Assessee allowed to file revised Form No. 10 during reassessment for Section 11(2) exemption claim

The Delhi HC upheld the assessee's right to file revised Form No. 10 during reassessment proceedings to claim exemption under Section 11(2). The court noted that the AO made no adverse finding regarding fulfillment of accumulation conditions, and the assessee's failure to file the form initially was due to inadvertent error. Following precedent from Association of Corporation Apex Societies of Handlooms case, the court held that filing Form No. 10 during reassessment is permissible. The revenue's appeal to SC was dismissed as withdrawn due to low tax effect. No substantial question of law arose for consideration.

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Issues Involved:
1. Condonation of delay in re-filing the appeal.
2. Legality of reopening the assessment under Section 148 of the Income-tax Act, 1961.
3. Validity of filing revised Form No. 10 during reassessment proceedings.

Condonation of Delay:

The appellant/revenue sought condonation of a 63-day delay in re-filing the appeal. The court, considering the period involved, condoned the delay and disposed of the application accordingly.

Reopening of Assessment:

The appeal concerns the Assessment Year (AY) 2008-09, where the respondent/assessee, a charitable society, had its return of income (ROI) processed under Section 143(1) of the Income-tax Act, 1961. The Assessing Officer (AO) noticed that the respondent/assessee had claimed an advance payment of Rs. 5,85,00,000/- for purchasing an immovable property as 'application of income' in AY 2007-08. This amount was returned in AY 2008-09 but was not included in the ROI for the said year, leading to the reopening of the case under Section 148 of the Act.

Filing Revised Form No. 10:

During reassessment proceedings, the respondent/assessee filed a revised ROI and Form No. 10, which were initially rejected by the AO. The Commissioner of Income Tax (Appeals) [CIT(A)] allowed the appeal, noting that the amount was offered for tax and that the conditions of Section 11(2) for income accumulation were met. The Income Tax Appellate Tribunal (ITAT) upheld this decision, dismissing the appeal filed by the appellant/revenue.

The court examined Section 11 of the Act and the mandatory requirement for filing Form No. 10 to claim benefits under sub-section (2). It was noted that the Tribunal found no adverse findings by the AO regarding the fulfillment of conditions for income accumulation under Section 11(2). The court referred to a coordinate Bench decision in Association of Corporation & Apex Societies of Handlooms, which allowed filing Form No. 10 during reassessment proceedings initiated by the revenue under Section 147.

The court concluded that the respondent/assessee was not precluded from filing a revised Form No. 10 during reassessment proceedings. Given that the appellant/revenue's appeal to the Supreme Court on a similar matter was dismissed due to low tax effect, and the respondent/assessee's Special Leave Petition was admitted, no substantial question of law arose for consideration. The appeal was accordingly closed.

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