2018 (8) TMI 1874 - AT - Income Tax

Accumulation u/s 11(2) denied - Form No.10 was not filed electronically - HELD THAT - There is no dispute with respect to the fact that the assessee had claimed and was entitled for accumulation of 1, 15, 00, 000/- u/s 11(2) of the Act but was denied this claim solely on the ground that Form No.10 was not filed electronically. According to the assessee attempts were made to upload the same electronically but due to technical glitches was unable to do so and therefore since it was left with no other option Form No.10 was filed before the AO manually on 0/09/2015 and receipt thereof was duly acknowledged. The assessee was left with no other option than to file Form No.10 manually with the AO when it became impossible to e file Form 10 electronically due to glitches and had reasonable cause to do so. All above facts are neither controverted nor disputed by Revenue. The ld.CIT(A) has recorded that on verification of all documents filed before him; including the copy of return in ITR-7 Form No.10 Audit in Form 10B computation of income and annexures thereto he has come to the finding that the crucial information/fact of the amount of accumulation as required in Form No.10 is already captured in the ITR-7. - Decided against revenue.

Summary

Issues:
Appeal against order of CIT(A) disallowing accumulation claim u/s 11(2) of the Income Tax Act for assessment year 2015-16.

Analysis:
1. Filing of Return and Disallowance by CPC:
- The assessee, a Trust under section 12A of the Income Tax Act, filed a return for assessment year 2015-16 declaring NIL income after setting aside an amount for future development.
- The Central Processing Centre disallowed the accumulation claimed by the assessee, recomputing the income at a higher amount.

2. Rectification Application and AO's Rejection:
- The assessee filed a rectification application under section 154 before the Assessing Officer (AO) seeking correction of the disallowed amount.
- The AO rejected the rectification application, leading to the assessee's appeal before the CIT(A).

3. CIT(A) Order and Grounds of Appeal:
- The CIT(A) allowed the accumulation claim under section 11(2) of the Act, citing relevant CBDT Circular and a Supreme Court decision.
- Revenue filed an appeal against the CIT(A) order, arguing that the assessee did not comply with the provisions of section 11(2) and Rule 17 by not filing Form No.10 electronically.

4. Appellate Tribunal Decision:
- The Tribunal considered the contentions of both parties and reviewed the provisions of section 11(2) and Rule 17.
- It noted that the assessee, despite attempting to file Form No.10 electronically, faced technical issues and thus filed it manually with the AO.
- The Tribunal found that the crucial information required in Form No.10 was already captured in the return filed by the assessee.
- Revenue failed to dispute the findings of the CIT(A), leading the Tribunal to uphold the decision and dismiss Revenue's appeal.

5. Conclusion:
- The Tribunal pronounced the order, dismissing Revenue's appeal for assessment year 2015-16, based on the findings and reasoning presented in the CIT(A) order, thereby affirming the allowance of the accumulation claim by the assessee.