TaxTMI 
TaxTMI 
2014 (2) TMI 419
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....nvenience. 2. First, we take up the ITA No.32/Ahd/2013 being the appeal of Revenue. The grounds raised in this appeal are as under:- 1. The learned CIT(Appeals) has erred in law and on facts in allowing exemption u/s.11(1) of the IT Act of Rs.66,68,812/- being 15% of Rs.4,44,58,747/-, which includes interest income not shown in P&Loss a/c Rs.54,69,936/-. 2. The learned CIT(Appeals) has erred in law and on facts in allowing accumulation of income of Rs.59,17,000/- under explanation 2 of section 11 as originally claimed by the assessee. 3. On the facts and circumstances of the case the Ld.CIT(A) ought to have upheld the order of the Assessing Officer. 3. Briefly stated facts are that the case of the assessee was picked up for scrutiny as....
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....at on the basis of bonafide mistake, the claim of the assessee ought not to have been rejected. He placed reliance on the decision of Hon'ble High Court of Jammu and Kashmir rendered in the case of CIT vs. Ziarat Mir Syed Ali Hamdani (248 ITR 769)(J&K) and also the decision of Hon'ble High Court of Bombay rendered in the case of Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Trust vs. CIT (207 ITR 368) (Bom.). He submitted that the basis of addition of the AO is totally misconceived. 6. We have heard the rival contentions and perused the material available on record. As per section 11(1) of Explanation-2 - if, in the previous year, the income applied to charitable or religious purposes in India falls short of (85) per cent of ....
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....lid option which would entitle the assessee in terms of the Explanation-2 of section 11(1). We find that the Hon'ble High Court of Jammu & Kashmir has held that the requirement of exercising the option is directory in nature. Further, it has been held that sub-sections (1) & (4) of section 139 have to be read together and, on such a reading, the inevitable conclusion is that a return made within the time specified in sub-section (4) has to be considered as having been made within the time prescribed in sub-section(1) or sub-section (2) of section 139 of the Act. In other words, if a return is filed within the time specified in sub-section (4) of section 139 of the Act and the option contemplated by the Explanation to section 11(1) is exerci....
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....ssessee cannot be deprived of legal claim on the basis of that the claim was not made within time, since the requirement of exercising option is directory in nature. Under the peculiar facts of the present case, we feel that ld.CIT(A) ought to have considered the submissions of the assessee that the requirement of exercising option is being directory in nature, therefore a liberal approach to have been adopted. We are, therefore, of the view that in the light of the Judgements(s) of Hon'ble High Court of Bombay and Hon'ble High Court of J&K, the AO has decided this issue on a wrong basis, therefore we do not find any merit in the ground of the Revenue, the same is hereby rejected. 7. Now, we take up the assessee's appeal, i.e. ITA No.2632/....