AI Drafter 
TaxTMI 
TaxTMI 
2004 (12) TMI 48
X X X X Extracts X X X X
X X X X Extracts X X X X
.... invalid and whether the Tribunal was right in holding that the appellant-trust has complied with all the conditions prescribed in section 11(2) and is entitled to benefits allowable under the aforesaid provisions?" 2. The assessee is a charitable trust, registered under the provisions of the Bombay Public Trusts Act, 1950. The assessment year is 1980-81 and the relevant accounting year is March 31, 1980. During the year under consideration, the assessee received voluntary contributions amounting to Rs. 2,04,468. The said donations were treated as "income" within the meaning of section 2(24)(iia) of the Act by the Assessing Officer. The assessee contended that the donations of Rs. 1,74,432 and Rs. 9,036 included in the aforesaid total amount of donations were towards the corpus of the trust and in support of the said contention, confirmation letters from two donors were submitted. The Assessing Officer did not accept this submission and after granting permissible accumulation of 25 per cent., held the balance amount of Rs. 1,53,351 as liable to tax in the hands of the assessee. The Commissioner of Income-tax (Appeals) vide his order dated March 20, 1987, confirmed the assessment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erpreted in a manner that would advance a genuine cause of charity and should not deprive an assessee of the statutory benefit on the basis of mere technicalities. The Tribunal has further held that even if the interpretation of such a beneficial provision is reasonably capable of more than one interpretation, one which does not result in deprivation of such an intended relief, should be accepted. 6. On the facts, the Tribunal has found that, in the present case, the genuineness of the trust is not in doubt; that the trust has set apart the aforesaid 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 deposit receipts of nationalised banks; and that the trustees or the settlors had not benefited by the failure or delay on the part of the trust to give notice of such accumulation. Accordingly, the Tribunal has held that the assessee-trust had complied with all the requirements stipulated by the provisions of section 11(2) of the Act. 7. Heard Mr. Tanvish U. Bhatt, learned standing counsel, on behalf of Mr. B.B. Naik, for the applicant-Revenue. Inviting attention ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e controversy and in the light of such findings, the approach of the revenue authorities in denying legitimate relief to an assessee who was bona fide litigating, requires that the order of the Tribunal be confirmed by answering the question in favour of the assessee. 9. The facts, as stated hereinbefore, are not in dispute. The only question which the court is required to decide is, as to whether, in the absence of any specific time-limit prescribed under section 11(2) of the Act, whether the time-limit prescribed in rule 17 for submission of Form No. 10 by the rule-making authority is valid. In the case of Nagpur Hotel Owners' Association [2001] 247 ITR 201 (SC), the following two questions came up for consideration before the Bombay High Court: "(1) Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal is correct in holding that the application in Form No. 10 under rule 17 of the Income-tax Rules, 1962, could be filed even after the assessment is completed? (2) Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal is correct in holding that the Income-tax Rules could not fix any time-limit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngs. Further, any claim for giving the benefit of section 11 on the basis of information supplied, subsequent to the completion of assessment, would mean that the assessment order will have to be reopened. In our opinion, the Act does not contemplate such reopening of the assessment." 11. At first blush, the reading of the aforesaid pronouncement gives an impression that the stand of the Revenue is correct, inasmuch as a notice in writing furnishing the prescribed particulars should be submitted before the assessing authority and a completed assessment cannot be reopened, if such particulars are furnished subsequent to the completion of the assessment. However, it is apparent that the apex court has stated that the details have to be furnished before completion of the assessment proceedings and any information supplied subsequent to the completion of assessment cannot be taken into consideration. The question, therefore, that arises is when can an assessment be said to be complete or till what point of time the assessment proceedings can be said to be alive. 12. In the case of Rambhai Jethabhai Patel v. CIT [1977] 108 ITR 771, this court was called upon to decide the question....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dealing with appeals is, thus, expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of the item. There is no reason to restrict the power of the Tribunal under section 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. The Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) is too narrow a view to take of the powers of ....