Appeal Details
Counselvise Citation
[2020] 111 COUNSELVISE.COM (IT) 0342 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 3 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
22-06-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Assessment Year
2012-2013
Appeal Filed On
28-02-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V.V A SUDEVAN, VIC E PRESIDENT (SMC) M . P NO. 1 62 /BANG/201 9 (IN ITA NO.2311 /BANG/201 8 ) ASSESSMENT YEAR : 20 1 2 - 1 3 DEVICHAND KESAJI SWETHAMBAR JAIN TRUST , SRI SHEETALNATH JAINTEMPLE, 237/2, 3 RD MAIN 4 TH CROSS, P.J.EXTENSION, DAVANAGERE - 577 002 THE A CIT, CIRCLE - 2(1)(1), BANGALORE APPELL ANT RESPONDENT A PPELLANT BY : AR FILED WRITTEN SUBMISSION RE SPONDENT BY : SHRI GANESH R GHALE, STANDING COUNSEL FOR D EPTT. DATE OF HEARING : 1 9 - 0 6 - 20 20 DATE OF PRONOUNCEMENT : O R D E R PER N.V.VASUDEVAN, VICE PRESIDENT : TH IS IS A MISCELLA NEOUS PETITION FILED BY THE A SS ES S EE U/S 254(2) OF THE I NCOME TAX ACT, 1961 (ACT) PRAYING FOR RECTIFICATION OF CERTAIN APPARENT ERROR IN THE ORDER OF THE TRIBUNAL. 2. THE A SSESS E E IS A CHA RITABLE TRU S T AND IT ENJOYS THE BENEFIT OF REGISTRATION U/S 12AA OF THE IT ACT, 196. THE A SSESSE E FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR : 201 2 - 13 DECLARING TOTAL INCOME OF NIL . THE GROSS RECEIPTS OF THE TRUST DURING THE PREVIOUS YEAR WA S A SUM OF RS.4,54,023 / - . THE A SSESSEE HAD APPLIED FUNDS FOR CHARITABLE PURPOSE TO THE TUNE OF RS.2,27,026/ - . THE BALANCE FUNDS AVAILABLE WITH THE A SSESSEE WA S RS.2,25,99 7 / - AS PER THE PROVISIONS OF SEC.11(2) OF THE IT ACT 1961 M. P NO. 1 62 / BANG/20 1 9 (IN ITA NO. 2311 (B)/201 8 PAGE 2 OF 5 AND THE A SSESSEE WAS ENTITLED A S A MATTER OF RIGHT TO CARRY FORWARD15% OF THE BALANCE AVAILABLE FUND NAMELY A SUM OF RS.67,957/ - FOR APPLICATION FOR CHARITABLE PURPOSE IN FUTURE . W ITH REGARD TO THE BAL A NCE SUM OF RS.1,58,043/ - (RS.2,25,997 - 67,954) , T HE A SSESSEE CAN CARRY FORWARD TH E SAME FOR FUTURE APPLICATION , BUT THE A SSESSEE WAS OBLIGED TO FILE FORM - 10 FOR CARRY FORWARD TO ENSURE THE AFORESAID SUM IS NOT BROUGHT TO TAX. ADMITTEDLY , A SSESSEE DID NOT FILE FORM - 10 ALONG WITH THE RETURN OF INCOME BUT FILED THE SAME BEFORE THE A O DURING THE ASSESSMENT PROCEEDINGS. THE A O REJECTED THE PLEA OF THE A SSESSEE FOR ACCUMULATION FOR THE REASON THAT FORM - 10 DID NOT SPECIFY THE PURPOSE FOR WHICH THE SURPLUS INCOME WHICH IS NOT SPENT WILL BE UTILIZED IN FUTURE. 3. BEFORE THE LD. CIT(A) THE A SSESSEE POINTED OUT THAT FORM - 10 WAS FILED BEFORE THE AO AND A COPY OF THE BOARD RESOLUTION WHEREIN THE PURPOSE OF ACCUMULATION W AS CLEARLY SET APART AND THEREFORE, THE AOS ACTION IN BRINGING TO TAX SURPLUS OF RS.1,58,043/ - WAS ERRO NEOUS. THE LD. CIT(A) AFTER NOTI CING ALL THE SUBMISSION OF THE A SSESSEE HOWEVER, PROCEEDED TO HO LD FORM - 10 DID NOT SPECIF Y THE PURPOSE FOR WHICH THE INCOME SOUGHT TO BE ACCUMULATED AND THE REFORE, THE ORDER OF THE A O WA S UPHELD . 4. ON F URTHER APPEAL BY THE ASSESSEE TO THE TRIBUNAL , THE TRIBUNAL CONCURRED WITH THE VIEW EXPRESSED BY THE LD.CIT(A) AND DISMISSED THE APPEAL BY OBSERVING AS FOLLOWS: 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. THEREF ORE, WE HAD NO M. P NO. 1 62 / BANG/20 1 9 (IN ITA NO. 2311 (B)/201 8 PAGE 3 OF 5 OTHER OPTION BUT TO PURSUE THE WRITTEN SUBMISSIONS FILED BY THE ASSES SE E. ALONG WITH THE WRITTEN SUBMISSIONS, COPY OF FORM - 10 WAS NOT FIL ED, THEREFORE, I AM BOUND TO AC CEPT THE OBSERVATIONS OF THE CIT(A) MAD E WITH REFE RENCE TO FORM - 10. IN FORM - 10, ASSESSEE IS REQUIRED TO SPECIFY THE PURPOSE FOR WHICH SURPLUS INCOME IS SET APART. IF HE F A ILS TO DO SO, HE CANNOT GET THE BENEFIT OF FILING FORM - 10. UNDER THESE CIRCUMSTANCES, I FIND NO INFIRMI TY IN THE ORDER OF THE CIT(A) . SIMILAR IS THE POS ITION IN OTHER APPEAL BEARING ITA N O .2312(BANG)/2018. THEREFORE, IN BOTH THE CASES, I UPHO L D THE ORDER OF THE CIT(A. 5 . IN THIS MISCELLANEOUS APPLICATION , THE ASS SESSEE HAS POINTED OUT THAT THE ORDER OF THE TRIBUNAL SUFFERS FROM AN ERROR APPARENT ON THE FACE OF THE RECORD , IN AS MUCH AS IN FO RM - 10 FILED BEFORE THE TRIBUNAL , THE PURPOSE HA D BEEN SET OUT CLEARLY IN THE BOARD RESOLUTION ANNEXED TO FORM - 10. IT WAS ALSO POINTED THAT THE OBSERVATION OF THE TRIBUNAL IN THE IMPUGNED ORDER THAT A COPY OF FORM - 10 WAS NOT FILED BEFORE THE TRIBUNAL IS INCORRECT, BECAUSE FORM - 10 HAD BEEN FILED AS PART OF THE APPEAL PAPERS ALONG WITH FORM - 36 APPEAL MEMORANDUM BEFORE THE TRIB U NAL. 6 . NONE APPEARED ON BEHALF O F THE A SSE S SEE BUT A WRITTEN SUBMISSION WAS FILED BEF ORE THE TRIBUNAL REITERATING THE S TAND AS CONTAINED IN THE MISCELLANEOUS APPLICATION WHICH ARE SET OUT IN THE EARLIER PARAGRAPH . 7 . THE LD. DR RELIED ON THE ORDER OF THE TRIBUNAL AND SUBMITTED THAT THERE IS NO MISTAKE APPARENT ON THE RECORD AND ALSO ON TH E FACE OF THE ORDER OF THE T R IBUNAL. M. P NO. 1 62 / BANG/20 1 9 (IN ITA NO. 2311 (B)/201 8 PAGE 4 OF 5 8 . I HAVE GIVEN CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. IT IS A FACT THAT ALONG WITH THE APPEAL MEMO FILED IN FORM - 36 THE A SSESSEE HAS ALSO ATTACHED A COPY OF FORM - 10 FILED BEFORE THE AO. IT IS THEREFORE, NOT CORRECT ON THE PART OF THE TRIBUNAL TO OBSERVE IN THE IMPUGNED ORDER THAT FORM - 10 WAS NOT FILED BEFORE THE TRIBUNAL. APART FROM THE ABOVE, I ALSO FIND THAT ALONG WITH FORM - 10 , A COPY OF THE BO A RD RESOLUTION OF THE A SSESSEE TRU ST HAS BEEN ENCLOSED IN WHICH THE PURPOSE FOR WHICH THE ACCUMULATION IS SOUGHT IS CLEARLY SET OUT AS FOR CONSTRUCTION OF TEMPLE, UPASHR A YA, DHARMASHALA AND OBJECT S O F THE TRUST . IT IS THUS , CLEAR TH A T THE ORDER OF THE TRIBUNAL SUF F ERS FROM AN ERROR APP ARENT ON THE FACE OF THE RECORD WHICH REQUIRES TO BE RECTIFIED. T HE SAME IS RECTIFIED AS FOLLOWS B Y DELETING THE EXISTING ORDER OF PARA GRAPHS 4 & 5 OF THE TRIBUNAL AND SUBSTITUTING THE FOLLOWING PARAGR APHS 4 & 5 . 4. IT IS CLEAR FROM THE PERUSAL OF THE RECORD THAT THE ASSESSEE HAS FILED FORM - 10 BE FORE THE A O AND CIT(A) ALONG WITH THE COPY OF THE BOARD RESOLUTION OF THE T RUSTEES MENTIONING THE PURPOSE FO R WHICH ACCUMULATION IS SOUGHT. IN THE GIVEN CIRCUMSTANCES, THE CLAIM OF ASSESSEE FOR ACCUMULATION OUGHT TO HAVE BEEN ACCEPTED BY THE REVENUE AUTHORITIES. EVEN IN THE ORDER OF ASSESSMENT THE AO HAS ACCEPTED THAT FORM - 10 WAS FILED BY THE ASSESSEE AND THE ONLY GRIEVANCE WAS THAT THE PUR POSE FOR ACCUMULATION WAS NOT MENTION ED. WHEN THE PURPOSE OF ACCUMULATION AS CONTAINED IN THE BOARD RESOLUTION ANNEXED ALONG WITH FORM - 10 WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) , HE ALSO OVERLOOKED THE SAME AND CONCURRED WITH THE FINDINGS OF THE A O. THUS, THE ORDER OF REVENUE AUTHORITIES CANNOT BE SUSTAINED AND THE ASESSEE IS THEREFORE, ENTITLED TO M. P NO. 1 62 / BANG/20 1 9 (IN ITA NO. 2311 (B)/201 8 PAGE 5 OF 5 THE BENEFIT O F ACCUMULATION. I HOLD AND DIRECT ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESS E E IS ALLOWED. 9 . I N THE RESULT, THE MP OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON TH E 09 - 01 - ( N.V.VASUDEVAN ) VICE PRESID E NT PLACE : BANGALORE DATED : AM* COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR , ITAT, BANGALORE
Other Referred Cases
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Laws Referred To
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Expert Summary
The assessee is a charitable trust and registered u/s 12AA. During the year under consideration, the assessee had gross receipts of Rs. 4,54,023/- and had applied funds to the tune of Rs. 2,27,026/-, leaving a balance of Rs. 2,25,997/-. The AO contended that as per section 11(2), the assessee is entitled to carry forward 15% of the gross receipts, i.e., Rs. 67,957/-, for application towards charitable purposes in future. To carry forward the balance amount of Rs. 1,58,043/- (Rs. 2,25,997 – Rs. 67,957), the assessee was required to file Form 10. The assessee failed to file Form 10 along with the return of income but had filed the same before the AO during assessment proceedings. However, the AO stated that since no purpose was specified in Form 10, the excess amount of Rs. 1,58,043/- shall be brought to tax. The same was upheld by the Tribunal, stating that the assessee failed to submit Form 10 along with the return. The assessee filed a miscellaneous application, wherein he contended that Form 10 along with the board resolution showing the purpose of accumulation of funds was filed before the AO, CIT(A), and the Tribunal. It was held that the assessee had filed Form 10 and the board resolution along with the appeal memo filed in Form 36. Therefore, the appeal of the assessee is allowed.
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