TaxTMI 
TaxTMI 
2021 (8) TMI 753
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....ds amounts to double deduction, is again factually incorrect, since no application of income for the earlier years accumulated fund have taken into consideration, therefore, since those accumulated funds have already been utilized in the earlier years and, therefore, the finding of the CIT(A) in concluding in para 4.1 at page 4 is not correct. 4. That the Ld. CIT(A) has erred in giving a finding in para 4.2 that the claim of the assessee out of application of capital expenditure out of the fund accumulated u/s. 11(2) of the I.T. Act 1961 for the earlier year, is without any basis. 5. That the Ld. CIT(A) has erred in holding that Form No. 10, which was filed during the course of assessment proceedings and having not been filed at the time of filing the return of income and, therefore, the said accumulated fund could not be carried forward to the next year. Further, the assessee can make a claim during the assessment proceedings and the Assessing Officer is bound to consider the same. 6. That the Ld. CIT(A) has failed to appreciate and follow the CBDT Circular No. 7/2018 :, dated 20.12.2018, which authorized the department to admit belated application on Fo....
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....pretation made by your good self is not correct. And both Capital & revenue expenses are considered charitable as per provisions of Sec. 11 of the Act." 5.3. The A.O. however was not satisfied from the aforesaid submissions and disallowed the claim of the assessee by observing in para 6 & 7 of the assessment order dt. 08/12/2018 as under: 6. I have considered the submission of the assessee, however, the same is not acceptable. As per form 10, during the assessment year preceding the relevant assessment year, the assessee had accumulated funds of Rs. 52,59,279/- in the year 2012, Rs. 5,00,10,118/- in the year 2013 and Rs. 4,05,55,014/- in the year 2014. The assessee had taken benefit u/s. 11(2) of the Act in these earlier years when the accumulation was made. This issue was also discussed with the authorised representative of the assessee, Sh. Harinder Pal Singh, Advocate, as noted vide order sheet entry dated 26.11.2018. While the assessee is required to use the accumulated or set apart funds u/s. 11(2) of the Act within a period of 5 years, the assessee cannot be allowed to claim the utilization of these accumulated funds in the year in which these are actually utilize....
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.... with circular No. 07/2018 : dt. 20-12-2018 (copy enclosed) authorizing the department to admit the belated application in Form 10 particularly for the A.Y. 2016-17. Please refer highlighted portions of the circular. Had the AO waited till 20-12-2018 as requested, the Form 10 filed by assessee society was in order even specifically as per law. However the Ld. AO was in unusual hurry and passed the assessment order u/s. 143(3) of the Act on 08-12-2018. In the light of above said circular, you are now requested to accept Form-10 filed electronically Belatedly on 17-11-2018. Copy of acknowledgement of same is enclosed and also available on Income Tax e-portal. Even the judicial decisions are there to establish that in case of genuine omissions, Form 10 and even Form 10B audit report can be filed by assessee even during first appeal proceedings as such proceedings are mere extension of regular 143(3) proceedings. Please refer the following case laws whose texts are enclosed: Mali Ram Gopi chand Charitable Trust vs. Addl. CIT-Range-2, Muzaffarnagar (ITA No. 467/Del/2011 dt. 14.6.2013); and C.I.T. vs. Hardeodas Agarwalla Trust dt. 24/....
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.... year 2012-13 will not be available for application in next year (due to five year condition). Thus the interpretation of the Ld. AO of figures filled in ITR and in Form 10 tables of utilization of earlier year accumulated funds is totally out of place and her conclusion that double deduction being claimed is hollow, devoid of facts and unwarranted. When the capital expenses of Rs. 73,47,393/- have been accepted as incurred for charitable purpose as per Sec. 11 of the Act, they can not be put to tax on any ground whatsoever. Therefore you are requested to delete this addition also and oblige. 6.1. The Ld. CIT(A) after considering the submissions of the assessee sustained the disallowance made by the A.O. by observing in para 4.2 of the impugned order as under: 4.2 I have carefully considered the facts of the case and submissions of the appellant. The assessee has accumulated funds u/s. 11(2) of the Income Tax Act, 1961 from A.Y. 2012-13 onwards out of which an amount of Rs. 73,47,393/- was applied during the previous year as capital expenditure on new assets. The assessing officer has disallowed this amount being claimed as application of income during the year....
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....umulated funds under section 11(2) of the Act in the computation of income for the A.Y. 2016-17 which has lead to the entire confusion and the consequent addition. The Ld. Counsel for the assessee furnished a chart (copy of which is placed at page No. 28 of the assessee's paper book) and submitted that the figures in this chart are taken from the audit report available with the department and these figures are correct figures. The said chart reads as under: 8.1. The Ld. Counsel admitted that the said chart was not available to the A.O. as well as the Ld. CIT(A) for their perusal, also furnished copy of the affidavit of the then counsel for the assessee stating therein that the figures of funds accumulated brought forward from the earlier years and utilization made in the year under consideration had been wrongly presented, copy of the said affidavit is placed at page No. 30 to 31 of the assessee's paper book. 8.2. Ld. Counsel for the assessee requested to remand this issue back to the file of the A.O. to be decided afresh after verification and taking into consideration the correct figures. The reliance was placed on the following case laws: * Vijay Vishin Me....
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....tion 11(2) of the Act is clearly certified at Rs. 1,44,17,439/-. That this certification was done by me on the basis of the Resolution dated 16.08.2016 passed by the members of the ICES. 5. That the above said Audit report in Form No. 10B was duly uploaded electronically on the Income-tax portal on 25.08.2016 i.e. within the due date of filing of return for the A.Y. 2016-17. That the Income Tax Return of ICES for the said year was also prepared and filed by me within the due date on 01.09.2016. 6. That the additional compliance of electronic filing of Form 10 for the Assessment Year 2016-17 before the due date of filing of Income Tax Return was omitted to be made due to an inadvertent error as it was a new requirement and it only came to my knowledge during the course of assessment proceedings before the Assessing Officer. That the said Form 10 was then filed electronically immediately on 17.11.2018 vide E-filing Ack. No. 376855871171118 which was available with the Assessing Officer before she concluded the Assessment vide her Assessment Order dated 08.12.2018 passed u/s. 143(3) of the Act. 7. That my client ICES had provided all the information relating....
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.... also the affidavit of the author of the diary, though the documents had a direct bearing on the issue." 10.4. In the present case also as we have already pointed out that the Ld. Counsel for the assessee furnished a chart first time before this Bench of the Tribunal and claimed that the figures taken in this chart are from the record which is available with the department and that the wrong figures were considered by the A.O. which were wrongly mentioned in form No. 10 due to oversight. Since the chart furnished by the assessee has the direct bearing on the issue under consideration and the then counsel for the assessee had also furnished an affidavit stating therein that the figures were wrongly mentioned. We therefore deem it appropriate to set aside this issue back to the file of the A.O. to be adjudicated afresh after considering the aforesaid chart furnished by the assessee and claim of the assessee to be considered after proper verification of the figures mentioned in the chart vis-a-vis. the record already available with the department. 11. Vide ground Nos. 5 & 6 the grievance of the assessee relates to the submissions of the Form No. 10 during the course of assessmen....
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....orted at 360 ITR 598. 12.1. The A.O. however did not find merit in the submissions of the assessee and denied the claim of the assessee under section 11(2) of the Act by observing as under: 10. I have considered the reply of the assessee, however, the same is not acceptable. Section 11(2) of the Act was amended by the Finance Act, 2015 w.e.f. A.Y. 2016-17. The amended section is reproduced hereunder:- "(2) Where eighty-five per cent of the income referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, namely:-- (a) such person furnishes a statement in the prescribed form and in the prescribed manner to the Assessing Officer, stating the purpose for which the income is being accumulated o....
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....ting and implementing appropriate security, archival and retrieval policies in relation to Forms so furnished." Therefore, it is seen that w.e.f. A.Y. 2016-17, the assessee had to file form 10 electronically and by the due date mentioned in section 139 of the Act. 12. It is also pertinent to refer to the memorandum to Finance Bill, 2015 which brought this amendment, the relevant portion of which is reproduced hereunder:- "In order to remove the ambiguity regarding the period within which the assessee is required to file Form 10, and to ensure due compliance of the above conditions within time, it is proposed to amend the Act to provide that the said Form shall be filed before the due date of filing return of income specified under section 139 of the Act for the fund or institution. In case the Form 10 is not submitted before this date, then the benefit of accumulation would not be available and such income would be taxable at the applicable rate. Further, the benefit of accumulation would also not be available if return of income is not furnished before the due date of filing return of income. These amendments will take effect from 1st April, 2016 and wil....
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.... themselves that the assessee was prevented by reasonable cause from filing of applications in Form No. 9A and Form No. 10 within the stipulated time. Further, in respect of Form No. 10 the Commissioners shall also satisfy themselves that the amount accumulated or set apart has been invested or deposited in anyone or more of the forms or modes specified in sub-section (5) of section 11 of the Act. It is observed that the power for condoning the delay have been given to the Commissioner of Income Tax after considering the reasons and satisfying themselves that the assessee was prevented by reasonable cause from filing of application in form 9A and form 10 with the stipulated time. The assessing officer does not have the power to condone the delay in filing of form 10. The assessee has not brought on record whether it has obtained permissions from the concerned Commissioner of Income Tax to file form 10 belatedly. In view of these facts, the findings of the assessing officer are upheld. This ground of appeal is dismissed. 14. Now the assessee is in appeal. 15. The Ld. Counsel for the Assessee reiterated the submissions made before the authorities below and further subm....
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....ers Association [2001] 114 Taxman 255 (SC) * Trust for Reaching the Un-reached Through Trustee Vs. CIT (Exemptions), Ahmedabad [2021] 126 taxmann.com 77 (Gujarat) * Chandraprabhuji Maharaj Jain vs. Dy. CIT, (Exemptions), Chennai [2019] 110 taxmann.com 11 (Madras) * Commissioner of Income-tax-III, Pune Vs. Sakal Relief Fund [2017] 81 taxmann.com 396 (Bombay) * Commissioner of Income-tax Vs. Mayur Foundation [2005] 274 ITR 562 (Gujarat) * Shree Dadar Jain vs. ITO(E), [2019] 111 Taxmann.com 272 (Mumbai-Trib.) 16. In his rival submissions the Ld. DR strongly supported the orders of the authorities below and further submitted that the assessee did not furnish Form No. 10 electronically before filing of the return of income which is requirement under section 11(2) of the Act, therefore, the A.O. was fully justified in denying the claim of the assessee under section 11(2) of the Act and the Ld. CIT(A) was fully justified in confirming the action of the A.O. 17. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is not in dispute that as per section 11(2) of the A....
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....ns for condonation of delay in filing Return of Income and decide on merit. 3. For all other application for condonation of delay not mentioned above, the power of condonation of delay u/s. 119(2)(b) of the Act will continue with the respective authorities as per the extant Rules and Practice. 17.2. Earlier also a Circular No. 7/2018 dt. 20/12/2018 was issued by the CBDT which read as under: SECTION 119 OF THE INCOME-TAX ACT, 1961 - CONDONATION OF DELAY UNDER SECTION 119(2)(b) OF THE INCOME-TAX ACT, 1961 IN FILING OF FORM No. 10 AND FORM No. 9A FOR A.Y. 2016-17 CIRCULAR No. 7/2018 [F. No. 197/55/2018-ITA-I], DATED 20-12-2018 Under the provisions of section 11 of the Income-tax Act, 1961 (hereafter 'Act') the primary condition for grant of exemption to trust or institution in respect of income derived from property held under such trust is that the income derived from property held under trust should be applied for the charitable purposes in India. Where such income cannot be applied during the previous year, it has to be accumulated and applied for such purposes in accordance with various conditions provided in the section. 2. The F....
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....time. Further, in respect of Form No. 10 the Commissioners shall also satisfy themselves that the amount accumulated or set apart has been invested or deposited in any one or more of the forms or modes specified in sub-section (5) of section 11 of the Act. 17.3. From the aforesaid Circular it would be clear that in the genuine case of belated application in Form No. 10, the delay may be condone. In the present case the assessee furnished the Form No. 10 before completion of the assessment. 17.4. On a similar issue the Hon'ble Apex Court in the case of CIT Vs. Nagpur Hotel Owners' Association (supra) held as under: "It is abundantly clear from the wordings of sub-section (2) of section 11 that it is mandatory for the person claiming the benefit of section 11 to intimate to the assessing authority the particulars required, under rule 17 in Form No. 10. If during the assessment proceedings the Assessing Officer does not have the necessary information, the question of excluding such income from assessment does not arise at all. As a matter of fact, the benefit of excluding this particular part of the income from the net of taxation arises from section 11 and is s....