AI Drafter 
TaxTMI 
TaxTMI 
2013 (6) TMI 886
X X X X Extracts X X X X
X X X X Extracts X X X X
....dll. CIT, Range-2, Muzaffarnagar at Rs. 1,00,73,695/- against admitted by the appellant at Nil. 2. That the Ld CIT(A) erred in law and on facts in confirming the Assessing Officer's action of not accepting the 'Notice under section 1(2) of the Income Tax Act, 1961 read with Rule 17 of the IT Rules, 1962 for accumulation of income" filed before the Assessing Officer. 3. That the appellant also filed Form No.10 duly signed by the Managing Trustee before the Ld CIT(A) Muzaffarnagar rectifying the bona fide omission of mentioning the Form No.10 on the Notice filed before the ld Assessing Officer but the same has been rejected without any valid reasons. 4. That the authorities below erred in law and on facts in not gra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m perusal of the return it is noticed that the total receipts of the assessee is Rs. 1,97,84,94/- which included sale of land for Rs. 24,01,245/- becomes total receipts of Rs.,2,21,86,240/-. The total application of funds as indicated in Income & Expenditure account is Rs. 97,10,705/-. The expenditure on capital asset is at Rs. 81,99,026/- made up of the following. Thus total application of fund is at Rs. 1,79,09,731/- i.e. (Rs. 97,10,705/- + Rs. 81,99,026/-_. In brief out of total receipts of Rs. 2,21,86,240/-, the application of fund is only to the extent of Rs. 1,79,09,731/- which is only at 80.72%. As the application of funds is less than 85% and there is no application u/s 11(2) along with the return, the exemption u/s 1 of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it is being accumulated. iii) The application dated 26.9.2008 is filed on 21st October, 2008 and therefore cannot be considered as notice as it should have been filed before expiry of time allowed u/s 139 for furnishing of return of income which is 30th September of each year. iv) The notice is signed by Shri Dinesh Mohan, Advocate and not by Secretary or the President of the Society. 5. Dissatisfied with the order, the assessee filed appeal before Ld CIT(A) who after going through the submissions and on the basis of material on record, allowed the benefit of capital expenditure of Rs. 81,99,026/- and reduced the taxable income to Rs. 42,75,263/- by making the following calculation. Net income as Per P&L A/c. Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itted that the assessee has made investment in land in the next year amounting to Rs. 1,25,17,086/- and that investment in assets is for charitable purposes and therefore the purpose of provisions of the Act has been achieved and therefore the rejection of claim of the assessee on account of technical reasons of not filing form No.10 is not justif\ied. Reliance in this respect was placed on the judgment of Hon'ble High Court of Jammu & Kashmir in the case law of CIT v. Zirat Mir Syed Ali Hamdani, Srinagar wherein the Hon'ble Court had held that requirement of exercising the option in writing under clause (2) of Explanation to section 11(1) of the Act is directory in nature and was not mandatory. The Court further held that the Asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar. However, it did not file Form No.10 and instead during assessment proceedings filed a letter conveying its intention to carry forward the un-spent amount in next year for spending in the next year. The contents of Form No.10 are similar to the contents of letter sent by the assessee. The Assessing Officer denied the exemption on account of technical default by the assessee of not conveying its intention in the prescribed form and signed by authorized person. The Hon'ble Jammu & Kashmir High Court in the case of Zirat Mir Sayed Alim Hamdani has held that provision of section 11(2) regarding requirement of exercising the option within the specified time is directory and the assessing authority has the power to condone the delay in exe....