Maharaja Ranjit Singh War Museum Society, Ludhiana V. ITO, Ludhiana

ITA 964/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8365 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 06-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: BRIJ BHUSHAN SHARMA
• Keywords: Charitable institution; Opportunity of being heard; Condonation of delay
• Section: 12; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 964/CHD/2016 ASSESSMENT YEAR: 2010-11 MAHARAJA RANJIT SINGH VS THE ITO, WAR MUSEUM SOCIETY, WARD-II(4), VILLAGE BHATTIAN BHET, LUDHIANA. G.T.ROAD, LUDHIANA. PAN: AAATM5624L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI BRIJ BHUSHAN SH ARMA RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 03.01.2017 DATE OF PRONOUNCEMENT : 11.01.2017 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-4 LUDHIANA DATED 01.06.2016 FOR ASSESSMENT YEAR 2010-11 ON THE FOLLO WING GROUND : THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FA CTS OF THE CASE BY UPHOLDING THE ORDER OF LD. A.O. & DISALLOWING THE DEDUCTION CLAIMED UNDER SECTION 11 TO THE EXTENT OF RS. 20,86,406/- FOR NON FILING OF FOR M NO. 10 UNDER SECTION 11(2) I.E. INTIMATION TO A.O. FOR ACCUMULATION OF FUNDS OF MORE THAN 15% OF TOTAL RECEIPTS. 2 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME DECLARING NIL INCOME. THE ASSESSEE HAS EARNED INCOME FROM BANK INTEREST AND SALES OF TICKE TS DURING THE PERIOD UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER OBSERVED FROM THE PERUSAL OF THE INCOME & EXPENDITU RE STATEMENT THAT ASSESSEE TRUST NEITHER APPLIED 85% O F THE INCOME FOR CHARITABLE PURPOSES NOR ACCUMULATED OR S ET APART APPLICATION TOWARDS CHARITABLE AND RELIGIOUS PURPOSES AS REQUIRED UNDER SECTION 11 AND 12 OF THE INCOME T AX ACT. FORM NO. 10 WAS ALSO NOT FILED AS REQUIRED UNDER SE CTION 11(2) OF THE INCOME TAX ACT. THE SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE THAT SINCE FORM NO. 10 AS RE QUIRED UNDER SECTION 11(2) HAS NOT BEEN FILED, WHY THE ENT IRE INCOME OF RS. 28,32,395/- MAY NOT BE TAXED. THE AS SESSEE SUBMITTED THAT OUT OF THE TOTAL RECEIPTS OF RS. 49, 73,260/-, A SUM OF RS. 21,40,865/- HAD BEEN APPLIED FOR CHARITA BLE PURPOSES AND BALANCE AMOUNT HAD BEEN ACCUMULATED AN D SET APART FOR APPLICATION TOWARDS CHARITABLE AND RE LIGIOUS PURPOSES IN INDIA AS REQUIRED UNDER SECTION 11 AND 12 OF THE INCOME TAX ACT. FURTHER, THE ASSESSEE HAD INVE STED ALL ITS ACCUMULATED RESOURCES IN FDRS AND SB ACCOUN T WITH HDFC BANK LTD. THE ASSESSEE SUBMITTED THAT FO RM NO. 10 COULD NOT BE FILED DUE TO UNAVOIDABLE CIRCUMSTANCES. SAME MAY BE CONDONED. THE ASSESSEE RELIED UPON BOARD CIRCULAR DATED 03.06.1980 IN THIS REGARD. THE ASSESSING OFFICER, HOWEVER, WAS NOT SA TISFIED 3 WITH THE REPLY OF THE ASSESSEE BECAUSE NO FORM NO. 10 WAS FILED IN PRESCRIBED FORM, THEREFORE, INCOME OF RS. 20,86,406/- WAS TAXED TREATING THE ASSESSEE TRUST A S AOP. THE LD. CIT(APPEALS) ON THE SAME REASONING, CONFIRMED THE ADDITION. 3. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES. THE REPLY OF THE ASSESSEE DATED 26.12.2012 FILED BE FORE ASSESSING OFFICER IS FILED IN THE PAPER BOOK IN WHI CH ASSESSEE HAS EXPLAINED THAT SUM OF RS. 21,40,865/- HAVE BEEN APPLIED FOR CHARITABLE PURPOSE AND BALANCE AMO UNT HAS BEEN ACCUMULATED AND SET APART FOR APPLICATION TOWARDS CHARITABLE AND RELIGIOUS PURPOSES. THE ASS ESSEE ALSO PLEADED THAT DELAY IN FILING FORM NO. 10 MAY B E CONDONED. HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS MOTI RAM GOPI CHAND CHARITABLE TRUST 360 ITR 598 HELD AS UNDER : HELD , DISMISSING THE APPEAL, THAT THE BENEFIT OF THE EXEMPTION WAS ON SETTING APART OF THE 85 PER CENT, AM OUNT TO BE SPENT IN THE NEXT YEAR BEFORE THE ASSESSMENT WAS COMPLETED AND NOT ON THE FURNISHING OF INFORMATION O N THE PRESCRIBED FORM. THERE WAS SUFFICIENT MATERIAL BEFORE THE ASSESSING OFFICER BOTH IN THE SHAPE OF THE INFORMAT ION FURNISHED WITHIN THE PRESCRIBED PERIOD AND THE PROO F OF NOT ONLY SETTING APART 85 PER CENT, OF THE AMOUNT TO BE S PENT IN THE NEXT YEAR BUT ALSO THE EXPENDITURE OF THAT AMOUN T IN THE NEXT YEAR. THE INSISTENCE ON FURNISHING OF INFORMATI ON IN FORM 10 AS A CONDITION PRECEDENT, WAS INSISTENCE ON THE F ORM AND NOT THE SUBSTANCE OF THE PROVISIONS OF THE ACT . 4 4. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT IN ASSESSMENT YEAR 2012-13, THE LD. CIT(APPEALS)-4 LUDHIANA VIDE ORDER DATED 24.08.2016 ON THE SAME MATTER HAS ALLOWED THE CLAIM OF THE ASSESSEE, COPY OF THE ORDER IS PLACED ON RECORD. 5. CONSIDERING THE ABOVE FACTS, IT IS CLEAR THAT SUFFICIENT MATERIAL WAS FILED BEFORE ASSESSING OFFI CER AT THE ASSESSMENT STAGE TO EXPLAIN THAT BALANCE AMOUNT HAS BEEN ACCUMULATED AND SET APART FOR APPLICATION TOWA RDS CHARITABLE AND RELIGIOUS PURPOSES AS REQUIRED UNDER SECTION 11 AND 12 OF THE ACT. IN ASSESSMENT YEAR 2 012- 13, THE ASSESSEE FILED FORM NO. 10 WITH REVISED FO RM LATER ON. THEREFORE, WHETHER THE MATERIAL BEFORE ASSESSING OFFICER WAS SUFFICIENT AS REQUIRED ON FIL ING FORM NO. 10 AND WHETHER ASSESSEE IS ENTITLED FOR CONDONATION OF DELAY SHALL HAVE TO BE CONSIDERED BY THE AUTHORITIES BELOW, IN THE LIGHT OF THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS MOTI RAM GOPI CHAND CHARITABLE TRUST (SUPRA). IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE MATTER IN ISSUE TO THE FILE OF ASSESSIN G OFFICER WITH DIRECTION TO RE-DECIDE THIS ISSUE IN ACCORDANC E WITH LAW IN THE LIGHT OF DECISION OF HON'BLE ALLAHABAD H IGH COURT IN THE CASE OF CIT VS MOTI RAM GOPI CHAND CHARITABLE TRUST (SUPRA) AND ORDER OF THE LD. CIT(A PPEALS) IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 201 2-13. 5 THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICI ENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 11 TH JANUARY,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH