TaxTMI 
TaxTMI 
2013 (8) TMI 331
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.... the assessee declared total income at Rs. Nil and the return was accompanied by the auditor's report in form No. 10B along with annexures. The assessee society is running a school in the name of M/s. Wisdom Public School, Ramghat Road, Aligarh. The AO found that the total income of the assessee society during the year under consideration has been Rs. 65,74,356/- and it has spent Rs. 45,94,241/- on charitable activities. The AO, therefore, found that for claiming deduction u/s. 11 & 12 of the IT Act, assessee has to apply 85% of its income for charities as per section 11(1)(a) and in this case, the assessee is not able to spend or wants to accumulate over and above 15% of its income, then it has to fulfill the conditions as provided in section 11(2)(d) of the IT Act. The AO, therefore, found that there is a short fall of application of income which comes to Rs. 9,93,962/-. Therefore, it is liable to tax. It was further found that the assessee has not filed form No. 10 intimating the AO the intention of accumulation and its purpose as is evident from the return of income. The assessee was also asked to produce minutes book which revealed that meeting was held on 27.03.2006, but ....
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....ow that Form No. 10 has to be filed, immediately filed Form No. 10 with the AO on 04.07.2008 along with condonation of delay. Separate application was also filed with the ld. CIT, Aligarh. Copy of the same was also filed. It was, therefore, submitted that due to bona fide reasons, Form No. 10 could not be filed on time. The assessee relied upon the decision of Hon'ble Gujrat High Court in the case of CIT vs. Mayur Foundation, 274 ITR 562 and submitted that the issue is squarely covered by the above judgment in favour of the assessee. Therefore, there is full compliance of provisions of law and the addition is unjustified. 3.1 As regards the additional ground of appeal, the assessee claimed exemption u/s. 10 (23C)(iiiad) and it was submitted that the assessee trust exists solely for educational purpose, therefore, entitled for deduction/exemption under the above provisions, being the aggregate annual receipts are less than Rs. 1 crore. The assessee, thus, fulfilled the requirement of above provisions and the additional ground being legal in nature may be admitted. 4. The ld. CIT(A) called for the remand report from the AO and the remand report is noted in the appellate ord....
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....lling. I hold that conditions of section 10(23C)(iiiad) are being fulfilled and hence on this ground also, the appellant is squarely entitled for exemption of its income from taxation. The Additional ground is thus allowed. 7.2. G.O.A.Nos. 1, 2 & 3. These grounds of appeal are rejected having no substance nor these have been pressed and argued during appeal. 7.3. G.O.A.Nos. 4, 5,6 & 7. All these grounds are in respect of main issue on account of which A.O. has made addition of Rs. 9,93,960/- . The issue in short is that according to A.O. the assessee did not utilize 85% of its income (Rs. 55,88,202/-), as per provisions of section 11 so as to be entitled for deduction as a Trust. When confronted the assessee submitted that fund of Rs. 18 Lac was kept apart in F.D. and it was mentioned in the computation of income as well as in the balance sheet and also during assessment proceedings, details and evidences were given that this fund of Rs. 18 Lac had been utilized in next year. The A.O. objected on the technical ground that there was no prescribed intimation U/s 11 (2) given by the assessee. The assessee realizing this technical mistake brought the intimation into p....
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....tioned and FDR is shown in the balance sheet and in the next year, FDRs were got matured for making investment in the construction of the school building. Resolution was passed specifically on 27.03.2006 to the effect of showing intention to accumulate funds of Rs. 18 lacs to be converted into FDRs for the purpose of making investment in construction of school building. Copy of the order sheet is also filed to show that the AO made queries with regard to the investment made in the FDRs with Punjab National Bank, i.e., Nationalized Bank. The AO and the ld. CIT, Aligarh should have condoned the delay in filing the Form No. 10 belatedly. He has submitted that the issue is covered in favour of the assessee by the judgment of Hon'ble Gujrat High Court in the case of CIT vs. Mayur Foundation (supra) and that the ground No. 2 of appeal of the Revenue is incorrect and that the assessee made correct claim of exemption u/s. 10(23C)(iiiad) of the IT Act because the assessee solely exists for educational purpose, which has not been disputed at the assessment stage. Therefore, the appeal of the Revenue has no merit and the same has to be dismissed. 7. We have considered the rival submiss....
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....ed the assessee's application. The assessee challenged the order of the Commissioner by a writ petition. The High Court directed the Commissioner to reconsider the matter. The Commissioner again rejected the assessee's petitioner. The assessee thereupon filed an additional ground of appeal before the Tribunal to the effect that the trust was not taxable in view of the resolution of accumulation and the notice thereof to the Income-tax Officer under Section 11(2). The Tribunal admitted the additional ground. On the facts the Tribunal found that the genuineness of the trust was not in doubt; that the trust had set apart the amount of donation for the purpose of purchasing land and constructing an orphanage thereupon; that the funds received by way of donations had been kept apart in fixed deposits of nationalized banks; and that the trustees or the settlers had not benefited by the failure or delay on the part of the trust to give notice of such accumulation. Accordingly, the Tribunal held that the assessee-trust had complied with all the requirements stipulated by the provisions of section 11(2). On a reference: Held, (i) that the assessing authority is empowered and is d....
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....accumulation of funds in the prescribed manner along with the return of income. Therefore, as per section 148(1), the return of income filed along with Form No. 10 shall be treated as return so filed under section 139(1). The genuineness of the purpose of the trust and accumulation of funds of the purpose of the assessee as disclosed in the Form No.10 were not disputed by the Assessing Officer. In view of the aforesaid, it was clear that the assessee had filed Form No.10 along with return of income filed under section 148 prior to the completion of the assessment giving the details of the funds/amounts to be accumulated. The details submitted in the Form No.10 were not disputed. The claim of the assessee was rejected merely on the reason that Form No.10 was not filed in time. The issue was to be decided in favour of the assessee. In view of the above, no merit was found in the appeals of the revenue and same were to be dismissed." 7.2 Hon'ble Delhi High Court in the case of CIT vs. Jai Parabolic Springs Ltd.,306 ITR 42, considering several decisions including the decision of Supreme Court in the case of Goetze (India) Ltd. vs. CIT, 284 ITR 323, held as under : "Held....