2013 (6) TMI 886 - AT - Income Tax

Summary

Issues involved:
The issues involved in the judgment are:
1. Addition of income by CIT(A) against the appellant's admission of nil income.
2. Non-acceptance of Notice u/s 11(2) of the Income Tax Act, 1961 by the Assessing Officer.
3. Rejection of rectified Form No.10 by Ld CIT(A) despite filing by the appellant.
4. Denial of exemption of income for charitable trust u/s 11(1) and u/s 11(2) by lower authorities.
5. Legality of assessment order u/s 143(3) and appellate order.

Issue 1: Addition of income by CIT(A)
The appellant appealed against the addition of Rs. 42,75,263/- to the income assessed by the Ld Adll. CIT, Range-2, Muzaffarnagar, despite the appellant admitting nil income. The Ld CIT(A) confirmed this addition, leading to the appeal.

Issue 2: Non-acceptance of Notice u/s 11(2)
The Assessing Officer did not accept the appellant's Notice u/s 11(2) of the Income Tax Act, 1961, citing technical reasons such as the form not being in the specified format and lack of clarity on the purpose of accumulation of funds.

Issue 3: Rejection of rectified Form No.10
The appellant rectified the omission of mentioning Form No.10 before the Assessing Officer by filing it before Ld CIT(A) Muzaffarnagar. However, this rectification was rejected without valid reasons.

Issue 4: Denial of exemption for charitable trust
The authorities did not grant the benefit of exemption of income for the appellant's charitable trust u/s 11(1) and u/s 11(2) of the Income Tax Act, 1961. The appellant argued for the allowance of general exemption of 15% of 'Income from property held for charitable or religious purposes' as per sec. 11(1) of the Act.

Issue 5: Legality of assessment and appellate orders
The appellant challenged the legality of the assessment order u/s 143(3) of the Income Tax Act, 1961 dated 1.4.2010 and the subsequent appellate order dated 3.8.2013, alleging they were against the law and facts.

This judgment highlights the importance of complying with prescribed forms and procedures under the Income Tax Act, especially concerning charitable trusts and accumulation of funds for specific purposes. The Tribunal emphasized the need for proper documentation and adherence to statutory requirements to claim exemptions and deductions effectively.