1999 (10) TMI 86 - AT - Income Tax

Summary

Issues:
1. Tribunal's failure to consider the ground raised by the assessee regarding the disallowance of the claim for accumulation of income under s. 11(2) of the IT Act in a common order for multiple assessment years.

Analysis:
The assessee filed a miscellaneous application challenging the Tribunal's common order for various assessment years, contending that the Tribunal did not address the ground related to the disallowance of the claim for accumulation of income under s. 11(2) of the IT Act. The AO rejected the applications for accumulation of income, stating they were filed late and not with the returns of income. The assessee argued that the specific ground under s. 11(2) was raised before the CIT(A) and the Tribunal, but was not adjudicated upon. The Tribunal acknowledged the mistake and agreed to rectify it.

The learned counsel for the assessee reiterated that the issue regarding the rejection of the application under s. 11(2) was indeed argued during the hearing, supported by a synopsis of arguments and judicial authorities cited. On the contrary, the Departmental Representative argued against reopening matters already considered or decided by the Tribunal, citing relevant case laws to support their stance.

After careful consideration, the Tribunal found an apparent mistake in its order as the ground related to the maintainability of the application for accumulation of income under s. 11(2) was not addressed, despite being raised and argued during the appeal hearings. The Tribunal accepted the assessee's application for rectification and proceeded to adjudicate the issue for the relevant assessment years.

Regarding the interpretation of s. 11(2) of the IT Act, the Tribunal explained that it allows accumulation of income for specified purposes without prescribing a specific time limit for filing the notice or making investments. The Tribunal referred to various judicial decisions supporting the view that the time limits specified under the rules are directory and not mandatory.

In conclusion, the Tribunal allowed the miscellaneous applications, ruling in favor of the assessee on the issue of claiming exemption under s. 11 by fulfilling the requirements of s. 11(2) for the assessment years in question. The Tribunal emphasized that the assessee had complied with the provisions of s. 11(2) by filing Form No. 10 before the completion of assessments by the AO, thereby justifying the claim for exemption under s. 11.

This detailed analysis highlights the procedural and substantive aspects of the Tribunal's judgment, addressing the issues raised by the assessee and the legal interpretations of relevant provisions and case laws.