TaxTMI 
TaxTMI 
2018 (5) TMI 1911
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.... the necessary documents/intimation was field with the revised return u/s 139(5) of the Income Tax Act, 1961." ITA No. 2169/DEL/2011 (A.Y 2007-08) Assessee's appeal 1. The CIT(A) has erred in denying the contention of the appellant that advance made for charitable purpose of Rs. 3,63,83,604/- cannot be construed as application of income u/s 11 of the Income Tax Act, 1961. 2. The CIT(A) has erred in denying the deemed application u/s 11(1) Explanation 2 of the Income Tax Act on account of unrealized income of Rs. 11`,33,55,285/-. In this regard all the necessary documents/intimation was filed with the belated return u/s 139(4) of the Income Tax Act, 1961." ITA No. 2431/DEL/2011 (A.Y 2007-08) Revenue's appeal "1. In the facts and circumstances of the case, the Ld. CIT(A) has erred in granting benefits of Section 11 & 12 of the Act even when the assessee is involved in purely commercial activities." ITA No. 1470/DEL/2011 (A.Y 2008-09) Revenue's appeal "1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in allowing the eligibility for exemption u/s 11 & 12 of the Income Tax Act, 1961 ....
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.....O is contrary to provisions of law, facts, circumstances, natural justice and all other principles of law and as such liable to be quashed. The Ld. AR submitted that the action of AO in denying the benefits of section 11 & 12 of IT Act is perverse and contrary to the facts and provisions of law hence liable to be undone. The Ld. AR submitted that the society paid the advance during the year under consideration to various suppliers/contractors and claimed the same as application of income for charitable purpose. The Assessing Officer rejected the benefits of section 11 & 12 of IT Act which is arbitrary, contrary to the principles of natural justice and also misconceived on facts and law as such ought to be deleted. The Ld. AR submitted that the Assessing Officer as well as the CIT(A) were erred in denying the contention of the assessee that advances made for charitable purposes amounting to Rs. 26,87,656/- cannot be construed as application of income. Further, the Ld. AR submitted that the CIT(A) erred in denying the deemed application u/s 11 (1) Explanation 2 of the Income Tax Act on account of unrealized income of Rs. 4,01,16,473/- despite filing the necessary documents/intimatio....
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....nces as applincation of income. The word 'may' is used by the CIT(A) which means the CIT(A) has not arrived at the conclusion based on the facts and law. The assessee society paid advance of Rs. 26,87,656/- during the year under consideration to various suppliers/contractors and claimed the same as application of income for charitable purpose only. The evidence put up before the Assessing Officer confirms the same. Thus, these advances was used by the assessee for charitable purpose only. Therefore, the Assessing Officer and CIT(A) was not correct in denying the claim of application of income on the advances made to the various suppliers/contractors. Therefore, Ground No. 1 of the assessee's appeal is allowed. 8. As relates to Ground No. 2, the claim of assessee amounting to Rs. 4,01,16,473/- in respect of deemed application u/s 11(1) explanation 2 of the Income Tax Act, 1961 fulfills all the conditions prescribed therein. The CIT(A) held that the original return was filed and the same was not accompanied by intimation in writing to the Assessing Officer regarding exercise of the option under Explanation 2 to Section 11(1). The intimation was attached to the revised return filed....
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....ral in nature. 4. 'Ground No. 2 is against the benefit of exemption u/s. 11 and 12 of the IT Act. In this regard it is found that similar issue was also involved in assessment year 2007-08 which has been decided by me vide order dated 28-2-2011, wherein, vide para 4.7 of the appellate order, I have held that provision of Section 2(15) of the Act can be attracted w.e.f. assessment year 2009-10 which has been offered for taxation by the assessee from assessment year 2009-10 and details have been submitted in this regard that activity has been found to be in the nature of trade, commerce or business and it has been offered for taxation accordingly for assessment year 2009-10. So, amendment effected from A.Y. 2009-10 cannot be proponed for A.Y. 2008-09. Similar issue has been decided by my predecessor while deciding the appeal for assessment year 2003-04, 2004-05, 2005-06 and 2006-07 and by me for assessment year 2007-08. So, respectfully following the earlie4r year's judgments, it is decided that assessee is eligible for exemption u/s. 11 & 12 of the IT Act. Ground No. 2 of appeal is allowed. 5. Ground No. 3 is consequential as ground No. 2 has already been allow....