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TaxTMI 
TaxTMI 
TaxTMI 
2024 (11) TMI 143
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....he basis of facts and in the circumstances of the case, the Ld. Jt. CIT(Appeal) has erred in upholding the adjustments in the intimation order u/s 143(1) of the Act disregarding the fact that the said adjustment made is not covered u/s 143(1)(a) of the Act. 2.2 That on the basis of facts and in the circumstances of the case, the Ld. Jt. CIT (Appeal) failed to consider that the provisions in law requiring to file Form No. 10 within the specified due date of return filing under section 139(1) is directory and not mandatory. 2.3 That on the basis of facts and in the circumstances of the case, the Ld. It. CIT(Appeal) erred in upholding the disallowance pertaining to accumulation u/s 11(2) of Rs. 51,21,991/- despite all the conditions stipulated u/s 11(2) were satisfied. 2.4 That on the basis of facts and in the circumstances of the case, the Ld. It. CIT(Appeal) erred in upholding the Ld. AO-CPC jurisdiction u/s 143(1) to disallow the exemptions u/s 11 & 12 of the Income Tax Act, 1961, when the issue is debatable. 2. Briefly stated, facts of the case are that the assessee is a trust registered under the Provisions of the Income-tax Act and is engaged in providing education, m....
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.... the Act. For ready reference, section 11(2) of the Act is reproduced as under: (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 prescribed35 manner to the Assessing Officer, stating the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed five years; (b) the money so accumulated 36 or set apart is invested or deposited in the forms or modes specified in sub-section (5); (c) the statement referred to in clause (a) is furnished on or before the due date specified ....
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.... the due date of filing the return of income under sub-section (1) of section 139 of the IT Act. The relevant finding of Hon'ble Supreme Court is reproduced as under: "5. We have heard Shri Balbir Singh, learned ASG appearing on behalf of the Revenue and Shri S. Ganesh, learned Senior Advocate appearing on behalf of the assessee at length and perused the material on record. The short question which is posed for consideration of this Court is, whether, for claiming exemption under section 10B (8) of the IT Act, the assessee is required to fulfil the twin conditions, namely, (i) furnishing a declaration to the assessing officer in writing that the provisions of section 10B(8) may not be made applicable to him; and (ii) the said declaration to be furnished before the due date of filing the return of income under sub-section (1) of section 139 of the IT Act. 6. In the present case, the High Court as well as the ITAT have observed and held that for claiming the so-called exemption relief under section 10B (8) of the IT Act, furnishing the declaration to the assessing officer is mandatory but furnishing the same before the due date of filing the original return of income is direc....
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....nishing the return of income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of section 10B may not be made applicable to him, the provisions of section 10B shall not apply to him for any of the relevant assessment years", we note that the wording of the section 10B (8) is very clear and unambiguous. For claiming the benefit under section 10B (8), the twin conditions of furnishing the declaration to the assessing officer in writing and that the same must be furnished before the due date of filing the return of income under sub-section (1) of section 139 of the IT Act are required to be fulfilled and/or satisfied. In our view, both the conditions to be satisfied are mandatory. It cannot be said that one of the conditions would be mandatory and the other would be directory, where the words used for furnishing the declaration to the assessing officer and to be furnished before the due date of filing the original return of income under subsection (1) of section 139 are same/similar. It cannot be disputed that in a taxing statute the provisions are to be read as they are and they are to be literally construed, more pa....
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.... filing of the declaration subsequently and may be during the assessment proceedings would have made no difference also has no substance. The significance of filing a declaration under section 10B(8) can be said to be co-terminus with filing of a return under section 139(1), as a check has been put in place by virtue of section 10B (5) to verify the correctness of claim of deduction at the time of filing the return. If an assessee claims an exemption under the Act by virtue of Section 10B, then the correctness of claim has already been verified under section 10B (5). Therefore, if the claim is withdrawn post the date of filing of return, the accountant's report under section 10B (5) would become falsified and would stand to be nullified. 11. Now so far as the reliance placed upon the decision of this Court in the case of G.M. Knitting Industries (P.) Ltd. (supra), relied upon by the learned counsel appearing on behalf of the assessee is concerned, section 10B (8) is an exemption provision which cannot be compared with claiming an additional depreciation under section 32(1) (ii-a) of the Act. As per the settled position of law, an assessee claiming exemption has to strictly a....
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....iming the benefit under section 10B(8) of the IT Act, the twin conditions of furnishing a declaration before the assessing officer and that too before the due date of filing the original return of income under section 139(1) are to be satisfied and both are mandatorily to be complied with. Accordingly, the question of law is answered in favour of the Revenue and against the assessee. The orders passed by the High Court as well as ITAT taking a contrary view are hereby set aside and it is held that the assessee shall not be entitled to the benefit under section 10B(8) of the IT Act on non-compliance of the twin conditions as provided under section 10B(8) of the IT Act, as observed hereinabove. The present Appeal is accordingly Allowed. However, in the facts and circumstances of the case, there shall be no order as to costs." (emphasis supplied externally) 4.3 Thus, in view of the decision of Hon'ble Supreme Court, it is mandatory for the assessee to file the prescribed form No. 10 along with the return of income filed for the relevant year. 4.4 However, we noticed that the CBDT issued 3 circulars No. 15, 16 & No. 17 on 19th July 2020, whereby it authorized the Commissioners of I....