2021 (3) TMI 1035 - HC - Income Tax

Exemption u/s 11- Power of AO to consider revised Form 10 - accumulation of income - AO did not consider the revised Form 10 as the jurisdiction vests only with the Commissioner of Income Tax and not with the Assessing Office - Tribunal held that revised Form 10 for accumulation of income can be furnished in the course of assessment proceedings before the Assessing Officer and there is no bar prohibiting the appellant from modifying the figure in the application and the Assessing Officer can consider the revised Form 10 and allow the accumulation of income ? - HELD THAT - As relying on ratio laid down in the Judgment Simla Chandigarh Diocese Society 2009 (8) TMI 103 - PUNJAB AND HARYANA HIGH COURT it is clear that if Form 10 is filed within the stipulated time and during the course of assessment proceedings before the Assessing Officer, there is no bar prohibiting the assessee from modifying the figure in the application. Only in the case of revised Form 10 being filed after the assessment proceedings, the same cannot be accepted. The said ratio laid down by the Hon'ble Supreme Court supports the case of the assessee. Nagpur Hotel Owners'Association 2000 (12) TMI 99 - SUPREME COURT It is not in dispute that the assessee filed Form 10 within the stipulated time. Since the Assessing Officer disallowed the claim of application in respect of the depreciation, it filed a revised Form 10 enhancing the claim. The very intention of the assessee is to accumulate the surplus for the subsequent years. As per the ratio laid down in the Judgment reported in 2009 (8) TMI 103 - PUNJAB AND HARYANA HIGH COURT modified Form 10 may be furnished in the course of assessment proceedings and there is no specific bar prohibiting the assessee from modifying the figure of application.

Summary

Issues:
Interpretation of whether revised Form 10 for accumulation of income can be furnished during assessment proceedings before the Assessing Officer and if there is any prohibition on modifying the figure in the application.

Detailed Analysis:

1. Issue of Revised Form 10 Submission: The primary issue in this case revolves around the acceptance of a revised Form 10 for accumulation of income during the assessment proceedings. The respondent trust initially filed Form 10 seeking accumulation of income, and later submitted a revised Form 10 to increase the amount for infrastructure development. The Assessing Officer initially rejected the revised form, citing jurisdictional constraints. However, both the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal upheld the validity of submitting a modified Form 10 during assessment proceedings.

2. Legal Basis for Acceptance: The judgment referred to Section 11 of the Income Tax Act, which outlines conditions for excluding income from taxation for charitable or religious purposes. It emphasizes the mandatory requirement for the taxpayer to provide necessary information to the Assessing Officer using Form 10. The judgment clarifies that the Assessing Officer must have this information during assessment to exclude the specified income. Failure to provide such details would result in the inclusion of the income for taxation purposes.

3. Precedent and Applicability: The legal argument presented in the case draws upon a judgment from the Punjab and Haryana High Court and a Supreme Court ruling. These cases support the notion that the submission of Form 10 with modifications during assessment proceedings is permissible. The Supreme Court's decision highlights the importance of timely submission of required information for claiming exemptions under Section 11, reinforcing the need for compliance before the completion of assessment.

4. Assessee's Compliance and Intention: The court noted that the assessee timely filed the initial Form 10 and later revised it to increase the accumulation of income. The intention behind the modification was to accumulate surplus for future years, aligning with the purpose of the provision. Considering the legal precedents and the assessee's compliance, the Tribunal and the Commissioner's decisions to allow the modified Form 10 were deemed appropriate and justified.

5. Conclusion: Based on the analysis of the legal provisions, precedents, and the actions of the assessee, the court concluded that there was no legal ground or substantial question of law to challenge the decisions of the Tribunal. Consequently, the Tax Case Appeal was dismissed, affirming the validity of submitting a revised Form 10 during assessment proceedings for accumulation of income.

This detailed analysis of the judgment highlights the legal intricacies involved in interpreting the acceptance of revised Form 10 during income tax assessment proceedings, emphasizing compliance with statutory requirements and relevant case law.