ADIT (E) II(1), MUMBAI V. INSTITUTE OF ACTUARIES OF INDIA, MUMBAI

ITA 7387/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9136 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2008-2009
• Appeal Filed On: 03-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A H DALAL
• Section: 143(3); 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (J.M.) AND SHRI B. RAMAKOTAIAH (A.M.) ITA NO. 7387/MUM /2011 ASSESSMENT YEAR : 2008-09 ASSTT. DIRECTOR OF INCOME-TAX (EXEMPTION) II(1), ROOM NO. 507, PIRAMAL CHAMBERS,, LALBAUG, PAREL, MUMBAI 400 012. VS. M/S INSTITUTE OF ACTUARIES OF INDIA, 302, INDIAN GLOBE CHAMBER, 142, FORT STREET, OFF D.N. ROAD, FORT, MUMBAI 400 001. PAN AAATA0145Q (APPELLANT) (RESPONDENT) REVENUE BY : SHRI MANOJ KUMAR ASSESSEE BY : SHRI A.H. DALAL DATE OF HEARING 12-12-2012 DATE OF PRONOUNCEMENT 14.12.2012 O R D E R PER DINESH KUMAR AGARWAL, J.M. THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED A GAINST THE ORDER DATED 12-8-2011 PASSED BY THE LD. CIT(A)- I, MUMBAI FOR THE ASSESSMENT YEAR 2008-09. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE, ACTUARIES SOCIETY OF INDIA FILED ITS RETURN SHOWING NIL INC OME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. OBSERVED THAT THE TRUST HAS NOT CLAIMED ANY EXEMPTION U/S 11 OF THE INCOME TAX ACT, 1961 (THE ACT). A LETTER TO THIS EFFECT WAS SENT TO THE TRUST ASKING THE ASSESSEE TO FURNISH ITA NO. 7387/MUM/2011 2 THE ORDER OF APPROVAL IN THIS CASE U/S 10(23A) OF T HE ACT AND THE BASIS ON WHICH THE EXEMPTION FROM TAX HAS BEEN CLAIMED. IT W AS SUBMITTED THAT THE ASSESSEE TRUST HAS APPLIED FOR THE GRANT OF EXE MPTION U/S 10(23A) OF THE ACT AND NECESSARY PAPERS IN THIS REGARD HAS BEE N FILED TO THE CBDT, NEW DELHI AND IN THE PROCESS OF OBTAINING THE EXEMP TION U/S 10(23A) OF THE ACT. IN THE COURSE OF THE PROCEEDINGS, THE ASS ESSEE HAS FILED A LETTER DTD. 21-12-2010 AND HAS ALTERNATIVELY CLAIMED EXEMP TION U/S 11 OF THE ACT SINCE THE CONDITIONS LAID DOWN ARE FULFILLED. THE ASSESSEE HAS ALSO FILED COPY OF THE REGISTRATION U/S 12A OF THE ACT G RANTED BY THE OFFICE OF THE COMMISSIONER OF INCOME-TAX, MUMBAI DTD. 07-03-1 984 GRANTING REGISTRATION W.E.F. 2-12-1983 AND FORM NO. 10B. THE A.O. AFTER CONSIDERING THE SAME OBSERVED THAT FORM NO. 10 IS R EQUIRED TO BE FILED ON OR BEFORE THE DUE DATE OF FILING OF RETURN AND SINC E THE ASSESSEE HAS FAILED TO FILE THE SAME WITHIN THE TIME, HE DID NOT ENTERT AIN THE CLAIM OF ACCUMULATION U/S 11(2) OF THE ACT AND ACCORDINGLY C OMPUTED THE INCOME VIDE ORDER DTD. 28-12-2010 PASSED U/S 143(3) OF THE ACT AS UNDER:- INCOME AS PER I & E A/C 3,45,10,267 LESS: 15% ACCUMULATION PERMISSIBLE U/S 11(1)(A) OF THE ACT. 51,76,540 LESS: EXPENSES ON THE OBJECTS 2,17,96,228 NET SURPLUS 75,37,499 ON APPEAL, THE LD. CIT(A) FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION (2 001) 247 ITR ITA NO. 7387/MUM/2011 3 201(SC), HOWEVER, ALLOWED THE ACCUMULATION OF INCOM E AS CLAIMED BY THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL :- 1. WHETHER ON THE FACTS OF THE CASE, AND IN LAW, T HE LD. CIT(A) ERRED IN ALLOWING THE ASSESSEES CLAIM OF EXEMPTION U/S 1 0(23A) OF THE ACT. 2. WHETHER ON THE FACTS OF THE CASE, AND IN LAW, T HE LD. CIT(A) ERRED IN ALLOWING THE ASSESSEES CLAIM OF ACCUMULATION OF INCOME U/S 11(2) OF THE ACT. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS)-I, MUMBAI BE SET ASIDE AND THAT OF TH E ASSESSING OFFICER BE RESTORED 4. AT THE TIME OF HEARING THE LD. D.R. WHILE ADMITTING THAT GROUND NO. 1 DOES NOT ARISE FROM THE ORDER OF THE LD. CIT(A) S UBMITS THAT SINCE THE ASSESSEE HAS NOT FILED FORM NO. 10 ALONG WITH THE R ETURN OF INCOME, THE A.O. WAS JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE AND, THEREFORE, THE ORDER PASSED BY THE A.O. BE RESTORED. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE WHILE RELYING ON THE ORDER OF THE LD. CIT(A) ALSO RELIED ON THE D ECISION OF HONBLE SUPREME COURT IN NAGPUR HOTEL OWNERS ASSOCIATION (S UPRA). HE, THEREFORE, SUBMITS THAT THE ORDER PASSED BY THE LD. CIT(A) BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUT E THAT THE ASSESSEE HAS ITA NO. 7387/MUM/2011 4 FILED FORM NO. 10 ALONG WITH ITS LETTER DTD. 21-12- 2010 DURING THE COURSE OF ASSESSMENT PROCEEDING. HOWEVER, THE A.O. DECLIN ED TO ENTERTAIN THE CLAIM OF ACCUMULATION U/S 11(2) OF THE ACT ON THE G ROUND THAT FORM NO. 10 WAS NOT FILED BY THE ASSESSEE ON OR BEFORE THE D UE DATE OF FILING OF THE RETURN. ON APPEAL, THE LD. CIT(A) FOLLOWING THE DE CISION OF HONBLE SUPREME COURT IN NAGPUR HOTEL OWNERS ASSOCIATION (S UPRA), HOWEVER, ALLOWED THE ACCUMULATION OF INCOME AS CLAIMED BY TH E ASSESSEE. 7. IN CIT VS. NAGPUR HOTEL PWNERS ASSOCIATION (SUP RA) IT HAS BEEN HELD AS UNDER (HEADNOTE) :- IT IS ABUNDANTLY CLEAR FROM THE WORDING OF SUB-SEC TION (2) OF SECTION 11 OF THE INCOME-TAX ACT, 1961, THAT IT IS MANDATORY F OR THE PERSON CLAIMING THE BENEFIT OF SECTION 11 TO INTIMATE TO THE ASSESS ING AUTHORITY THE PARTICULARS REQUIRED, UNDER RULE 17 IN FORM NO. 10 OF THE INCOME-TAX RULES, 1962. IF DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DOES NOT HAVE THE NECESSARY INFORMATION, THE QUESTI ON OF EXCLUDING SUCH INCOME FROM ASSESSMENT DOES NOT ARISE AT ALL. AS A MATTER OF FACT, THIS BENEFIT OF EXCLUDING THIS PARTICULAR PART OF THE IN COME FROM THE NET OF TAXATION ARISES FROM SECTION 11 AND IS SUBJECT TO T HE CONDITIONS SPECIFIED THEREIN. THEREFORE, IT IS NECESSARY THAT THE ASSESS ING AUTHORITY MUST HAVE THIS INFORMATION AT THE TIME HE COMPLETES THE ASSES SMENT. IN THE ABSENCE OF ANY SUCH INFORMATION, IT WILL NOT BE POSSIBLE FO R THE ASSESSING AUTHORITY TO GIVE THE BENEFIT OF SUCH EXCLUSION. EV EN ASSUMING THAT THERE IS NO VALID LIMITATION PRESCRIBED UNDER THE ACT AND THE RULES, IT IS REASONABLE TO PRESUME THAT THE INTIMATION REQUIRED UNDER SECTION 11 HAS TO BE FURNISHED BEFORE THE ASSESSING AUTHORITY COMP LETES THE CONCERNED ASSESSMENT BECAUSE SUCH REQUIREMENT IS MANDATORY AN D WITHOUT THE PARTICULARS OF THIS INCOME THE ASSESSING AUTHORITY CANNOT ENTERTAIN THE CLAIM OF THE ASSESSEE UNDER SECTION 11 OF THE ACT, THEREFORE, COMPLIANCE WITH THE REQUIREMENT OF THE ACT WILL HAVE TO BE ANY TIME BEFORE THE ASSESSMENT PROCEEDINGS. FURTHER, ANY CLAIM FOR GIVI NG THE BENEFIT OF SECTION 11 ON THE BASIS OF INFORMATION SUPPLIED SUB SEQUENT TO THE COMPLETION OF ASSESSMENT WOULD MEAN THAT THE ASSESS MENT ORDER WILL HAVE TO BE REOPENED. THE ACT DOES NOT CONTEMPLATE S UCH REOPENING OF THE ASSESSMENT. ITA NO. 7387/MUM/2011 5 8. APPLYING THE RATIO OF THE ABOVE DECISION TO THE FACTS OF THE PRESENT CASE WE FIND THAT THE ASSESSEE HAS DULY FILED FORM NO. 10 DURING THE COURSE OF ASSESSMENT PROCEEDING I.E. BEFORE THE COM PLETION OF THE ASSESSMENT, THEREFORE, THE ASSESSEE HAS COMPLIED WI TH THE REQUIREMENT OF SECTION 11(2) OF THE ACT AND ACCORDINGLY THE ORD ER PASSED BY THE LD. CIT(A) IN ALLOWING THE CLAIM OF ACCUMULATION OF INC OME TO THE ASSESSEE DOES NOT CALL FOR ANY INTERFERENCE. THE GROUNDS TA KEN BY THE REVENUE ARE, THEREFORE, REJECTED. 9. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED ON 14.12.2012 SD/- ( B. RAMAKOTAIAH ) ACCOUNTANT MEMBER SD/- (DINESH KUMAR AGARWAL) JUDICIAL MEMBER MUMBAI, DATED : 14 TH DECEMBER, 2012 RK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (OSD)-I, C.R. 7, M UMBAI 4. CIT- CONCERNED, MUMBAI. 5. DEPARTMENTAL REPRESENTATIVE, BENCH I, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI