2021 (9) TMI 1072

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....2. Accordingly, it filed its return of income declaring NIL claiming exemption u/s 11 & 12 of the Act. The AO completed the assessment u/s 143(3) on 30-03- 2007 determining total income of the assessee at Rs. 76,88,340/-. The assessee carried the matter to Ld CIT(A) and then to the ITAT. The Tribunal, vide its order dated 30-10-2009 passed in ITA No.482/Bang/2008 restored all the matters to the file of AO for passing fresh assessment order. Accordingly, the AO passed the impugned assessment order, wherein he determined the total income of the assessee at Rs. 76,88,340/-. The Ld CIT(A) gave partial relief and hence the assessee has filed this appeal in respect of above said three issues. 3. The first issue relates to assessment of maturity amount of fixed deposit as income of the assessee. The assessee has submitted "Receipts and Payments Account" before the AO, wherein the assessee has shown receipt of maturity proceeds of Fixed deposit kept with a bank amounting to Rs. 50.00 lakhs. The AO observed that the provisions of sec.11 use the expression "income" and not "total income". The expression "total income" has been defined u/s 2(45) of the Act as "the total amount of income as....

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....ome, even though it may not fall under the category of income under accounting principles. Thus, if a receipt does not possess the character of "income" in commercial/accounting sense, it cannot be categorised as income under the Income tax Act unless there is an express provision to treat the same as income. In that case, the said receipt is liable to be taxed as income under Income tax Act. 6. As stated earlier, sec.11 of the Act prescribes exemption from taxation of income of the charitable trust to the extent provided in that section, meaning thereby, all income of charitable trust is taxable except to the extent provided in sec.11. In view of the above, the concept of "income" has to be understood in terms of sec.2(24) and other provisions of the Act. Hence, the view expressed by the AO that the "Gross receipts excluding corpus donation" shall constitute the income of trust or institution is contrary to the provisions of Income tax Act. The "total income" has to be computed in the hands of a charitable trust in accordance with the provisions of sec.11 to 13 of the Act and the same also satisfies the definition of "total income" given u/s 2(45) of the Act. 7. We have noti....

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....n be allowed as application of income. With regard to remaining three items, the assessee has not furnished any detail before us also and further the assessee has not proved that they are in the nature of capital expenditure resulting in acquisition of any asset. Accordingly we confirm the order passed by Ld CIT(A) on this issue. 10. The last issue relates to rejection of Form no.10 filed by the assessee for accumulation of income u/s 11(2) of the Act. The Ld A.R submitted that the assessee did not furnish Form No.10 for accumulation of income before the assessing officer within the due date prescribed for filing return of income u/s 139(1) of the Act. However, before the conclusion of assessment proceedings, the assessee filed the Form No.10 dated 08-01-2007 before Ld CIT along with the petition requesting Ld CIT to condone the delay in filing Form No.10. However, the Ld CIT, vide his order dated 14.03.2007 passed u/s 119(2)(b) of the Act, refused to condone the delay, inter alia, for the reason that the assessee did not file application in Form No.10 before the AO. The AO also refused to allow accumulation of income u/s 11(2) for the reasons that the Ld CIT has refused to cond....

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....e has applied for condonation of delay before Ld CIT and the same was rejected by Ld CIT. The said fact has been noticed by the AO in the original assessment order also. Hence the copy of petition filed by the assessee along with Form no.10 is very much available with the AO during second round. 15. With regard to the delay in filing form no.10, we notice that the co-ordinate bench has expressed following view in the case of Ursuline Franciscan Congregation Generalate (ITA No. 1039/Bang/2017 dated 23.08.2021:- "11. We heard Ld D.R on this issue and perused the record. We notice that the Hon'ble Supreme Court has observed as under in the case of Nagpur Hotel Owners Association (supra):- "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 of the Act. If during the assessment proceedings the Assessing Officer does not have the necessary information, question of excluding such income from assessment does not arise at all. As a matter of fact, this benefit of excluding this particul....