TaxTMI 
TaxTMI 
2023 (7) TMI 1145
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....appeal of the assessee and deleting the disallowance of Rs. 2,05,11,280/- made by the AO on account of accumulation of fund ignoring the fact that even during the assessment proceedings, in Form 10, complete details were not provided to the AO" iii. "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in granting condonation for Audit Reports & for accumulation in form 10&10B, while ld. CIT(A) does not have any right for same" iv. "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in allowing accumulation under 11(2), while there was not conscious accumulation by assessee, no earmarking fund in Balance sheet, no separate investments, not indicating specific purposes, no proper resolution" v. "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in relying the decision prior to change in Act & Rules, which now make mandatory to file same before one months filing IT. Returns" 2.1 Apropos ground No. (i) to (v) of the Revenue, the facts as emerges from the order of the ld. CIT(A) are as under:- 5.3.1 Issue 1: Delay in filing Form 10/10B: For....
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....iled below. (i) In the case of CIT vs. Rai Bahadur Bissesswarlal Motilal Malwasie Trust (1992) 195 ITR 825, the Calcutta High Court has affirmed that the requirement of filing the audit report with the return is merely a procedural requirement, and that exemption cannot be denied so long as the report is available to the assessing officer before the completion of assessment (ii) In the case of Calcutta Management Association vs. ITO (1992) 42 ITD 62 the Calcutta bench of the Tribunal held that the Audit Report can even be filed at the time of appeal before the Commissioner (Appeals). (iii) On a similar issue the Hon'ble Supreme Court in the case of CIT vs. Nagpur Hotel Owners Association [2001] 114 Taxman 255 (SC) held "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 exclu....
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....assessee submitted the audit report at a later stage after filing the return of income. The benefit of exemption under section 11 cannot be denied merely on account of delay in furnishing audit report. 5.3.6 Issue 2: Not indicating specific purpose/purposes for which the fund was accumulated. The assessing officer in the assessment order made following remarks regarding the above issue: "The assessee's submission has been considered but not found acceptable in view of provisions of section 11(2)(a) of the LT Act, 1961 wherein it is clearly mentioned that the organization/trust must indicate specific purpose or purposes for which it wants to accumulate the funds A general decision to accumulate listing all the objects of the organization would not be sufficient. The resolution in respect in respect of accumulation of fund was also passed on 15.12.2015. Thus the Form No. 10 furnished on 04.01.2016 for accumulation of Rs. 45.96,956/- u/s 11(2) is denied and calculated taxable income accordingly. In this regard, it is relevant to re-produce the provisions of section 11(2)(a) as under:- "Income from property held for charitable or religious purposes: (2) Where (eighty-fi....
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....ne to entertain the appeal. The same is dismissed." Thus respectfully following the above judgments, the addition made by the assessing officer in the order under section 143(3) of the IT Act 1961 dated 23.11.2016 amounting to Rs. 2,05,11,280/- is ordered to be deleted. In view of the above discussion, the ground no. 2 raised by the appellant is allowed.'' 2.2 During the course of hearing, the ld. DR opposed the order of the ld. CIT(A) for which the Bench required the ld. DR to submit case laws countering the ld. CIT(A) case laws as mentioned in his order in the case of the assessee but the ld. DR did not file the case laws. It is also noted that the ld. DR did not advance any written submission controverting the findings of the ld. CIT(A) except relying on the order of the AO. 2.3 On the other hand, the ld.AR of the assessee relied upon the decision of the ld. CIT(A). 2.4 We have heard both the parties and perused the materials available on record. In this case, the ld. CIT(A) has narrated about the two issues i.e. Issue No. 1 which pertains to delay in filing Form 10/10B and Issue No. 2 which pertains to non-indicating specific purpose/ purpose for which the fund was accumul....
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....should not be denied the benefit of claiming exemption under section 11 and 12 of the Act. Some of the case laws are mentioned as under. (i) In the case of CIT vs. Rai Bahadur Bissesswarlal Motilal Malwasie Trust (1992) 195 ITR 825, the Calcutta High Court has affirmed that the requirement of filing the audit report with the return is merely a procedural requirement, and that exemption cannot be denied so long as the report is available to the assessing officer before the completion of assessment (ii) In the case of Calcutta Management Association vs. ITO (1992) 42 ITD 62 the Calcutta bench of the Tribunal held that the Audit Report can even be filed at the time of appeal before the Commissioner (Appeals). (iii) On a similar issue the Hon'ble Supreme Court in the case of CIT vs. Nagpur Hotel Owners Association [2001] 114 Taxman 255 (SC) held "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 inform....
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....ome Tax Act, 1961. The ld. CIT(A) further observed that it was merely a procedural lapse on part of assessee to not file Form 10 alongwith return of income. The ld. CIT(A) thus observed that the assessee submitted the audit report at a later stage after filing the return of income and thus the benefit of exemption under section 11 of the Act cannot be denied merely on account of delay in furnishing audit report. We found that the observation of the ld. CIT(A) does not suffer from any infirmity and we find no reason to interfere in the order of the ld. CIT(A). As regards the next issue of not indicating specific purpose/purposes for which the fund was accumulated. It is noted from the ld. CIT(A) order wherein the assessing officer in the assessment order made following remarks regarding the issue in question (supra): "The assessee's submission has been considered but not found acceptable in view of provisions of section 11(2)(a) of the LT Act, 1961 wherein it is clearly mentioned that the organization/trust must indicate specific purpose or purposes for which it wants to accumulate the funds A general decision to accumulate listing all the objects of the organization would no....