M/s. Agricultural Produce Marketing Committee, Chitradurga V. Income Tax Officer, Ward-1, Chitradurga

ITA 395/BANG/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5442 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-09-2021
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANKAR GANESH J BENGALURU
• Assessee Lawyers: V SRINIVASAN
• Keywords: Charitable institution; Capital receipt; Condonation of delay; Capital expenditure; Set aside
• Section: 143(3); 119(2)(b); 12AA; 139(1); 13; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A, BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 395/BANG/2020 ASSESSMENT Y EAR : 20 05 - 06 M/S. AGRICULTURAL PRODUCE MARKETING COMMITTEE, APMC YARD, BANGALORE ROAD, CHALLAKERE 577 522, CHITRADURGA. PAN AAAAA 4743 R VS. INCOME-TAX OFFICER, WARD 1, CHITRADURGA. APPELLANT RESPONDENT APPELLANT BY : SHRI.V. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI. SANKAR GANESH, JCIT(DR)(ITAT), BENGALURU DATE OF HEARING : 07.09.2021 DATE OF PRONOUNCEMENT : 22.09.2021 O R D E R PER SHRI B.R. BASKARAN, AM : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 28-02-2020 PASSED BY LD CIT(A), DAVANGERE AND IT RE LATES TO THE ASSESSMENT YEAR 2005-06. THE GROUNDS URGED BY THE ASSESSEE GIVE RISE TO FOLLOWING ISSUES:- (A) ASSESSMENT OF MATURITY AMOUNT OF FIXED DEPOSIT AS INCOME. (B) REJECTION OF CLAIM OF APPLICATION OF INCOME IN RESPECT OF CERTAIN FIXED ASSETS. (C) REJECTION OF CLAIM FOR ACCUMULATION OF INCOME U/S 11(2) OF THE ACT. 2. THE FACTS RELATING TO THE CASE ARE DISCUSSED IN BRIEF. THE ASSESSEE IS ENGAGED IN MARKETING ACTIVITIES OF AGRICULTURAL PRODUCE. IT OBTAINED REGISTRATION U/S 12AA OF THE ACT WITH EFFECT FROM 1 .4.2002. ACCORDINGLY, ITA NO.395 /BANG/2020. PAGE 2 OF 10 IT FILED ITS RETURN OF INCOME DECLARING NIL CLAIMIN G EXEMPTION U/S 11 & 12 OF THE ACT. THE AO COMPLETED THE ASSESSMENT U/S 143(3) ON 30-03- 2007 DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS .76,88,340/-. THE ASSESSEE CARRIED THE MATTER TO LD CIT(A) AND THEN T O THE ITAT. THE TRIBUNAL, VIDE ITS ORDER DATED 30-10-2009 PASSED IN ITA NO.482/BANG/2008 RESTORED ALL THE MATTERS TO THE FI LE OF AO FOR PASSING FRESH ASSESSMENT ORDER. ACCORDINGLY, THE AO PASSED THE IMPUGNED ASSESSMENT ORDER, WHEREIN HE DETERMINED THE TOTAL I NCOME OF THE ASSESSEE AT RS.76,88,340/-. THE LD CIT(A) GAVE PA RTIAL RELIEF AND HENCE THE ASSESSEE HAS FILED THIS APPEAL IN RESPECT OF AB OVE SAID THREE ISSUES. 3. THE FIRST ISSUE RELATES TO ASSESSMENT OF M ATURITY AMOUNT OF FIXED DEPOSIT AS INCOME OF THE ASSESSEE. THE ASSESSEE HA S SUBMITTED RECEIPTS AND PAYMENTS ACCOUNT BEFORE THE AO, WHER EIN THE ASSESSEE HAS SHOWN RECEIPT OF MATURITY PROCEEDS OF FIXED DEP OSIT KEPT WITH A BANK AMOUNTING TO RS.50.00 LAKHS. THE AO OBSERVED THAT THE PROVISIONS OF SEC.11 USE THE EXPRESSION INCOME AN D NOT TOTAL INCOME. THE EXPRESSION TOTAL INCOME HAS BEEN DEFINED U/S 2(45) OF THE ACT AS THE TOTAL AMOUNT OF INCOME AS COMPUTED IN THE MANN ER LAID DOWN IN THIS ACT. ACCORDINGLY HE TOOK THE VIEW THAT IT WO ULD BE INCORRECT TO ASSIGN THE MEANING OF THE WORD TOTAL INCOME TO TH E WORD INCOME. ACCORDINGLY, THE AO TOOK THE VIEW THAT THE GROSS R ECEIPTS EXCLUDING CORPUS DONATION SHALL CONSTITUTE INCOME OF TRUST O R INSTITUTION. ACCORDINGLY, HE ASSESSED THE MATURITY PROCEEDS OF F IXED DEPOSITS AMOUNTING TO RS.50.00 LAKHS AS INCOME OF THE ASSESS EE. THE LD CIT(A) ALSO CONFIRMED THE SAME. 4. WE HEARD THE PARTIES AND PERUSED THE RECORD . WE HAVE NOTICED THAT THE AO HAS TAKEN THE VIEW THAT THE GROSS RECE IPTS EXCLUDING CORPUS DONATION SHALL CONSTITUTE THE INCOME OF TRUST OR I NSTITUTION. WE NOTICE THAT THE ASSESSING OFFICER HAS CONSIDERED ONLY THE INCOME AND EXPENDITURE ACCOUNT FURNISHED BY THE ASSESSEE TO A SSESS THE INCOME OF ITA NO.395 /BANG/2020. PAGE 3 OF 10 RS.40,60,376/- SHOWN THEREIN. HE HAS, HOWEVER, SIN GLED OUT THE RECEIPT OF MATURITY PROCEEDS OF FIXED DEPOSIT AMOU NTING TO RS.50.00 LAKHS AND ASSESSED THE SAME AS INCOME OF THE ASSES SEE AS PER HIS UNDERSTANDING OF LAW, WHICH WAS STATED ABOVE. 5. HOWEVER, A CAREFUL READING OF PROVISIONS OF S EC.11 WOULD SHOW THAT THIS SECTION PRESCRIBES EXEMPTION, I.E., WHAT TYPES OF INCOME IS EXEMPTED U/S 11 OF THE ACT. THIS SECTION STATES THAT SUBJE CT TO THE PROVISIONS OF SEC. 60 TO 63, THE FOLLOWING INCOME SHALL NOT BE IN CLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIP T OF THE INCOME:- (A) INCOME DERIVED FROM PROPERTY HELD UNDER THE TRU ST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA.... HENCE WHAT IS EXEMPTED IS THE INCOME APPLIED FOR CH ARITABLE OR RELIGIOUS PURPOSES. IT DOES NOT TALK ABOUT CONCEPT OF INCOM E AS UNDERSTOOD BY THE AO, MEANING THEREBY, THE CONCEPT OF INCOME IS SAME FOR A CHARITABLE TRUST AND OTHER ASSESSEES. HOWEVER, THE ACT PRESCRIBES CERTAIN EXCEPTION TO CHARITABLE TRUSTS TO THE GENER AL MEANING OF INCOME. THE WORD INCOME IS DEFINED IN SEC.2(24) OF THE AC T. A PERUSAL OF THE PROVISIONS OF SEC.2(24) WOULD SHOW THAT ALL THE REC EIPTS LISTED THEREIN FALLS UNDER THE CATEGORY OF INCOME AS UNDERSTOOD IN COMMERCIAL SENSE, EXCEPT IN CERTAIN ITEMS, WHICH THE LEGISLATURE WANT ED TO BRING IT UNDER THE DEFINITION OF INCOME. UNDER CLAUSE (IIA) OF SE C. 2(24), VOLUNTARY CONTRIBUTIONS RECEIVED BY A CHARITABLE TRUST IS BR OUGHT UNDER THE DEFINITION OF INCOME, EVEN THOUGH IT MAY NOT FALL U NDER THE CATEGORY OF INCOME UNDER ACCOUNTING PRINCIPLES. THUS, IF A REC EIPT DOES NOT POSSESS THE CHARACTER OF INCOME IN COMMERCIAL/ACCOUNTING SENSE, IT CANNOT BE CATEGORISED AS INCOME UNDER THE INCOME TAX ACT UNLE SS THERE IS AN EXPRESS PROVISION TO TREAT THE SAME AS INCOME. IN T HAT CASE, THE SAID RECEIPT IS LIABLE TO BE TAXED AS INCOME UNDER INCOM E TAX ACT. ITA NO.395 /BANG/2020. PAGE 4 OF 10 6. AS STATED EARLIER, SEC.11 OF THE ACT PRESCR IBES EXEMPTION FROM TAXATION OF INCOME OF THE CHARITABLE TRUST TO THE E XTENT PROVIDED IN THAT SECTION, MEANING THEREBY, ALL INCOME OF CHARITABLE TRUST IS TAXABLE EXCEPT TO THE EXTENT PROVIDED IN SEC.11. IN VIEW OF THE ABOVE, THE CONCEPT OF INCOME HAS TO BE UNDERSTOOD IN TERMS OF SEC.2(24) AND OTHER PROVISIONS OF THE ACT. HENCE, THE VIEW EXPRESSED BY THE AO TH AT THE GROSS RECEIPTS EXCLUDING CORPUS DONATION SHALL CONSTITUTE THE INC OME OF TRUST OR INSTITUTION IS CONTRARY TO THE PROVISIONS OF INCOME TAX ACT. THE TOTAL INCOME HAS TO BE COMPUTED IN THE HANDS OF A CHARIT ABLE TRUST IN ACCORDANCE WITH THE PROVISIONS OF SEC.11 TO 13 OF T HE ACT AND THE SAME ALSO SATISFIES THE DEFINITION OF TOTAL INCOME GIV EN U/S 2(45) OF THE ACT. 7. WE HAVE NOTICED THAT THE ASSESSING OFFICER HAS ASSESSED MATURITY PROCEEDS OF FIXED DEPOSIT AS INCOME OF THE ASSESSEE . THERE SHOULD NOT BE ANY DISPUTE THAT THE MATURITY PROCEED OF A FIXED DEPOSIT IS CAPITAL RECEIPT IN THE HANDS OF THE RECIPIENT. A CAPITAL RECEIPT CANNOT BE SUBJECTED TO TAX EXCEPT UNDER THE AUTHORITY OF LAW. IN ANY CASE, WHAT WAS RECEIVED BY THE ASSESSEE ON MATURITY OF FIXED D EPOSIT IS THE MATURITY PROCEEDS OF THE AMOUNT DEPOSITED BY IT EARLIER. TH E INTEREST EARNED ON THE SAID FIXED DEPOSIT SHALL CONSTITUTE INCOME IN T HE HANDS OF THE ASSESSEE. ACCORDINGLY, MATURITY PROCEEDS OF FIXED DEPOSIT CANNOT CONSTITUTE INCOME IN THE HANDS OF ASSESSEE UNDER AN Y COUNT. HENCE THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ASSE SSMENT OF THE MATURITY PROCEEDS OF FIXED DEPOSIT AS INCOME OF THE ASSESSEE . ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE A ND DIRECT THE AO TO DELETE THE ADDITION OF RS.50.00 LAKHS RELATING TO M ATURITY PROCEEDS OF FIXED DEPOSIT. 8. THE NEXT ISSUE RELATES TO THE CLAIM OF CERTA IN FIXED ASSETS AS APPLICATION OF INCOME. THE AO NOTICED THAT THE ASS ESSEE HAS ACQUIRED CERTAIN FIXED ASSETS, WHICH WERE SHOWN IN THE BALAN CE SHEET. ACCORDINGLY, THE AO ALLOWED AN AGGREGATE AMOUNT OF INVESTMENT IN FIXED ITA NO.395 /BANG/2020. PAGE 5 OF 10 ASSETS AMOUNTING TO RS.7,65,302/- AS APPLICATION OF INCOME. BEFORE THE LD CIT(A), THE ASSESSEE MADE FURTHER FOLLOWING CLAI MS AS ACQUISITION OF FIXED ASSETS:- (1) HAMALIS JANASHREE INS. SHISKA SAHAYOGA - RS. 26,795 (2) PAYMENT TO KRISHIPET - RS.24,968 (3) EARNEST MONEY DEPOSIT - RS.36,061 (4) COMMITTEE ROAD, BUILDING SEWERAGE REPAIR - RS.7,29,227 THE LD CIT(A) NOTICED THAT THE ASSESSEE HAS CLAIMED THE EXPENDITURE OF RS.7,29,227/- REFERRED ABOVE IN THE INCOME AND EXPE NDITURE ACCOUNT. HENCE HE HELD THAT THE SAME CANNOT BE ALLOWED AGAIN . WITH REGARD TO THE REMAINING AMOUNTS, THE LD CIT(A) HELD THAT THE ASSESSEE HAS NOT FURNISHED ANY DETAIL AND FURTHER THEY DO NOT APPEAR TO BE IN THE NATURE OF CAPITAL EXPENDITURE. ACCORDINGLY, HE REJECTED T HE ABOVE SAID CLAIM OF THE ASSESSEE. 9. WE HEARD THE PARTIES ON THIS ISSUE AND PERU SED THE RECORD. WE DO NOT FIND ANY INFIRMITY IN THE DECISION RENDERED BY LD CIT(A) ON THIS ISSUE. THE ASSESSEE HAS CLAIMED THE EXPENDITURE OF RS.7,29,227/- REFERRED ABOVE IN THE INCOME AND EXPENDITURE ACCOUN T. HENCE IT CANNOT AGAIN BE ALLOWED AS APPLICATION OF INCOME. WITH RE GARD TO REMAINING THREE ITEMS, THE ASSESSEE HAS NOT FURNISHED ANY DET AIL BEFORE US ALSO AND FURTHER THE ASSESSEE HAS NOT PROVED THAT THEY ARE I N THE NATURE OF CAPITAL EXPENDITURE RESULTING IN ACQUISITION OF ANY ASSET. ACCORDINGLY WE CONFIRM THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE . 10. THE LAST ISSUE RELATES TO REJECTION OF FOR M NO.10 FILED BY THE ASSESSEE FOR ACCUMULATION OF INCOME U/S 11(2) OF TH E ACT. THE LD A.R SUBMITTED THAT THE ASSESSEE DID NOT FURNISH FORM NO .10 FOR ACCUMULATION OF INCOME BEFORE THE ASSESSING OFFICER WITHIN THE DUE DATE PRESCRIBED FOR FILING RETURN OF INCOME U/S 139(1) O F THE ACT. HOWEVER, BEFORE THE CONCLUSION OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE FILED THE FORM NO.10 DATED 08-01-2007 BEFORE LD CIT ALONG WIT H THE PETITION ITA NO.395 /BANG/2020. PAGE 6 OF 10 REQUESTING LD CIT TO CONDONE THE DELAY IN FILING FO RM NO.10. HOWEVER, THE LD CIT, VIDE HIS ORDER DATED 14.03.2007 PASSED U/S 119(2)(B) OF THE ACT, REFUSED TO CONDONE THE DELAY, INTER ALIA, FOR THE REASON THAT THE ASSESSEE DID NOT FILE APPLICATION IN FORM NO.10 BEF ORE THE AO. THE AO ALSO REFUSED TO ALLOW ACCUMULATION OF INCOME U/S 11 (2) FOR THE REASONS THAT THE LD CIT HAS REFUSED TO CONDONE THE DELAY AN D THE ASSESSEE HAS NOT FILED FORM NO.10 BEFORE THE AO. THE LD CIT(A) ALSO CONFIRMED THE ORDER PASSED BY AO ON THIS ISSUE. 11. THE LD A.R SUBMITTED THAT THE PRESENT ASSE SSMENT ORDER HAS BEEN PASSED BY THE AO IN SECOND ROUND OF PROCEEDING S, SINCE ALL THE ISSUES WERE SET ASIDE BY ITAT TO HIS FILE. A COMPA RISON OF ORIGINAL ASSESSMENT ORDER AND THE PRESENT ASSESSMENT ORDER W OULD SHOW THAT THE AO HAS COPIED VERBATIM THE ORIGINAL ASSESSMENT ORDER. THE ASSESSEE MIGHT NOT HAVE FILED FORM NO.10 BEFORE THE AO DURIN G ORIGINAL ASSESSMENT PROCEEDINGS, SINCE THE SAME WAS BELATED. THE ASSESSEE WAS ADVISED TO GET THE DELAY CONDONED BY LD CIT AND HEN CE THE ASSESSEE FILED FORM NO.10 BEFORE LD CIT DURING THE COURSE OF ORIGI NAL ASSESSMENT PROCEEDINGS ALONG WITH A PETITION TO CONDONE THE DE LAY. IN THE SECOND ROUND, THE ASSESSEE HAS FURNISHED COPY OF ORDER PAS SED BY LD CIT ALONG WITH FORM NO.10 BEFORE THE AO. HE FURTHER SUBMITTE D THAT THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD IN THE CASE OF G OKULA EDUCATION FOUNDATION (394 ITR 236) HAS HELD THAT THE FORM NO. 10 COULD BE FILED BEFORE THE APPELLATE AUTHORITIES ALSO. 12. THE LD D.R, ON THE CONTRARY, PLACED HIS REL IANCE ON THE ORDER PASSED BY THE AO ON THIS ISSUE. HE FURTHER SUBMITT ED THAT THE MATTER OF CONDONATION OF DELAY WAS SUBJECT MATTER WAS WRIT FI LED BY THE ASSESSEE BEFORE HONBLE HIGH COURT OF KARNATAKA AND THE HIGH COURT HAS REJECTED THE WRIT PETITION. ITA NO.395 /BANG/2020. PAGE 7 OF 10 13. IN THE REJOINDER, THE LD A.R SUBMITTED THAT THE HONBLE HIGH COURT HAS ONLY REFUSED TO ADMIT THE WRIT AND THE HIGH COU RT DID NOT EXPRESS ANY OPINION AGAINST THE ASSESSEE. ACCORDINGLY HE S UBMITTED THAT THE REMEDY AVAILABLE TO THE ASSESSEE CANNOT BE SHUT DOW N ON THIS REASON. 14. WE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. A PERUSAL OF THE ORDER PASSED BY HONBLE HIGH COURT OF KARNATAKA ON THE WRIT FILED BY THE ASSESSEE WOULD SHOW THAT THE HONBLE HIGH COURT DID NOT EXPRESS ANY VIEW ON THE PRAYER OF THE ASSESSEE AND SIMPLY R EJECTED THE WRIT. BE THAT AS IT MAY, AS POINTED OUT BY LD A.R, THE IMPUG NED ASSESSMENT ORDER HAS BEEN PASSED BY THE AO IN CONSEQUENCE TO T HE ORDER PASSED BY ITAT. DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, IT MAY BE THE CASE THAT THE ASSESSEE HAS NOT FILED FORM NO.10 BEFORE T HE AO. HOWEVER, IT CANNOT BE SAID THAT THE SAME SITUATION/POSITION PRE VAILED DURING SECOND ROUND OF PROCEEDINGS ALSO. WE NOTICED THAT THE ASS ESSEE HAS APPLIED FOR CONDONATION OF DELAY BEFORE LD CIT AND THE SAME WAS REJECTED BY LD CIT. THE SAID FACT HAS BEEN NOTICED BY THE AO IN THE ORI GINAL ASSESSMENT ORDER ALSO. HENCE THE COPY OF PETITION FILED BY TH E ASSESSEE ALONG WITH FORM NO.10 IS VERY MUCH AVAILABLE WITH THE AO DURIN G SECOND ROUND. 15. WITH REGARD TO THE DELAY IN FILING FORM NO .10, WE NOTICE THAT THE CO-ORDINATE BENCH HAS EXPRESSED FOLLOWING VIEW IN T HE CASE OF URSULINE FRANCISCAN CONGREGATION GENERALATE (ITA NO. 1039/BA NG/2017 DATED 23.08.2021:- 11. WE HEARD LD D.R ON THIS ISSUE AND PERUSED THE RECORD. WE NOTICE THAT THE HONBLE SUPREME COURT HAS OBSERVED AS UNDER IN THE CASE OF NAGPUR HOTEL OWNERS ASSOCIATION (SUPRA):- IT IS ABUNDANTLY CLEAR FROM THE WORDINGS OF SUB-SE CTION (2) OF SECTION 11 THAT IT IS MANDATORY FOR THE PERSON CLAIMING THE BENEFIT OF SECTION 11 TO INTIMATE TO THE ASSESSING AUTHORITY THE PARTICULARS REQUIRED, UNDER RULE 17 IN FORM NO.10 O F THE ACT. IF DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER DOES NOT HAVE THE NECESSARY INFORMATION, QUESTION O F EXCLUDING SUCH INCOME FROM ASSESSMENT DOES NOT ARISE AT ALL. AS A MATTER ITA NO.395 /BANG/2020. PAGE 8 OF 10 OF FACT, THIS BENEFIT OF EXCLUDING THIS PARTICULAR PART OF THE INCOME FROM THE NET OF TAXATION ARISES FROM SECTION 11 AND IS SUBJECTED TO THE CONDITIONS SPECIFIED THEREIN. THER EFORE, IT IS NECESSARY THAT THE ASSESSING AUTHORITY MUST HAVE TH IS INFORMATION AT THE TIME HE COMPLETES THE ASSESSMENT . IN THE ABSENCE OF ANY SUCH INFORMATION, IT WILL NOT BE POS SIBLE 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 AS SESSABLE INCOME OF THE ASSESSEE. THEREFORE, EVEN ASSUMING TH AT THERE IS NO VALID LIMITATION PRESCRIBED UNDER THE ACT AND TH E RULES EVEN THEN, IN OUR OPINION, IT IS REASONABLE TO PRESUME T HAT THE INTIMATION REQUIRED UNDER SECTION 11 HAS TO BE FURNISHED BEFORE THE ASSESSING AUTHORITY COMPLETES THE CONCER NED ASSESSMENT BECAUSE SUCH REQUIREMENT IS MANDATORY AN D WITHOUT THE PARTICULARS OF THIS INCOME THE ASSESSIN G AUTHORITY CANNOT ENTERTAIN THE CLAIM OF THE ASSESSEE UNDER SECTION 11 OF THE ACT, THEREFORE, COMPLIANCE OF THE REQUIREMENT O F THE ACT WILL HAVE TO BE ANY TIME BEFORE THE ASSESSMENT PROC EEDINGS. HENCE IT HAS BEEN HELD IN MANY CASES THAT THE FORM NO.10 COULD BE FILED BEFORE COMPLETION OF ASSESSMENT PROC EEDING. 12. HOWEVER, INCOME TAX ACT HAS BEEN AMENDED NO W AND WE NOTICE THAT THE TIME LIMIT FOR FURNISHING FORM NO.1 0 HAS BEEN PRESCRIBED IN SECTION 11(2)(C) OF THE ACT BY FINANC E ACT, 2015 W.E.F. 1.4.2016. HENCE THE AMENDMENT SHALL TAKE EF FECT FROM AY 2016-17 ONLY. IT IS PERTINENT TO NOTE THAT RUL E 17(2) OF THE INCOME TAX RULES AS AMENDED FROM 1.4.2016 AND ALSO EARLIER RULE 17 PRESCRIBED THAT THE FORM NO.10 SHALL BE FUR NISHED BEFORE THE EXPIRY OF TIME LIMIT U/S 139(1) FOR FURN ISHING RETURN OF INCOME. WE NOTICE THAT THE CHANDIGARH BENCH OF TRIBUNAL HAS HELD IN THE CASE OF INFRASTRUCTURE DEVELOPMENT FUND VS DCIT (ITA NO.220/CHD/2020 DATED 24.08.2020) THAT TH E AMENDMENT HAS BEEN BROUGHT INTO THE INCOME TAX ACT WITH EFFECT FROM 1.4.2016 AND HENCE IT WILL APPLY ONLY F ROM AY 2016-17. THE TRIBUNAL DID NOT GIVE MUCH CREDENCE T O THE TIME LIMIT PRESCRIBED IN THE INCOME TAX RULES EARLIER, S INCE THERE WAS NO CORRESPONDING CONDITION PRESCRIBED IN THE SU BSTANTIVE LAW. ITA NO.395 /BANG/2020. PAGE 9 OF 10 13. THE YEAR UNDER CONSIDERATION BEING ASSESSMEN T YEAR 2012-13, THE AMENDED PROVISIONS WILL NOT BE APPLICA BLE TO THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THE AO HAS ONLY DOUBTED THE DATE OF FORM NO.10, BUT THE UNDISPUTED FACT REMAINS THAT THE FORM NO.10 AND RESOLUTION HAVE BEE N FILED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDI NG ITSELF, I.E., BEFORE COMPLETION OF THE ASSESSMENT. 14. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT THE AO SHOULD HAVE ENTERTAINED FORM NO.10 AND RESOLUTION F ILED BY THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER PASS ED BY LD CIT(A) ON THIS ISSUE AND RESTORE THIS ISSUE TO THE FILE OF THE A.O. WITH A DIRECTION TO CONSIDER FORM NO.10 AND RESOLUT ION FILED BY THE ASSESSEE AND EXAMINE THE CLAIM OF THE ASSESSEE U/S 11(2) OF THE ACT IN ACCORDANCE WITH LAW. 16. THE YEAR UNDER CONSIDERATION IN THIS APPEAL I S AY 2005-06, I.E, PRIOR TO AY 2016-17. ACCORDINGLY, WE ARE OF THE VI EW THAT THE FORM NO.10 ALREADY FILED BY THE ASSESSEE SHOULD HAVE BEE N CONSIDERED BY THE AO FOR THE DETAILED REASONS DISCUSSED ABOVE. ACCOR DINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIR ECT THE AO TO CONSIDER FORM NO.10 FILED BY THE ASSESSEE AND EXAMINE THE CL AIM MADE U/S 11(2) IN ACCORDANCE WITH LAW. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S TREATED AS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) VICE PRESIDENT (B.R. BASKARAN) ACCOUNTANT MEMEBR BANGALORE, DATED : 22.09.2021. /B. VENUGOPAL/ ITA NO.395 /BANG/2020. PAGE 10 OF 10 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.