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2023 (12) TMI 414 - HC - Income TaxReopening of assessment - Exemption u/s 11 denied - notice after 4 years from the end of the relevant assessment year - revenue rejected the objections raised by the petitioner primarily on the ground that Form-10 was not submitted by the petitioner before the due date of filing of return u/s 139 (1) - whether factual aspect of late receiving of Form-10 came to the knowledge of the Assessing Officer on a later date and accordingly amounts to new material? - HELD THAT - Form-10 under Rule 17 of the Rules is required to be filed before the Assessing Officer before he completes the assessment. In a case, where Form-10 is filed late but is filed before the Assessing Officer completes the assessment, benefit of Section 11(2) of the Act shall be available to the assessee. From a reading of impugned notice, and assessment order it appears that the Assessing Officer has paid no heed to the ratio laid down in the judgment of the Supreme Court Nagpur Hotel Owners Association 2000 (12) TMI 99 - SUPREME COURT and various High Courts . Moti Ram Gopi Chand Charitable Trust, Sakal Relief Fund 2013 (12) TMI 609 - ALLAHABAD HIGH COURT . We, accordingly, have no hesitation in holding that the entire process of reassessment that has been initiated by the Department holds no water and is without any legal basis whatsoever. We quash the notice issued under Section 148 - Decided in favour of assessee.
Issues Involved:
1. Validity of reassessment proceedings initiated under Section 148 of the Income Tax Act. 2. The requirement and timing of filing Form-10 under Section 11(2) of the Income Tax Act. Summary: Issue 1: Validity of reassessment proceedings initiated under Section 148 of the Income Tax Act The petitioner challenged the reassessment proceedings initiated by the Income Tax Department under Section 148 of the Income Tax Act, contending that the reassessment was based on a change of opinion regarding the belated filing of Form-10 for the assessment year 2013-14. The petitioner argued that the reassessment proceedings were barred by limitation as there was no failure on their part to disclose all material facts necessary for the assessment. The court noted that the reasons recorded for initiating the reassessment proceedings did not constitute new information but were a review of the already concluded assessment. The court referenced the Supreme Court's decision in CIT Vs. Kelvinator of India Ltd. and other judicial pronouncements to support the claim that the reassessment was based on a change of opinion. Issue 2: The requirement and timing of filing Form-10 under Section 11(2) of the Income Tax Act The petitioner argued that the belated filing of Form-10 should not disqualify them from claiming exemption under Section 11 of the Act, as several judicial pronouncements have held that such a form can be accepted if filed during the assessment proceedings. The court referenced judgments from the Supreme Court and various High Courts, including CIT Vs. Moti Ram Gopi Chand Charitable Trust and Commissioner of Income-tax Vs. Nagpur Hotel Owners' Association, which held that Form-10 should be filed before the completion of the assessment proceedings and that the delay in filing can be condoned. The court concluded that the Assessing Officer had not considered these judicial precedents and had acted without any legal basis in rejecting the petitioner's Form-10 and initiating reassessment proceedings. Conclusion: The court quashed the notice dated 31.03.2021 issued under Section 148 of the Act, the order rejecting the petitioner's objections dated March 3, 2022, and the reassessment order dated March 19, 2022. The writ petition was allowed, and the court held that the entire process of reassessment initiated by the Department was without any legal basis.
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