FOR ITA NOS.2311 AND 2312/BANG/2018 PAGE 4 OF 6 THE PURPOSES OTHER THAN CHARITABLE OR RELIGIOUS PURPOSES. AND SUBMISSION OF FORM -10 IS ONLY A PROCEDURAL MATTER REQUIRING THE TRUST TO NOTIFY THE ASSESSING OFFICER REGARDING THE ACCUMULATION OF SURPLUS. AGGRIEVED BY THE AFORESAID ORDER, THE APPELLANT IS MOVING THIS APPEAL BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL BANGALORE SEEKING REDRESSAL OF THE GRIEVANCES. APPELLANT HEREBY REQUEST YOUR HONOUR TO REJECT THE ADDITIONS MADE BY THE ASSESSING OFFICER AND DROP FURTHER PROCEEDINGS. AND FOR THIS ACT OF KINDNESS, MY CLIENT, AS DUTY BOUND, SHALL EVER PRAY, THE FOLLOWING DOCUMENTS ARE ATTACHED TO THIS APPEAL PAPERS 1. CIT (APPEALS) ORDER 2. ORDER PASSED BY AO 3. COPIES OF GROUNDS OF APPEAL BEFORE FIRST APPELLATE AUTHORITY 4. COPIES HIGH COURT & SUPREME COURT CASES FOR YOUR KIND REFERRAL 5. FORM NO. 10 2. THESE APPEALS CAME UP FOR HEARING ON 14.08.2018 BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. THE ASSESSEE, HOWEVER, FILED THE WRITTEN SUBMISSIONS FOR CONSIDERATION AND DISPOSAL OF THE APPEAL. ACCORDINGLY, THE LEARNED DR WAS HEARD. 3. WE HAVE CAREFULLY EXAMINED THE WRITTEN SUBMISSIONS VIS-A-VIS THE ORDER OF THE LOWER AUTHORITIES AND WE FIND THAT ASSESSEE HAS NOT SPENT 85% TOWARDS OBJECT OF THE TRUST AS NOTED BY THE AO. THEREFORE, THE ASSESSEE WAS REQUIRED TO FILE FORM NO. 10 ALONG WITH THE RETURN OF INCOME SPECIFYING THAT THE SURPLUS INCOME WAS SET APART FOR A PARTICULAR PURPOSE AS PRESCRIBED UNDER THE OBJECT OF THE TRUST, BUT INITIALLY THE ASSESSEE DID NOT FILE FORM NO.10 ALONG WITH THE RETURN OF INCOME THOUGH IT WAS OBJECTED TO BY THE AO. THE ASSESSEE FILED FORM NO. 10 ALONG WITH THE BOARD RESOLUTION BUT DID NOT SPECIFY THE OBJECT FOR WHICH PARTICULAR AMOUNT WAS SET APART. THE AO ACCORDINGLY DID NOT CONSIDER FORM NO. 10 AS IT IS INVALID AND MADE THE ADDITIONS. ASSESSEE PREFERRED AN APPEAL ITA NOS.2311 AND 2312/BANG/2018 PAGE 5 OF 6 BEFORE THE CIT(A) BUT HE DID NOT IMPROVE HIS CASE AND CIT(A) HAS ALSO NOTED THE DEFECT IN FORM NO. 10 AS IT DID NOT SPECIFY THE PURPOSE FOR WHICH SURPLUS INCOME IS SET APART. THE CIT(A) ACCORDINGLY CONFIRMED THE REJECTION OF FORM NO. 10 AND UPHELD THE ADDITION. 4. THOUGH THE ASSESSEE HAS FILED AN APPEAL BEFORE US AND FILED THE WRITTEN SUBMISSIONS RELYING UPON CERTAIN CASE LAWS WHICH WERE DEALT WITH BY THE CIT(A) BUT DID NOT APPEAR AT THE TIME OF HEARING. THEREFORE, WE HAD NO OTHER OPTION BUT TO PERUSE THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. ALONG WITH THE WRITTEN SUBMISSIONS, COPY OF FORM NO. 10 WAS NOT FILED, THEREFORE, I AM BOUND TO ACCEPT THE OBSERVATIONS OF THE CIT(A) MADE WITH REFERENCE TO FORM NO. 10. IN FORM NO. 10, ASSESSEE IS REQUIRED TO SPECIFY THE PURPOSE FOR WHICH SURPLUS INCOME IS SET APART. IF HE FAILS TO DO SO, HE CANNOT GET THE BENEFIT OF FILING FORM NO. 10. UNDER THESE CIRCUMSTANCES, I FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). SIMILAR IS THE POSITION IN OTHER APPEAL BEARING ITA NO. 2312/BANG/2018. THEREFORE, IN BOTH THE CASES, I UPHOLD THE ORDER OF THE CIT(A). 5. IN THE RESULT, APPEALS OF THE ASSESSEE STAND DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF SEPTEMBER, 2018. SD/- SD/- (A. K. GARODIA) ( SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE. DATE: 7 TH SEPTEMBER, 2018. /NS/ ITA NOS.2311 AND 2312/BANG/2018 PAGE 6 OF 6 COPY TO: 1. APPELLANTS 2. RESPONDENTS 3. CIT 4. DR 5. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE