VIDHYA PRACHARINI SABHA,UDAIPUR V. ACIT EXEMPTION CIRCLE, JODHPUR

ITA 19/JODH/2024

AI Insights

The case involves Vidhya Pracharini Sabha B N Sansthan, a charitable trust, which appealed against the decision of the Commissioner of Income Tax (Appeals) that upheld the disallowance of a set apart claim of Rs. 5,00,00,000 for the assessment year 2016-17. The primary issues were the genuineness of the resolution supporting the set apart claim and the belated filing of Form 10. The Tribunal noted that the resolution was part of the approved budget and the funds were invested as required. The Tribunal also considered the technical glitches and the first year of mandatory electronic filing of Form 10, leading to the decision to allow the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471464 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-10-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 09-01-2024
• Other Referred Cases: Collector, land Acquisition vs. Mst. Katiji and Others, Nagpur Hotel Owners Association vs. CIT, Principal Commissioner of Income Tax- III, Bangalore vs M/s Wipro Limited, Rajasthan Medical Relief Society Vs ITO, DCIT vs. State Institute of Health & Family Welfare, HIMALAYAN BUDDHIST CULTURAL ASSOCIATION vs. ASSISTANT COMMISSIONER OF INCOME TAX, THE ASSOCIATED CHAMBERS OF COMMERCE AND INDUSTRY OF INDIA vs. DEPUTY COMMISSIONER OF INCOME TAX & ORS., JOINT COMMISSIONER OF INCOME TAX vs. GUJARAT ENERGY DEVELOPMENT AGENCY, DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION) vs. STATE INSTITUTE OF HEALTH & FAMILY WELFARE, BAR COUNCIL OF INDIA vs. COMMISSIONER OF INCOME TAX (EXEMPTION), INCOME TAX OFFICER(EXEMPTION) vs. RAMJI MANDIR RELIGIOUS & CHARITABLE TRUST
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH OJHA
• Assessee Lawyers: YOGESH POKHARNA
• Keywords: Condonation of delay; Set aside; Revenue expenditure; Reasonable cause; Question of law; Capital expenditure; Competent authority; Charitable institution; Benefit of exemption; Maximum Marginal Rate
• Section: 143(3); 142(1); 143(2); 250; 234E; 200A; 143(1); 64; 11; 12AA; 139(1); 22; 12A; 139; 133A; 119(2)(b); 10B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 Vidhya Pracharini Sabha B N Sansthan, V. P. Sabha, Old Station Road, Udaipur [PAN: AAATV 4086 F ] (Appellant) Vs. ACIT Exemption, Circle, Jodhpur (Respondent) Appellant by Sh. Yogesh Pokharna, CA Respondent by Sh. Rajesh Ojha, CIT Date of Hearing 22.10.2024 Date of Pronouncement 12.11.2024 ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM By way this appeal the assessee challenges the finding of the learned Commissioner of Income Tax (Appeals)-4, Jaipur [for short ld. CIT(A) ] recorded in the order dated 09/11/2023 for assessment year 2016-17. That order of the ld. CIT(A) arise because the assessee challenged before him the order dated 25.12.2018 passed under section 143(3) of the Income Tax Act, [for short Act] by ACIT Exemption Circle, Jodhpur [ for short AO]. I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 2 2. At the outset of hearing, the Bench observed that there is delay of 02 days in filing of the appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay with following prayers: 11/01/2024 We are in receipt of your email dated 10th Jan 2024 for aforesaid appellant in which we are directed to remove following defects: 1. Appeal is barred by 2 days, 2. Order u/s 200A (234E) is not filed. In this respect we would like to submit as under: 1. Appeal is barred by 2 days Please find enclosed herewith separate application requesting for condonation of delay in Triplicate with this letter. 2. Non Submission of Order u/s 200A (234E) With respect to above, we would like to submit that present appeal is filed against the order passed under section 143(3) of the Income tax Act -1961. It is respectfully submitted in this condition order u/s 200A with respect to Section 234E is not required to be attached.” Dated 11/01/2024 On behalf of our aforesaid appellant we would like to submit asunder: 1. It is respectfully submitted that order u/s 250 of the IT Act 1961 was passed on 8th Nov 2023. 2. It is respectfully submitted on behalf of aforesaid appellant appeal is dispatched on 4th Jan 2024 by speed post however as per your office recorded same is delivered on 9th Jan 2024 , resulting in delay of 2 days beyond the due date. 3. It is respectfully submitted due to non availability of Signatory in last few days, appeal could not be dispatched couple of days ahead. 4. It is respectfully submitted that delay caused unintentional and due to extra days at least 3 days taken by postal department it took 5 days to reach your, which in normal should have been delivered on or before 6th Jan 2024. Statutory holiday of 6th & 7th may be one of reason for delayed delivery of the appeal. I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 3 In view of above , we request your honour to kindly condone the delay of 2 days in filing of appeal as the same is caused due to reasons beyond control of the appellant. 3. During the course of hearing, the ld. DR not objected to assessee’s application for condonation of delay and the facts stated therein. He prayed that Court may decide the issue as deem fit in the interest of justice as delay is of two days only. 4. We have heard the contention of the parties and perused the materials available on record. The prayer by the assessee for condonation of delay of two days has merit and we concur with the submission of the assessee has the assessee has sufficient cause for delay of 2 days. Thus the delay of two days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause. 5. In this appeal, the assessee has raised following grounds: - “1. That Learned CIT A has wrongly confirmed disallowance of set apart claim of Rs. 5,00,00,000/- without considering full facts and circumstances of the case. The confirmation of disallowance of set aside of claim is without following provisions of law and considering full facts and circumstances of the case. Hence the disallowance of set apart claim is bad in law and be deleted. 2. The Appellant reserves his right to add or amend grounds of appeal.” I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 4 6. Succinctly, the fact as culled out from the records is that the assessee filed its return of income for the A.Y. 2016-17 electronically on 20/02/2018 in ITR-7 declaring total income Rs. Nil. The case was selected for complete scrutiny through CASS and notice u/s 143(2) dated 20/08/2018 was issued, which was duly served upon the assessee. Thereafter, notice u/s 142(1) dated 22/08/2018 enclosing therewith questionnaire was issued, fixing the case for hearing on 27/08/2018 with a direction to file its reply through e-filing portal in order to complete the case through e-proceedings in compliance of board guideline dated 12/03/2018. In response to this notice, assessee has submitted its reply through ITBA, which has been gone through by the ld. AO. The assessee is registered with registrar of societies, Rajasthan, Jaipur vide registration No. 35/50-51 dated 30/08/1950 under the Registration of Societies Act, 1958. The society is also registered under section 12AA of the I.T. Act 1961 by the CIT, Udaipur vide order No. 989 dated 19/03/2003. The trust is engaged in running educational institutions at Udaipur. The assessee society has filed its return of income u/s 139(4A) of the I.T. Act claiming exemption u/s 11 of the IT. Act and accordingly filed its audit report in form 10B. As per return of income the assessee, during the year under consideration was in receipt I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 5 of Rs. 29,23,23,052/- out of which Rs. 20,14,75,028/- was applied as revenue expenditure and Rs. 1,18,53,398/- as capital expenditure. After application it also claimed Rs. 5,00,00,000/- exempted u/s 11(2) of the I.T. Act leaving a surplus of Rs. 2,89,94,626/- claiming the same in accordance with section 11(1)(a) of the IT. Act. On perusal of records available with ld. AO, it has been noticed that the assessee had deposited Rs. 3.14 Cr. in cash during the demonetization period (9th November to 30th December, 2016) in various bank accounts. The assessee had also not filed its return of income for A.Y. 2016-17 and 2017-18 till 15/02/2018. Accordingly, it was proposed to conduct a survey u/s 133A of the 1.T. Act, 1961 in this case to verify the cash deposit. Therefore, on being authorized by the Competent Authority, a survey u/s 133A of the I.T. Act, 1961 conducted on 16/02/2018. The assessee during the survey operation was required to explain the source of deposits of Rs. 3.14 Crore during the demonetization period. It was submitted that the same was deposited by students of various courses run by the institutions directly in bank accounts as fees for the year. The assessee, the Secretary of institute, Shri Mahendra Singh Rathore, produced copy of bank account reflecting name of students who has deposited corresponding fees and submitted that in that financial year, an amount of Rs. 2,90,08,034/- was deposited in various bank accounts I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 6 pertaining to the fees of the students and the same could be verified with relevant books and documents. In this connection, during survey operation the assessee was required to produce details viz audit report of corresponding period i.e. for F.Y. 2015-16 for comparison of such deposits. 6.1 The assessee in its return of income as well as in Form 10B filed on 20/02/2018 has claimed Rs. 5,00,00,000/- set apart during the year and claimed exempted u/s 11(2) of the Act. For making a claim u/s 11(2) of the Act the assessee is required to comply with Rule 17 of income tax Rule. Accordingly, vide note sheet entry dated 28/11/2018, the A/R of the assessee was asked to furnish copy of requisite Form 10 along with copy of resolution against claim of Rs. 5,00,00,000/- as set apart and claimed exempted u/s 11(2). In compliance to the show cause the assessee furnished copy of Form 10 along with copy of acknowledgment depicting that it was filed on 22/02/2018. It also produces true copy of resolution duly singed by the Secretary, Vidhya Pracharini Sabha wherein it was resolved that a sum of Rs. 5,00,00,000/- be set apart from currents years (2015-16) receipt for sponsoring BN University, application for which is in advance stage with Government of Rajasthan for a period of 5 Years and the said amount shall be kept in fixed deposit form with banks. This furnishing of Form 10 in order to claim an amount I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 7 of Rs. 5,00,00,000/- exempted u/s 11(2) of the Act was not acceptable to the ld. AO, Firstly, from the true copy of resolution furnished by the assessee it is evident that it was resolved on the 5th March 2016 to set apart Rs. 5,00,00,000/-. Further, it has briefly been discussed in foregoing paras that the assessee failed to file its return of income till dated of survey i.e. 16/02/2018, it could file its return of income only on 20/02/2018. Post survey on 21/02/2018 on being asked while recording statement on oath, if it has brought the copy of Form 10B (audit report) on the basis of which return of income was filed on 20/02/2018 as the same was not provided during the survey operation. From the reply of the trustee it is conspicuous that till date of taking statement on oath i.e. upto 21/02/2018 it was not having its consolidated audit report with it even though it had filed its return of income on 20/02/2018. In absence of consolidated audit report how it is possible to ascertain on 05/03/2016 as to what amount was left with the society to apply which it had to set apart in order to avail benefit of section 11(2) of the IT. Act. It is only an astrologer or magician who can easily know before getting accounts of Institution audited as to what amount is to set apart by which it would be stand for short application of income after completion of consolidation of account. Thus furnishing of form 10 after survey operation and even after filing the return of income is nothing but just an afterthought of the I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 8 assessee to avoid its liability for taxation, if any. The provision laid down in section 11(2) is very much explicit regarding claim of benefit of set apart. There are certain parameters for availing claim of section 11(2) viz form 10 has to be submitted and the same should have to be furnished before expiry of the time allowed under section 139(1), for furnishing the return of income. Hence, in view of facts discussed above the form 10 furnished by the assessee was not acceptable in the opinion of the ld. AO and the claim u/s 11(2) for Rs. 5,00,00,000/- was denied. Secondly, form 10 in order to claim an amount of Rs. 5,00,00,000/- exempted u/s 11(2) of the Act is also not acceptable on the ground of resolution passed by the trustee of the institution. Before making further discussion on the issue it is worth to produce part of the statement of the secretary Dr. Mahendra Singh Rathore S/o Lt. Shri Govind Singh Je Rathore taken on oath: I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 9 I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 10 On perusal of true copy of resolution furnished during the course of assessment proceedings, it is noticed that purpose of setting apart of amount of Rs. 5,00,00,000/- has been declared for sponsoring B.N University/setting up university. Further, during the course of survey, copy of the register meant for passing resolution, was obtained from the survey point. Further, during the post survey statement the assessee itself asserted and produced similar copy of that very register wherein resolution dated 05/03/2018 enumerated. From perusal of minutes of meeting it was noticed that in the minutes of meeting there are only I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 11 three issues pertaining to Hostel has been discussed. In the minutes resolutions have been made for installation of solar power plant for hostel with estimated budget of Rs. 3 Cr., setting up of carrier counselling cell with estimated budget of Rs. 22 Cr. and to include students of College in Fateh Smarak Scholarship. In the minutes neither any discussion has been made regarding setting apart of Rs. 5,00,00,000/- which was left to be applied during the year under consideration nor any discussion for setting up of university was made for which the assessee is claiming to utilize the set apart fund. Thus it is crystal clear that there is no relation for a little bit between the copy of minutes of the meeting dated 05/03/2018 furnished during the survey operation and true copy of resolution dated 05/03/2018 furnished during the assessment producing. Hence, true copy of resolution dated 05/03/2018 furnished during the assessment producing is nothing but a fabricated piece of paper which the trustee has tendered duly singed to misguide the revenue. Actually, there no such resolution was passed wherein it was decided to set apart Rs. 5,00,00,000/- for the purpose of setting up university out of amount which was left to be applied during the year under consideration. Thus, there is nothing left to establish that the form 10 submitted by the assessee claiming exemption over Rs. 5,00,00,000/- u/s 11(2) of the 1.T. Act is merely based on a fabricated I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 12 paper and on the basis of the same form 10 furnished by the assessee and claim made therein is not allowable. Apart from the facts mentioned in the aforesaid paras, here again contention of the assessee is not acceptable as in the Act, it has been stated that Form 10 has to be submitted in prescribed manner as laid down in Rule 17 of the Income- tax Rules, 1962 and has to be submitted within due date u/s 139(1). Later, the CBDT circular no. 273 dated 03-06-1980 allows filing of Form 10 before the assessing officer, even after the expiry of the due date u/s 139(1) provided the delay is condoned by the Commissioner of Income Tax. However, assessee in its reply merely requested the undersigned to condone the dealy for filing form 10 but has not furnished any letter for condonation of delay. Further, it simply relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs. Nagpur Hotel Owners Association. As is evident that the Form 10 submitted much after due date along with fabricated resolutions is nothing but an attempt by the assessee to claim a fund as set apart u/s 11(2) to avoid taxation and the same is absolutely not tenable under the law. In view of all above the claim of set apart of Rs. 5,00,00,000/- made during the assessment proceedings of the Act was rejected and ordered to charge to tax at MMR of income tax. I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 13 7. Aggrieved from the above order of Assessing Officer, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised by the assessee in first appeal, the relevant finding of the ld. CIT(A) is reiterated here in below:- “4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- 4.3 As noted in the assessment order the appellant assessee society has filed its return of meme u/s 139(4A) of the 1.T. Act claiming exemption u/s 11 of the I.T. Act and accordingly filed its audit report in form 10B. As per return of income the assessee, during the year under consideration it was in receipt of Rs. 29,23,23,052/- out of which Rs.14,75,028/ was applied as revenue expenditure and Rs.1,18,53,398/-as capital expenditure. After application it also claimed Rs.5,00,00,000/- exempted u/s of the IT Act leaving a surplus of Rs.2,89,94,626/- claiming the same in accordance with section 11(1)(a) of the I.T. Act. A survey u/s 133A of the IT. Act, 1961 conducted on 16/02/2018 in case of the appellant. The assessee had not filed its returns of income for two years i.e. for A.Y. 2016-17 and A.Y. 2017-18 till the date of the survey. On being asked the reason for the same, it was reported as due to non consolidation of audit report/financial accounts. During the survey proceedings, the appellant assessee submitted individual institution wise audit report and further submitted that after consolidation, return would be filed. The assessee filed its return for AY 2016-17 only on 20.02.2018 and produced the copy of the same to the ld. AO on 21.02.2018. The appellant in its return of income as well as in Form 10B filed on 20/02/2018 has claimed Rs. 5,00,00,000/- set apart during the year and claimed exemption u/s11(2) of the 1.T. Act. This issue was examined by the AO and in the assessment order the benefit of set-apart was denied to the appellant by inter alia observing that the decision to set apart the funds was an after- thought and the resolution dated 05.03.2016 whereby the set-apart was decided was not genuine. 4.4 Regarding the issue, the Id. AO has observed in the assessment order that from she true copy of resolution furnished by the assessee it is evident that it was resolved on the 5th March 2016 to set apart Rs. 5,00,00,000 (Page 4 of the assessment order). The ld AO has also observed on page 6 of assessment order that in absence of consolidated audit report how it is possible to ascertain on 05/03/2016 as to what amount was left with the society to apply which it had to set apart in order to avail benefit of section 11(2) of the IT. Act. He has further observed that thus furnishing Term 10 after survey operation and even after filing the return of income is nothing but Just an afterthought of the assessee to avoid its liability for taxation , it any. (Page the assessment order). The ld. AO I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 14 has extracted scanned copy of statement of secretary Dr. Mahendra Singh Rathore S/o 14. Shri Govind Singh Ji Rathore on page 7 of assessment order. In reply to question no. 12 he has stated that Rs 5 or has been set aside for setting up of university and further stated that the same is as per section 11(2) of the Act. In reply to question number 14 he has stated that the amount was set apart considering the needs of the funds required as per the budget. In his reply recorded during the survey proceedings it has also been stated that the resolution was passed on 05 March 2016. These facts were neither admitted as incorrect nor contradictory facts were stated in the statement recorded during the survey. The specific replies were given by the secretary during the survey proceedings and not after the survey proceedings and therefore it cannot be said that it is an afterthought. Hence it cannot be said that the decision to set apart the funds has been taken after the survey action. 4.5 Now the issue of genuineness of the resolution dated 05-03-2016 is being taken up. The ld. AO has observed on page 14 of the assessment order that in the minutes of meeting there are only three issues pertaining to Hostel has been discussed to the minutes neither any discussion has been made regarding setting apart of Rs. 5,00,00,000/- which was left to be applied during the year under consideration nor any discussion for setting up of university was made for which the assessee is claiming to utilize the apart fund. The id, AO has also observed that thus it is crystal clear that there is no relation for a little bit between the copy of minutes of the meeting dated 05/03/2016 furnished during the survey operation and true copy of resolution dated 05/03/2016 furnished during the assessment producing and further observed that true copy of resolution dated 05/03/2016 furnished during the assessment producing is nothing but a fabricated piece of paper which the trustee has duly singed to misguide the revenue. 4.6 During the survey proceedings, the Secretary in his reply has also stated that the resolution was passed on 05 March 2016. In reply to question number 14 he has stated that the amount was set apart considering the needs of the funds required as per the budget. During the appellate proceedings, in this regard, the appellant ha sed that appellant institution approved aforesaid Rs 5 Crore as budget in its general meeting fur setting up university. Institution is preparing its budget according to its object and availability of fund. Further law has specified about passing of resolution and submitting for form only. It never spelled that resolution has to be passed only for the purpose of Income Tax Act. The appellant has further referred to Page No 25 Finance Prativedan of the Budget considered in general meeting in which aforesaid matter is clearly spelled out. Appellant has also referred page no 10 of Assessment order where it is clearly mentioned that Finance Prativedan is approved. The appellant thus submitted that the resolution of Rs 5.00 Crore is part of finance report and duly approved. 4.7 The findings of the Id. AO and the submissions of the appellant have been considered. Section 11(2) of the Act is referred to which reads as under:- I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 15 “(2) Where eighty-five per cent of the income referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section is not applied, or is not deemed to have been applied to charitable or religious purposes in India during the previous year but is accumulated or set apart either in whole or in part for application to such purposes in India, such income des apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, namely (a) such person furnished a statement in the prescribed form and in the prescribed manner to the Assessing Officer, stating the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart which shall in no case exceed five years; (b) the money so accumulated or set apart is invested or deposited or the forms or modes specified in sub-section (5); (c) the statement referred is in clause (a) is justified on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year. Provided that in composting the period of five years referred to in clause (a), the period during which the income could not be applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded. Explanation-Any amount credited or paid out of income referred to in clause (a) or clause (b) of sub-section (1), read with the Explanation to that sub-section, which is not applied, but is accumulated or set apart, to any trust or institution registered under section 12AA or section 12AB or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, shall not be treated as application of income for charitable or religious purposes, either during the period of accumulation or thereafter.” 4.8 From the reading of the section, the appellant is correct that that there is no such specific requirement under law that an income tax law specific resolution has be passed to meet the requirement of section 11(2). The requirement is to accumulate apart the funds with specific purposes. The main contention of the id. A tur doubting the genuineness of the copy of the resolution dated 05-03- 2016 is on account of the finding that in the minutes of meeting there is no specific reference to the accumulate or set apart of funds on the issue. This fact has not been disputed by the appellant. The appellant has however claimed that even though the setting apart of funds was not specifically mentioned in the minutes of meeting however the same was part of the overall finance budget which was approved by the general meeting. The appellant has relied upon the detailed Finance Prativedan in this regard in which setting spart of funds is mentioned. This is part of the Vaarshik Pratidan Prustave Hudget 2017-18, Stithi Vivaran 31 March 2016. On page 3 of the Vaarshik Prativedan, the I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 16 \"Karyavrit\" regarding the Vaarshik Adhiveshan (Annual Meeting for session 2015 16 staris. On page 25 Vitt Prativedan 2015-16 is given. At s. no 1 it is mentioned that the approval of the State Govt. Has been received for the University and that to start the university from session 2016-17 estimated funds of Rs. 5 Cr. have been provisoned in the coming year budget. This Vaarshik Prativedan is dated 01-03-2017 which is much before the date of survey. On page 49, as part of the accepted budget of year 2016-17 (01.04.2016 to 31.03.2017), at S. no. 18 entry of Rs. 5 Cr as \"anudaan\" to University. The scan of the hand written minutes of meeting from the register obtained during the survey and also submitted by appellant during the assessment proceedings is extracted on page 9 to 14 of the assessment order. In the extract on page 10 it is stated that Vitt Prativedan was passed by the Sadan (assembly). Considering the facts of the case, the appellant has sufficiently shown that the Finance Prativedan was passed in oral meeting and setting apart of funds for setting up university is part of the tin Thor further corroborated by the finding in the pre- paragraphs where it has already been held that it cannot be said that the decision to set apart the funds has been taken after/in consequence of the survey action. In view the discussion, the fining the ld. AO that the resolution dated 05-03-2016 is non-genuine is not with pertinent evidences, The learned assessing officer has not commented in the assessment order on the submissions of the appellant that the set apart funds were invested in the fixed deposits as apparently the resolution and Form 10 itself was rejected. The appellant has submitted balance sheet to show that there is substantial in rose in lined deposit to buttress his arguments. However that issue is left as it is as that being not the issue arising from assessment order. Thus it can be said that the decision to set apart the funds was taken by the appellant before the survey. 4.9 Now issue of delayed filing of Form 10 is taken up. The Id. AO has stated The Farm 10 has to be submitted in prescribed manner as laid down in Rule 17 of the Income Tax Act, 1962 and has to be submitted within due date u/s 139[1). Later, the CBDT circular no. 273 dated, 03-06-1980 allows filing of Form 10 before the assessing officer, even after the expiry of the due date u/s 139(1)- provided the delay is condoned by the Commissioner of Income Tax. However, appellant in its reply during assessing рroceedings merely requested the Id. assessing officer to condone the delay for filing Form 10 and did not make application before the competent authority and simply relied wants the Judgements of Hon'ble Courts which are in different context of the matter. Appellant institution filed its return for Assessment Year 2016-17 on 20.02.2018 u/s 139(4), alongwith audit report u/s Form 10 and Form 10B as stated in submissions. Form 10B is the form for audit report under clause (b) of the tenth proviso to clause pack of section 10 and sub clause (ii) of clause (b) of sub- section (1) of section 12A of the Income Tax Act, 1961 in the case of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution. The appellant submitted that it has uploaded ITR, Form 10B and Form 10 Electronically as soon as consolidation of Balance Sheet was completed. It is observes from the findings that Form 10B was not provided during survey. Appellant has also stated that it filed Form 10 along with copy of acknowledgement that it was filed on 22.02.22018. The I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 17 appellant has cited and relied upon number of judgments of form for informing the set-apart can be conditioned in the appeal proceedings. The appellant has in this regard also submitted as under:- “6. It is respectfully submitted that as per large no of judicial decisions in delayed Filing of Form 10 it is held that Filing of Form 10 in mandatory to chain benefit of Set Apart, however provision relating to date of filing directory and appellant is allowed to claim benefit if the same is filed before completion of assessment and even at appellate stage and at ITAT level also.” ................. ...................... “9. It is respectfully submitted that this is the first year when electronic filing of Form 10 intimation) for setting apart is made compulsory and due to non availability of functionality said form formed could not be uploaded and looking to this genuine difficulty CBDT issued circular on 20th Dec 2018 directing AO’s and CIT's to condone delay in submission of Form 10 for Ast Year 2015-16 & 2016-17. However as the assessment orders already passed and matter is before your goodself, we could not approach to worthy Commissioner of Income Tax (Exemption) for delay condonation as directed therein. In view of we request your goodself to kindly condone the delay in submission of Form 10 and allow relief to the assessee. It is respectfully submitted that honourable judicial authorities allow submission of Form 10 even at appeal level, during the course of assessment proceedings and we have already submitted separately compilation of these decision. In view of above, and looking to the fact that appellant institution full filed sustentative requirement of passing the resolution and submitting the Form 10, its claim of set apart be allowed.” 4.10 The judgements cited have been perused and carefully considered. The ld. AO has also observed on page 19 of his order that the judgment of the Hon'ble Supreme Court in the case of Nagpur Hotel Owners Association is not applicable in the present case facts are not identical with this case. This judgment in the Nagpur Hotel Owners Association (supra) cannot be construed in the manner that the assessee is at liberty to claim set apart u/s 11(2) for any amount, at any point of time, by filing a Form 10. Form 10 and resolution accompanied should be passed obviously before the time of filing of return of income of the corresponding year. 4.11 The Judgments relied upon by the appellant are distinguishable as the referred judgements pertain to the assessment years when there was no specific time provided in the section 11 for furnishing of form 10 and time was provided in the rules and it has been held in the judgments inter-alia that time limit provided in rules was not binding and thus submission of form 10 beyond that time limit could be accepted and the claim could be allowed to the taxpayers. This was fairly agreed by the learned authorized representative I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 18 during the hearing. From assessment year 2016-17 the ssection has been amended whereby clause (a), (b) and (c) have been inserted in place of the earlier clause (a), (b), first previso and second proviso. Before these amendments no specific time Unit was provided in the income tax act section 11 for furnishing of the notice in writing to the assessing officer in the prescribed manner. However vide this amendment specific time limit has been provided. Initially a time limit of on or before thin due date to furnish the income tax return was provided and subsequently with effect from AY 23-24 the time limit has further been changed to at least two months prior to the due date of furnishing of ITR. Accordingly the appellant is required to file form 10 as per the time limit provided in section 11 of the Act. Reliance is also placed. he judgement of Hon'ble Supreme Court in the case of Principal Commissioner of Income Tax- III, Bangalore and another vs M/s Wipro Limited in CIVIL APPEAL 2022 (Arising out of SLP(Civil) No. 7620/2021) whereby in the context of section 10B of the Act it is held as under:- “14 In view of the above discussion and for the reasons stated above, we are of the opinion that the High Court has committed a grave error in observing and holding that the requirement of furnishing a declaration under Section 10B (8) of the IT Act is mandatory, but the time limit within which the declaration is to be filed is not mandatory but is directory. The same is erroneous and contrary to the unambiguous language contained in Section 10B (8) of the IT Act. We hold that for claiming the benefit under Section 10B (8) of the IT Act, the twin conditions furnishing a declaration before the assessing officer and that too before the due date for filing the original return of income under section 139(1) are to be satisfied and both are mandatorily to be complied with. Accordingly, the question of law is answered in favour of the Revenue and against the assessee.” 4.12 The language of section 11 in the context of the issue as discussed above is very clear and there is no ambiguity regarding that and even the appellant has not raised any such issue. Further there is no express provision in the section providing for condonation of delay which can be examined in the appeal. The issue has been discussed in detail and various aspects raised by the appellant have been dealt with. In view of the discussion above and applying the principle enumerated by Hon Supreme Court in judgment referred above I agree with the id. AO that Form 10 should be passed obviously before the time of filing of return of income of the corresponding year and it is held hereby that the appellant was required to file form 10 on or before the due date of filing of tax return under section 139(1) and such delay cannot be condoned in appeal. The appellant has also referred to CBDT circular providing for procedure for applying for condonation of delay before the competent authority. T noted that the appellant has not applied for the condonation of delay before the competent authority and this issue is also mentioned by the ld. assessing officer in the assessment order. The appellant in this regard has inter alia submitted that I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 19 4. It is further respectfully submitted that this is First Your when e filing of Form 10 is made mandatory and there were lot of technical glitches in its uploading, Considering this CBDT issued circular 20th Dec 2018 to provide relief to the institution. 5 It is respectfully submitted that Assessment on this case is completed un 25th Dec 2018, in other words assessee appellant could not get opportunity to file request for delay condonation before honourable CIT. 4.13 The appellant has stated that the competent authority for considering the condonation of delay is the learned CIT. CBDT has clearly provided for the manner and the competent authority for considering the application of condonation of delay Considering this, the above view that appellate authority cannot go into the issue of condonation of delay on the issue involved in the appeal, is further fortified. For considering the condonation of delay application the competent authority has been notified by the CBDT and the appellant could make appropriate application before such competent authority subject to low. It is clarified that in the event that any such application is filed, the issue of delay and the application for condonation thereof and the decision of ld. competent authority i.e. the ld. CIT would remain uninfluenced and independent from any observation and finding in this order. 4.14 In view of the above, it is held that the time limit provided under section 11(2) is not mere directory but is mandatory and the appellant has not complied with the filing of Form 10 within the mandatory time limit. The condonation of delay in filing of Form10 cannot be examined/considered in the present proceedings. Thus the appellant is not entitled to get benefit of the set apart provisions under section 11(2) of the Act and appeal of the appellant on this ground is dismissed. 5. In the result, the appeal of the appellant is dismissed.” 8. As the appeal of the assessee was dismissed by the ld. CIT(A), the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various grounds so raised by the ld. AR of the assessee, has filed the written submissions in respect of the various grounds raised by the assessee and the same is reproduced herein below: I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 20 1. Appellant is a registered society engaged in imparting of education since 1923. 2. Appellant society filed its return of income on 20.02.2018 after claiming set apart of Rs 5.00 Crore and also uploaded Form 10 and 10B on same date electronically. 3. A survey was conducted u/s 133A on 16.02.2018 in order to verify large cash deposits during Demonetization period, however the same was duly explained and no adverse inference was made. Further no other incriminating document was found. 4. During assessment proceeding learned rejected set apart claim of appellant of Rs 5.00 Crore on the ground that resolution submitted by the appellant was not passed in the meeting in which it is claimed with following observation: a) Form 10B was not provided during survey. (page 4) b) How the institution come to know about set apart amount on 05/03/2016 without preparing balance sheet. c) It appears from the survey record that aforesaid resolution is not passed on 05.03.2016 as the matter discussed during the meeting was only about installation of Solar Plant of Rs 3 Crore and Starting of carrier counseling center with an estimated budget of Rs 22 Crore. According to learned AO aforesaid resolution is fabricated piece of paper submitted to mislead the department. (Page 11 & 14) . 5. Being aggrieved by this , First appeal was filed on behalf of the assessee with following grounds of appeal : “That the Learned AO has wrongly disallowed set apart claim of Rs 5,00,00,000/- without considering full facts and circumstances of the case. The disallowance is made without fully considering facts and circumstances . Hence the disallowance of Rs 5,00,00,000/- made by the learned AO be disallowed.” 6. The aforesaid appeal was decided by Ld CIT A vide his order dated with following observations : As noted in the assessment order the appellant assessee society has filed its return of income u/s l39{4A) of the I.T. Act claiming exemption u/s 11 of the I.T. Act and accordingly filed its audit report in form 10B. As per return of income the assessee, during lie year under consideration it was in receipt of Rs. 29,23,28, 052/- out of which Rs. 2O,14,75,028/ - was applied as revenue expenditure and Rs. 1,18,83,398/ - as capital expenditure. After application it also claimed Rs.5,00,00,000/- exempted u/s 11(2) of the l. T. Act leaving a surplus of Rs. 2,89,94,626/- claiming the same in accordance with section 11 ( l) (a) of the I.T. Act. A survey u/s 133A of the I.T. Act, 1961 conducted on 16/02/2018 in case of the appellant. The assessee had not filed its return of income for two years i.e. for A.Y. 2016-17 and A.Y. 2017-18 till the date of the survey. On being asked the reason for the same, it was reported as due to non- I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 21 consolidation of audit report/financial accounts. During the survey proceedings, the appellant assessee submitted individual institution wise audit report and further submitted that after consolidation, return would be filed. The assessee filed its return for A.Y. 2016-17 only on 20.02.2018 and produced the copy of the same to the ld. AO on 21.02.2018 The appellant in its return of income as well as in Form l0B filed on 20/02/2018 has claimed Rs. 5,00,00,000/ - set apart during the year and claimed exemption u/s 11(2) of the I.T. Act. This issue was examined by the Id. AO and in the assessment order the benefit of set-apart was denied to the appellant by inter-alia observing that the decision to set-apart the funds was an after thought and the resolution dated 05.03.2016 whereby the set-apart was decided was not genuine. 4.2 Regarding the issue, the Id. AO has observed in the assessment order but from the true copy of resolution furnished by the assessee it is evident that it was resolved on the 5th March 2016 to set apart Rs. 5,00,00,000. (Page 4 of the assessment order). The ld. AO has also observed on page 6 of assessment order that in absence of consolidated audit report how it is possible to ascertain on 05/03/2016 as to what amount was left with the society to apply which it had to set apart in order to avail benefit of section 11(2) of the I.T. Act. He has further observed that thus furnishing of form 10 after survey operation and even after filing the return of income is nothing but just an afterthought of the assessee to avoid its liability for taxation, if any. (Page 6 of the assessment order). The ld. AO has extracted scanned copy of statement of secretary Dr. Mahendra Singh Rathore S/o Lt. Shri Govind Singh Ji Rathore on page 7 of assessment order. In reply to question no. 12 he has stated that Rs. 5 cr. has been set aside for setting up of university and further stated that the same is as per section 11(2) of the Act. In reply to question number 14 he has stated that the amount was set apart considering the needs of the funds required as per the budget. In his reply recorded during the survey proceedings it has also been stated that the resolution was passed on 05 March 2016. These facts were neither admitted as incorrect nor contradictory facts were stated in the statement recorded during the survey. The specific replies were given by the secretary during the survey proceedings and not after the survey proceedings and therefore it cannot be said that it is an afterthought. Hence it cannot be said that the decision to set apart the funds has been taken after the survey action. 4.5 Now the issue of genuineness of the resolution dated 05-03-2016 is being taken up. The ld. AO has observed on page l4 of the assessment order that in the minutes of meeting there are only three issues pertaining to Hostel has been discussed. In the minutes neither any discussion has been made regarding setting apart of Rs. 5,00.00.000/ which was left to be applied during the year under consideration nor any discussion for setting up of university was made for which the assessee is claiming to utilize the set apart fund. The ld. AO has also observed that thus it is crystal clear that there is no relation for a little bit between the copy of minutes of the meeting dated 05/03/2016 furnished during the survey operation and true copy of resolution dated 05/03/2016 furnished during the assessment producing and further observed that true copy of resolution dated 05/03/2016 furnished during the assessment producing is nothing but a fabricated piece of paper which the trustee has duly singed to misguide the revenue. I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 22 4.6 During the survey proceedings, the Secretary in his reply has also stated that the resolution was passed on 05 March 2016. In reply to question number 14 he has stated that the amount was set apart considering the needs of the funds required as per the budget. During the appellate proceedings, in this regard, the appellant has stated that appellant institution approved aforesaid Rs 5 Crore as budget in its general meeting for setting up university. Institution is preparing its budget according to its object and availability of fund. Further law has specified about passing of resolution and submitting for form only. It never spelled that resolution has to be passed only for the purpose of Income Tax Act. The appellant has further referred to Page No 25 - Finance Prativedan of the Budget considered in general meeting in which aforesaid matter is clearly spelled out. Appellant has also referred page no 10 of Assessment Order where it is clearly mentioned that Finance Prativedan is approved. The appellant thus submitted that the resolution of Rs 5.00 Crore is part of finance report and duly approved. 4.7 The findings of the Id. AO and the submissions of the appellant have been considered. 4.8 From the reading of the section, the appellant is correct that that there is no such specific requirement under law that an income tax law specific resolution has to be passed to meet the requirement of section 11(2). The requirement is to accumulate or set apart the funds for specific purposes. . The main contention of the Id. AO for doubting the genuineness of the copy of the resolution dated 05-03-2O16 is on account of the finding that in the minutes of meeting there is no specific reference to the accumulate or set apart of funds on the issue. This fact has not been disputed by the appellant. The appellant has however claimed that even though the setting apart of funds was not specifically mentioned in the minutes of meeting however the same was part of the overall finance budget which was approved by the general meeting. The appellant has relied upon the detailed Finance Prativedan in this regard in which setting apart of funds is mentioned. This is part of the Vaarshik Prativedan, Prastavit Budget 2017-18, Stithi Vivaran 31st March 2016. On page 8 of the Vaarshik Prativedan. the \"Karyavrit\" regarding the Vaarshik Adhiveshan (Annual Meeting] for session 2015-16 starts. On page 25 Vitt Prativedan 2O15-16 is given. At s. no. 1 it is mentioned that the approval of the State Govt. Has been received for the University and that to start the university from session 2016-17 estimated funds of Rs. 5 Cr. have been provisioned in the coming year budget. This Vaarshik Prativedan is dated 01-02 2017 which is much before the date of survey. On page 49, as part of the accepted budget of year 2016-17 (01.04.0216 to 31.03.2017) at S No 18 entry of Rs 5 Crore as Anudan to University. The scan of the hand written minutes of meeting from the register obtained during the survey and also submitted by appellant during the assessment proceedings is extracted on page 9 to 14 of the assessment order. In the extract on page 10 it is stated that Vitt Prativedan was passed by the Sadan (assembly). Considering the facts of the case. the appellant has sufficiently shown that the Finance Prativedan was passed in general meeting and setting apart of funds for setting up university is part of the same. This is I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 23 further corroborated by the finding in the pre-paragraphs where it has already been held that it cannot be said that the decision to set apart the funds has tween taken after/in consequence of the survey action. In view the discussion, the finding of the Id. AO that the resolution dated 05-03-2016 is non-genuine is not supported with pertinent evidences. The learned assessing officer has not commented in the assessment order on the submissions of the appellant that the set apart funds were invested in the fixed deposits as apparently the resolution and Form 10 itself was rejected. The appellant has submitted balance sheet to show that there is substantial increase in fixed deposit to buttress his arguments. However that issue is left as it is as that being not the issue arising from assessment order. Thus it can be said that the decision to set apart the funds was taken by the appellant before the survey. Delay in Submission of Form 10(1) 4.12 The language of section 11 in the context of the issue as discussed above is very clear and there is no ambiguity regarding that and even the appellant has not raised any such issue. Further there is no express provision in the section providing for condonation of delay which can be examined in the appeal. The issue has been discussed in detail and various aspects raised by the appellant have been dealt with. In view of the discussion above and applying the principle enumerated by Hon’ble Supreme Court in judgment referred above I agree with the ld. AO that Form 10 should be passed obviously before the time of filing of return of income of the corresponding year and it is held hereby that the appellant was required to file form 10 on or before the due date of filing of tax return under section 139(1) and such delays cannot be condoned in appeal. The appellant has also referred to CBDT circular providing for procedure for applying for condonation of delay before the competent authority. It is noted that the appellant has not applied for the condonation of delay before the competent authority and this issue is also mentioned by the Id. assessing officer in the assessment order. The appellant in this regard has inter-alia submitted that : - it is further respectfully submitted that this is First Year when e. filing of Form 10 is made mandatory and there were lot of technical glitches in its uploading. Considering this CBDT issued circular 20th Dec 2018 to provide relief to the Institutions. - It is respectfully submitted that Assessment in this case in completed on 23rd Dec 2018, in other words assessee appellant could not get opportunity to file request for delay condonation before honourable CIT. The appellant has stated that the competent authority for considering the condonation of delay is the learned CIT. CBDT has clearly provided for the manner and the competent authority for considering the application of condonation of delay. Considering this, the above view that appellate authority cannot go into the issue of condonation of delay on the issue involved in the appeal, is further fortified. For considering the condonation of delay application the competent authority has been notified by the CBDT and the appellant could make appropriate application before the competent authority subject to law. It is clarified that in the event that any such application is filed, the issue of delay I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 24 and the application for condonation thereof and the decision of Ld Competent authority i.e CIT would remain uninfluenced and independent from observation and finding in this order. Thus the claim of Set apart of Rs 5.00 Crore is disallowed. 7. Being aggrieved by this present appeal if filed before the honourable ITAT which has following grounds of appeal : 1. That Learned CIT A has wrongly confirmed disallowance of set apart claim of Rs 5,00,00,000/- without considering full facts and circumstances of the case. The confirmation of disallowance of set aside of claim is without following provisions of law and considering full facts and circumstances of the case. Hence the disallowance of set apart claim is bad in law and be deleted. 2. That Appellant reserves his right to add or amend grounds of appeal. OUR SUBMISSION 1. It is respectfully that there is no dispute about the application of income, and the Ld. AO Accepted application of income with respect to revenue expenditure as well as capital expenditure. 2. It is respectfully submitted that there is no dispute about filing of Form 10 for claiming set apart of Rs 5.00 Crore and also of the fact that the same was filed belatedly alongwith return of Income. 3. It is respectfully this is first year in which filing of Form 10 was introduced in Income Tax Act itself , otherwise it was governed by Income Tax Rules. 4. It is respectfully submitted that Assessment Order in this case was passed on 25.12.2018 and first circular providing delay condonation by CIT Exemption was issued on 20.02.2018 and further assessment itself was getting barred by the limitation on 31.12.2018. 5. It is respectfully appellant was prevented to file delay condonation application before Learned CIT Exemption on account of rejection of its set apart claim by the Ld AO on various ground like doubting of genuineness of resolutions passed. In view of aforesaid disputed facts, appellant could not make application before honourable CIT Exemptions for delay condonation as provided in the Circular. 6. It is respectfully submitted that even after passing of order by learned CIT A in which learned CIT A held that observation of Ld AO that Form 10 is not supported by genuine resolution is not supported by the facts, we are not sure whether the department is ready to accept aforesaid finding or not , in case no , then approaching before your Honour. In view of these specific peculiar circumstances , we could not move application before CIT Exemption. 7. It is respectfully submitted that Ld AO rejected claim of set apart on twin grounds : a) That Form 10 filed is not supported by genuine resolution for setting apart of the amount, and b) That Form 10 is filed after due date of filing of return. I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 25 8. It is respectfully submitted in view of aforesaid position, in our humble opinion issue about the genuineness of resolution enclosed with Form 10 is settled finally as Department has not filed appeal against it before your honour. 9. It is respectfully submitted that now the issue before honourable bench is rejection of Form 10 by the learned CIT Appeal due to its late filing. 10. It is respectfully submitted that Ld CIT A has fairly observed that this is the First Year when electronic filing of Form 10 is made compulsory and due date of its filing is incorporated in the Income Tax Act itself and rejected various judicial precedent submitted before him during appellant proceeding in view of this amended position of Act. Prior to this honourable ITAT and CIT Appeals as well as Well various high Court were of the opining that passing or resolution to set apart amount with specific use- a prerequisite to Form 10 and investing the same in specified instruments, and obtaining of Audit Report in Form 10 B are mandatory and its filing is procedural and same can be filed alongwith Return , during Assessment Proceedings and in Appellate proceedings upto ITAT Level. 11. In other words filing of Form 10 and Form10B were considered ad procedural part to be supported by substantive action. 12. In framing aforesaid opinion leaned CIT A also relied on decision of honourable Supreme Court which was passed with reference to Sub Section 8 of Section 10B of the IT Act which deals with exemption to 100% Export Oriented Unit. Sub Section 8 grants an right to assessee to withdraw himself from the provisions of Section 10B. Thus SS 8 of Section 10B deals in entire different set of circumstances and Section 11 and 12 in other. Hence the Decision of Honourable Supreme Court in case of CIT & Others vs Wipro Ltd reported at (2022) 327 CTR (SC) 381 is not applicable in present case in hands in our humble opinion. 13. It is respectfully submitted keeping in view of practical difficulties and technical glitches on efilling site as well as nature of provision which is beneficial to public as large honourable CBDT issued various circulars directing authorities to condone the delay taking liberal view. 14. It is respectfully submitted that honourable ITAT Jaipur Bench in case of Rajasthan Medical Relief Society Vs ITO reported at ((2024) 70 CCH 0289 JaipurTrib deals in similar matter as under : Brief Facts “That the assessee institution is a Charitable Trust duly registered under section 12A of the IT Act, 1961. This trust is an State Government Controlled working for the aid and assistance of the poor, needy and downtrodden. On receipt of intimation under section 143(1) of the IT Act, 1961, the assessee filed a rectification application under the impression that the authorities will look into the entirety of the details filed in the ITR submitted and not limit itself to the claim made erroneously under section 11 of the IT Act, 1961. It shall be observed that as per the details filed in the ITR there is a net loss as per Income and Expenditure account and there was no necessity for claim made under section 11 of the IT Act, 1961. If any erroneous claim has been made by I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 26 the assessee that should have been ignored and assessment made on the basis of details filed in the ITR filed. Unfortunately, the same has not been the course of action of the authorities who have only limited there perception on claim made under section 11 of the IT Act, 1961 and as the assessee had not uploaded the Audit Report disallowed the claim under section 11 of the IT Act, 1961 in view of the provisions under section 12A(1(b) of the IT Act, 1961.” “We have heard the rival contentions, perused the material placed on record. The ld. AR of the assessee placed on record that an order of the CBDT F. No. 225/358/2018/ITA.II dated 08.10.2018 wherein the due date extended up to 31.10.2018 and the assessee in this case e.filed the form no. 10B on 28.01.2020 vide acknowledgement no. 297173731280120. The bench also noted that even otherwise the issue that the whether the assessee denied the benefit of exemption as a trust merely on the reason that the audit report in Form no. 10 B filed belated. This issue is decided by the Gujarat High Court in the case of Sarvodaya Charitable Trust Vs. ITO(E) (2021) 278 Taxman 148 (Guj.) (HC), Where assessee, a public charitable trust registered u/s 12A, had substantially satisfied condition for availing benefit of exemption as a trust, it could not be denied exemption merely on bar of limitation in furnishing audit report in Form No.10B especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. The similar issue is also dealt by the coordinate bench of Ahmedabad in the case of ITO(E) Vs. Shri Laxmanarayan Dev Shrishan Seva Khendra ITA No. 410/Ahd/2022 order dt. 19.05.2023 (Ahmedabad) (Trib.) and Rajkot bench in the case of Sh. Rajkot Vishashrimali Jain Samaj Vs. ITO (2023) 200 ITD 662 (Rajkot) (Trib.). On being consistent to the view in the matter we direct the ld. Jurisdiction Assessing Officer (JAO) to consider the Form no. 10B through belated and allow the claim of exemption u/s. 11 of the Act to the assessee.” In the result, the appeal of the assessee is allowed 15. It is respectfully submitted that our aforesaid view is also getting support from following judicial decision : a) SARVODAYA CHARITABLE TRUST vs. INCOME TAX OFFICER (EXEMPTION) reported at (2021) 278 Taxman 148 (Guj) b) HIMALAYAN BUDDHIST CULTURAL ASSOCIATION vs. ASSISTANT COMMISSIONER OF INCOME TAX reported at(2022) 64 CCH 0005 ChdTrib c) THE ASSOCIATED CHAMBERS OF COMMERCE AND INDUSTRY OF INDIA vs. DEPUTY COMMISSIONER OF INCOME TAX & ORS. Reported at (2024) 120 CCH 0146 DelH d) JOINT COMMISSIONER OF INCOME TAX vs. GUJARAT ENERGY DEVELOPMENT AGENCY reported at (2023) 37 NYPTTJ 1464 (Ahd) e) DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION) vs. STATE INSTITUTE OF HEALTH & FAMILY WELFARE reported at (2023) 37 NYPTTJ 1402 (JP) f) BAR COUNCIL OF INDIA vs. COMMISSIONER OF INCOME TAX (EXEMPTION) reported at (2024) 8 NYPCTR 31 (Del) I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 27 g) INCOME TAX OFFICER(EXEMPTION) vs. RAMJI MANDIR RELIGIOUS & CHARITABLE TRUST reported at (2024) 38 NYPTTJ 6 (Ahd) In view of aforesaid factual and legal position , we request your honour to kindly allow the set apart of Rs 5.00 crore and oblige. ” 9. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions: S. No. Particulars From To 1 Written submission 1 17 2 Rajasthan Medical Relief Society vs. ITO ITAT Jaipur 18 25 3 DCIT vs. State Institute of Health & Family Welfare 26 35 4 Principal Commissioner of Income Tax vs. Wipro Ltd. (SC) 35 56 10. The ld. AR of the assessee in addition to the above written submission so filed briefly submitted that in this appeal only two issue are involved one is that the assessee filed belated form no. 10 and resolution supported to that form was questioned to have been genuine or not. It is not in dispute that the assessee has made the investment of money set a part in the prescribed mode on 05.03.2016. As regards the purpose of the survey there is no adverse finding which was on account of deposit of SBN. As regards the genuineness of the resolution the relevant finding of the ld. CIT(A) is reproduced herein below : 4.8 From the reading of the section, the appellant is correct that that there is no such specific requirement under law that an income tax law specific resolution I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 28 has be passed to meet the requirement of section 11(2). The requirement is to accumulate apart the funds with specific purposes. The main contention of the id. A tur doubting the genuineness of the copy of the resolution dated 05-03- 2016 is on account of the finding that in the minutes of meeting there is no specific reference to the accumulate or set apart of funds on the issue. This fact has not been disputed by the appellant. The appellant has however claimed that even though the setting apart of funds was not specifically mentioned in the minutes of meeting however the same was part of the overall finance budget which was approved by the general meeting. The appellant has relied upon the detailed Finance Prativedan in this regard in which setting spart of funds is mentioned. This is part of the Vaarshik Pratidan Prustave Hudget 2017-18, Stithi Vivaran 31 March 2016. On page 3 of the Vaarshik Prativedan, the \"Karyavrit\" regarding the Vaarshik Adhiveshan (Annual Meeting for session 2015 16 staris. On page 25 Vitt Prativedan 2015-16 is given. At s. no 1 it is mentioned that the approval of the State Govt. Has been received for the University and that to start the university from session 2016-17 estimated funds of Rs. 5 Cr. have been provisoned in the coming year budget. This Vaarshik Prativedan is dated 01-03-2017 which is much before the date of survey. On page 49, as part of the accepted budget of year 2016-17 (01.04.2016 to 31.03.2017), at S. no. 18 entry of Rs. 5 Cr as \"anudaan\" to University. The scan of the hand written minutes of meeting from the register obtained during the survey and also submitted by appellant during the assessment proceedings is extracted on page 9 to 14 of the assessment order. In the extract on page 10 it is stated that Vitt Prativedan was passed by the Sadan (assembly). Considering the facts of the case, the appellant has sufficiently shown that the Finance Prativedan was passed in oral meeting and setting apart of funds for setting up university is part of the tin Thor further corroborated by the finding in the pre- paragraphs where it has already been held that it cannot be said that the decision to set apart the funds has been taken after/in consequence of the survey action. In view the discussion, the fining the ld. AO that the resolution dated 05-03-2016 is non-genuine is not with pertinent evidences, The learned assessing officer has not commented in the assessment order on the submissions of the appellant that the set apart funds were invested in the fixed deposits as apparently the resolution and Form 10 itself was rejected. The appellant has submitted balance sheet to show that there is substantial in rose in lined deposit to buttress his arguments. However that issue is left as it is as that being not the issue arising from assessment order. Thus it can be said that the decision to set apart the funds was taken by the appellant before the survey. Thus, now the issue left is belated filling of form no. 10. On this aspect of the matte the ld. AR of the assessee submitted on this aspect of the filling form 10 with delay the CBDT circular no. 7/2018 dated 27/12/2018 I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 29 come to the rescue of the assessee and there by the delay should be condoned. 11. The ld DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. CIT(A). 12. We have heard the rival contentions and perused the material placed on record. The apple of discord as raised and emanates from the order of the assessment is that whether the form no 10 submitted much later after due date along with the resolution [ which was considered by ld. AO as fabricated] would constitute the denial of benefit of section 11 (2) to the assessee trust. The brief facts as culled out from the record related to the issue is that the assessee trust / society filed its return of income on 20.02.2018 after claiming set apart of Rs 5.00 Crore and also uploaded Form 10 and 10B on same date electronically i.e. on 20.02.2018. The assessee in its return of income as well as in Form 10B filed on 20/02/2018 has claimed Rs. 5,00,00,000/- set apart during the year and claimed exempted u/s 11(2) of the Act. For making a claim u/s 11(2) of the Act the assessee is required to comply with Rule 17 of income tax Rule. Accordingly, vide note sheet I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 30 entry dated 28/11/2018, the assessee was asked to furnish copy of requisite Form 10 along with copy of resolution against claim of Rs. 5,00,00,000/- as set apart and claimed exemption u/s 11(2). As the form was filed belated after the due date the assessee was given show cause notice. In compliance to the show cause the assessee furnished copy of Form 10 along with copy of acknowledgment depicting that it was filed on 22/02/2018. It also produces true copy of resolution duly singed by the Secretary, Vidhya Pracharini Sabha wherein it was resolved that a sum of Rs. 5,00,00,000/- be set apart from currents years (2015-16) receipt for sponsoring BN University, application for which is in advance stage with Government of Rajasthan for a period of 5 Years and the said amount shall be kept in fixed deposit form with banks. This furnishing of Form 10 in order to claim an amount of Rs. 5,00,00,000/- exempted u/s 11(2) of the Act was not acceptable to the ld. AO on the first reasons that the true copy of resolution furnished by the assessee wherein it is was resolved on the 5th March 2016 to set apart Rs. 5,00,00,000/-. But the assessee failed to file its return of income till the date of survey i.e. 16/02/2018, it could file its return of income only on 20/02/2018. Post survey on 21/02/2018 on being asked while recording statement on oath, if it has brought the copy of Form 10B (audit report) on the basis of which return of income was filed on I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 31 20/02/2018 as the same was not provided during the survey operation. From the reply of the trustee till date of taking statement on oath i.e. upto 21/02/2018 it was not having its consolidated audit report with it even though it had filed its return of income on 20/02/2018. In absence of consolidated audit report how it was possible to ascertain on 05/03/2016 as to what amount was left with the society to apply which it had to set apart in order to avail benefit of section 11(2) of the Act. Thereby the ld. AO went on believing that it was only an astrologer or magician who can easily know before getting accounts of Institution audited as to what amount is to set apart by which it would be stand for short application of income after completion of consolidation of account. Thus furnishing of form 10 after survey operation and even after filing the return of income is nothing but just an afterthought of the assessee to avoid its liability for taxation. The provision laid down in section 11(2) is very much explicit regarding claim of benefit of set apart. There are certain parameters for availing claim of section 11(2) viz form 10 has to be submitted and the same should have to be furnished before expiry of the time allowed under section 139(1), for furnishing the return of income. Hence, in view of these facts the form 10 furnished by the assessee was not acceptable and thereby the claim u/s 11(2) for Rs. 5,00,00,000/- was denied to the assesee. The second reasons advanced by the ld. AO was that the on I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 32 perusal of true copy of resolution furnished during the course of assessment proceedings, it was noticed that purpose of setting apart of amount of Rs. 5,00,00,000/- has been declared for sponsoring B.N University/setting up university. Further, during the course of survey, copy of the register meant for passing resolution, was obtained from the survey point. Further, during the post survey statement the assessee itself asserted and produced similar copy of that very register wherein resolution dated 05/03/2018 enumerated. From perusal of minutes of meeting it was noticed that in the minutes of meeting there are only three issues pertaining to Hostel has been discussed. In the minutes resolutions have been made for installation of solar power plant for hostel with estimated budget of Rs. 3 Cr., setting up of carrier counselling cell with estimated budget of Rs. 22 Cr. and to include students of College in Fateh Smarak Scholarship. In the minutes neither any discussion has been made regarding setting apart of Rs. 5,00,00,000/- which was left to be applied during the year under consideration nor any discussion for setting up of university was made for which the assessee is claiming to utilize the set apart fund. Thus it is crystal clear that there is no relation for a little bit between the copy of minutes of the meeting dated 05/03/2018 furnished during the survey operation and true copy of resolution dated 05/03/2018 furnished during the assessment producing. I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 33 Hence, true copy of resolution dated 05/03/2018 furnished during the assessment proceeding was nothing but a fabricated piece of paper which the trustee has tendered duly singed to misguide the revenue. Actually, there no such resolution was passed wherein it was decided to set apart Rs. 5,00,00,000/- for the purpose of setting up university out of amount which was left to be applied during the year under consideration. Thus, there is nothing left to establish that the form 10 submitted by the assessee claiming exemption over Rs. 5,00,00,000/- u/s 11(2) of the Act is merely based on a fabricated paper and on the basis of the same form 10 furnished by the assessee and claim made therein was considered as allowable. Apart from the facts mentioned in the aforesaid paras, here again contention of the assessee is not acceptable as in the Act, it has been stated that Form 10 has to be submitted in prescribed manner as laid down in Rule 17 of the Income-tax Rules, 1962 and has to be submitted within due date u/s 139(1). Later, the CBDT circular no. 273 dated 03-06-1980 allows filing of Form 10 before the assessing officer, even after the expiry of the due date u/s 139(1) provided the delay is condoned by the Commissioner of Income Tax. However, assessee in its reply merely requested to condone the dealy for filing form 10 but has not furnished any letter for condonation of delay. Further, it simply relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs. I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 34 Nagpur Hotel Owners Association. As is evident that the Form 10 submitted much after due date along with fabricated resolutions is nothing but an attempt by the assessee to claim a fund as set apart u/s 11(2) to avoid taxation and the same is absolutely not tenable under the law. In view of all above the claim of set apart of Rs. 5,00,00,000/- made during the assessment proceedings of the Act was rejected and ordered to charge to tax at MMR of income tax to that extent. When the matter carried to ld. CIT(A), he hold that the resolution submitted by the assessee cannot be said that the decision to set apart the funds has been taken after/in consequence of the survey action. Thereby ld. CIT(A) holded a view that the resolution submitted cannot be found fault. As we note that against that finding of the ld. CIT(A) the revenue is not in appeal and therefore, now the only issue that is to be decided whether the filling of form no. 10 on 20.02.2018 debarred the assessee to claim the benefit of section 11(2) of the Act? . Against the filling of form 10 and 9A for A. Y. 2016-17 the central board of direct taxes [ CBDT ] came with a circular no. 07/2018 dated 20/12/2018 wherein the board has directed as under: 4. Representations have been received by the Board/ field authorities stating that the Form No. 9A and Form No.10 could not be filed in the specified time for AY 2016-17, which was the first year of e-filing of these forms. It has been requested that the delay in filing of Form No. 9A and Form I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 35 NO.10for AY 2016-17 may be condoned under section 119(2) (b) of the Act. 5. Accordingly, in supersession of earlier Circular/Instruction issued in this regard, with a view to expedite the disposal of applications filed by trusts for condoning the delay and in exercise of the powers conferred under section 119(2)(b) of the Act, the Central Board of Direct Taxes hereby authorizes the Commissioners of Income-tax, to admit belated applications in Form No. 9A and Form No.10 in respect of AY 2016-17 where such Form No. 9A and Form No.10 are filed after the expiry of the time allowed under the relevant provisions of the Act. 6. The Commissioners will, while entertaining such belated applications in Form No. 9A and Form No.10, satisfy themselves that the assessee was prevented by reasonable cause from filing of applications in Form No. 9A and Form No.10 within the stipulated time. Further, in respect of Form No. 10 the Commissioners shall also satisfy themselves that the amount accumulated or set apart has been invested or deposited in anyone or more of the forms or modes specified in sub section (5) of section 11 of the Act. As is evident from the above circular that this was the first year from which the assessees trust were required to file the form no. 10 online and considering that aspect of the matter board as per power vested u/s. 119(2)(b) of the Act condone such delay and the power was given to the Commissioner of Income Tax, while doing so only condition was required to be seen that the assessee has sufficient reasons and the amount has been invested as per the modes prescribed. Here after the decision of the ld. CIT(A) only issue to be decided that whether the delayed filed form on 20.02.2018 be condoned or not. Since, the assessee fulfils the conditions as prescribed as per circular no. 07/2018 we direct the ld. AO considered the claim of the assessee for an amount of Rs. 5,00,00,000/- in accordance with the provision of section 11(2) of I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 36 the Act. Based on this observation the solitary ground of appeal raised by the assessee is allowed. In the result, the appeal of the assessee is allowed. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Dated: 12/11/2024 Ganesh Kumar, Sr. PS Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order Date Initial 1. Draft dictated on Sr.PS/PS 2. Draft placed before author Sr.PS/PS 3. Draft proposed & placed before the Second Member JM/AM I.T.A. No. 19/Jodh/2024 Assessment Year: 2016-17 37 4. Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr. P.S./P.S. Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8. Date on which file goes to the Head Clerk 9. Date on which file goes to the AR 10. Date of dispatch of Order "