SRI BALAJI MANDIR SEWA TRUST,DELHI V. ASSESSMENT UNIT, NATIONAL E-ASSESSMENT CENTRE

ITA 352/DEL/2025

AI Insights

The case involves Sri Balaji Mandir Sewa Trust, which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, sustaining the action of the Assessing Officer (AO) in not granting the benefit of accumulation of Rs. 52,82,000 under section 11(2) of the Income Tax Act. The AO had disallowed the claim on the grounds that Form 10, necessary for claiming such accumulation, was filed belatedly. The CIT(A) upheld the AO's decision, leading to the Trust's appeal to the Tribunal. The Tribunal, referencing a decision by the Gujarat High Court and other precedents, found in favor of the Trust, noting that the Form 10 was filed before the completion of the assessment, thus entitling the Trust to the claimed benefits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314708 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Other Referred Cases: ACIT v/s. Stock Exchange Ahmedabad, Madhuchampaklal vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHYAM MANOHAR SINGH
• Keywords: Revised return
• Section: 11

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH “SMC’’ : NEW DELHI) BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT ITA No. 352/Del/2025 Asstt. Year : 2018-19 Sri Balaji Mandir Sewa Trust, vs. Assessment Unit, A-125, New Ashok Nagar, Delhi-96 National E-Assessment Centre, Delhi (PAN: AAMTS9672G) (Appellant) (Respondent) Appellant by : None Respondent by : Shri Shyam Manohar Singh, Sr. DR. Date of Hearing 07.05.2025 Date of Pronouncement 07.05.2025 ORDER This appeal by the assessee is emanating from the order of the NFAC, Delhi in Appeal No. ITBA/NFAC/S/250/2024-25/1596609(1) dated 26.12.2024. 2. The solitary issue raised by the assessee in the instant appeal is that the Ld. CIT(A) has erred in sustaining the action of the AO in not granting the benefit of accumulation of Rs. 52,82,000/- provided u/s 11(2) of the Act, on the reasoning that the Form 10 has not been filed within the due date prescribed. 3. In the present case, the assesee is a trust and claimed benefit of accumulation of Rs. 52,82,000/- u/s 11(2) of the Act which was disallowed by the AO on the reasoning that Form 10 which was mandatory to claim for such accumulation was filed belatedly. Thus, the AO added the sum of Rs. 52,82,000/- to the total income of the assessee. 2 | P a g e 4. Aggrieved assessee preferred an appeal to the Ld. CIT(A) who also confirmed the order of the AO. 5. Being aggrieved by the order of the Ld. CIT(A), the assesee is in appeal before the Tribunal. 6. None appeared on behalf of the assessee, despite issue of notice of hearing, hence, I am proceeding exparte qua the assessee, after hearing the Ld.DR and perusing the records and the case laws applicable in the instant case. 7. I note that it is the contention of the assessee that the Form 10 was filed before the completion of the assessment and therefore, the assesee cannot be denied for the benefit of accumulation provided under section 11(2) of the Act. 7.1 On the other hand, the Ld. DR relied upon the orders of the authorities below. 8. I have heard the Ld.DR and perused the records. Admittedly, the Form 10 was filed by the assessee claiming the benefit of accumulation of Rs.52,82,000/- u/s 11(2) of the Act after the due date of return filing but before the completion of the assessment. I further note that the Hon'ble High Court of Gujarat in the case of ACIT v/s. Stock Exchange Ahmedabad reported in 25 taxmann.com 469 has held that the assessee is entitled for the benefit of u/s 11 of the Act if the Form 10 is filed before the completion of the assessment. The relevant extract of the judgment is reproduced as under: 3 | P a g e “8. From the facts and contentions noted hereinabove, the sole question that arises for consideration is whether the Tribunal was justified in holding that the time limit prescribed for filing Form No.10 under rule 17 of the Rules read with section 11(2) of the Act is directory. In the present case, it is an admitted position that the assessee had filed Form No.10 as required under rule 17 of the Rules alongwith the revised returns filed in respect of all the assessment years under consideration. Thus, admittedly, the forms had been submitted before the assessment came to be completed. At this juncture reference may be made to the decision of the Supreme Court in the case of Nagpur Hotel Owners' Association (supra) on which reliance had been placed by the learned counsel for the revenue, wherein it has been held thus: \"6. It is abundantly clear from the wordings of sub-section (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 10 of the Act. If during the assessment proceedings the Assessing Officer does not have the necessary information, question 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 income from the net of taxation arises from Section 11 and is subject to the conditions specified therein. Therefore, it is necessary that the assessing authority must have this information at the time he completes the assessment. In the absence of any such information, it will not be possible for the assessing authority to give the assessee the benefit 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 assessable income of the assessee. Therefore, even assuming that there is no valid limitation prescribed under the Act and the Rules even then, in our opinion, it is reasonable to presume that the intimation required under Section 11 has to be furnished before the assessing authority completes the assessment concerned because such requirement is mandatory and 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 giving the benefit of Section 11 on the basis of information supplied subsequent to the completion of assessment would mean that the assessment order will have to be reopened. In our opinion, the Act does not contemplate such 4 | P a g e reopening of the assessment. In the case in hand it is evident from the records of the case that the respondent did not furnish the required information till after the assessments for the relevant years were completed. In the light of the above, we are of the opinion that the stand of the Revenue that the High Court erred in answering the first question in favour of the assessee is correct, and we reverse that finding and answer the said question in the negative and against the assessee.\" 9. Examining the facts of the present case in the light of the principles enunciated in the above decision, as noticed earlier, the assessee filed Form No. 10 under rule 17 of the Rules at the time of filing revised returns in respect of each of the assessment years under consideration. Thus, evidently, the requirements of section 11(2) of the Act had been complied with before the completion of the assessments. Therefore, while completing the assessments for the assessment years under consideration, the Assessing Officer had the necessary information in respect of the claim for exemption under section 11 of the Act made by the assessee before him. Thus, this is not a case where information in respect of the claim of the assessee for giving benefit of section 11 of the Act was furnished after the assessments for the relevant assessment years were completed. Under the circumstances, the present case is squarely covered by the aforesaid decision of the Supreme Court. The assessee was, therefore, entitled to the benefit of section 11 of the Act on the basis of the information supplied by it prior to framing of the assessment orders. 8.1 The aforesaid view has also been followed by the ITAT, SMC-Ahmedabad Bench in the case of Madhuchampaklal vs. ITO in ITA No. 575/Ahd/2023 (AY 2016-17) vide order dated 03.04.2024 wherein, exactly the similar issue was decided in favour of the assessee. 8.2 In view of the aforesaid discussions and respectfully following the precedents as above, I hold that the assessee cannot be denied the benefit of accumulation of Rs. 52,82,000/- under section 11(2) of the Act, merely on the reasoning that Form 10 was filed by the assessee belatedly in the given facts and circumstances. Hence, I 5 | P a g e set- aside the order of the Ld. CIT(A) and direct the AO to delete the addition made by him on this count. Thus, the ground of appeal of the assessee is allowed. 9. In the result, the appeal filed by the assessee is allowed. Order pronounced in the Open Court on 07.05.2025. Sd/- (MAHAVIR SINGH) VICE PRESIDENT SRBhatnagar Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Bench "