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TMI Blog2014 (11) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... and after verifying the books of account and other details, assessment in case of assessee was completed u/s 143(3) of the Act vide order dated 28/08/08 accepting the income returned. Much after completion of the assessment, AO on examining the records noticed that as per the computation of income filed along with return of income, assessee had accumulated Rs. 98,76,511 over and above the mandatory accumulation of 15% of the gross receipts, which was set off against the excess utilization in earlier years. However, as assessee has not filed Form No. 10 as prescribed u/s 11(2) for accumulation or set apart of more than 15% of the receipts, AO was of the view that there is escapement/under assessment of income in terms of section 147. Accordingly, after recording reasons to that effect, AO issued a notice u/s 148 of the Act on 28/03/12. In response to the said notice, assessee, though, initially requested AO to treat the return originally filed to be a return in response to the notice u/s 148, but, subsequently on 24/07/12, filed a return of income and requested AO to treat it as return in response to notice u/s 148. Along with the said return of income, assessee also furnished a ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceeding, but, if the assessment proceeding is completed, assessment cannot be reopened for facilitating filing of Form No. 10 by assessee. It was submitted that, however, if the assessment is already reopened there is no hindrance in filing Form No. 10 in course of such proceeding. It was contended that once assessment is reopened it also becomes pending assessment and in course of such assessment proceeding, assessee can file Form No. 10. In support of such contention, assessee also relied upon certain judicial precedents. Learned CIT(A) after considering the submissions of assessee, held that as per the observation of the Hon'ble Supreme Court in CIT Vs. Nagpur Hotels Owners Association, Nagpur (supra), any claim for giving benefit of section 11 on the basis of information supplied subsequent to the completion of assessment would mean that assessment will have to be reopened. In other words, reopening cannot be a means to facilitate filing of intimation. She observed that if assessee's claim is to be accepted, it would lead to a situation where an assessee in whose case notice u/s 148 has not been issued would have no opportunity to file Form No. 10 whereas another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, Form No. 10 filed in course of reassessment proceeding cannot be accepted. 8. We have considered the submissions of the parties and perused the materials on record as well as orders of revenue authorities on this issue. We have also carefully applied our mind to the decisions cited by the parties. It is very much clear from the assessment order as well as the order of learned CIT(A) the only ground on which Form No. 10 filed by assessee has been rejected is that the same cannot be filed during reassessment proceeding. While coming to such conclusion, AO as well as learned CIT(A) have relied upon a decision of Hon'ble Supreme Court in case of CIT Vs. Nagpur Hotels Owners Association, Nagpur (supra). However, on going through the aforesaid judgment of the Hon'ble Supreme Court, it becomes clear that facts in the said case are totally different. In case of CIT Vs. Nagpur Hotels Owners Association, Nagpur (supra), after completion of assessment, assessee submitted Form No. 10 before AO. Therefore, the Hon'ble Supreme Court held that if during assessment proceeding, AO does not have necessary information the question of excluding such income does not arise at all. In the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where reassessment is made under s. 147 in respect of income which has escaped tax, the ITO's jurisdiction is confined to only such income which has escaped tax or has been underassessed and does not extend to revising, reopening or reconsidering the whole assessment or permitting the assessee the reagitate questions which had been decided in the original assessment proceedings. It is only the underassessment which is set aside and not the entire assessment when reassessment proceedings are initiated. The ITO cannot make an order of reassessment inconsistent with the original order of assessment in respect of matters which are not the subject matter of proceedings under s. 147. An assessee cannot resist val idly initiated reassessment proceedings under this section merely by showing that other income which had been assessed originally was at too high a figure except in cases under s. 152(2). The words "such income" in s. 147 clearly refer to the income which is chargeable to tax but has "escaped assessment" and the ITO's jurisdiction under the section is confined only to such income which has escaped assessment. It does not extend to reconsidering generally the concluded e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of the present case are considered in the light of the propositions laid down by the Hon'ble Supreme Court as aforesaid, it can be seen that assessee has claimed accumulation/setting apart excess income in the return of income filed originally and AO also accepted such claim of assessee while completing the original assessment. AO never raised the issue of non-filing of Form No. 10 nor he rejected assessee's claim of exemption u/s 11 in respect of accumulated income. Therefore, there was no occasion for assessee earlier to file Form No. 10. Therefore, when assessment was reopened for assessing escaped income on account of non furnishing of Form No. 10, it can be said that furnishing of Form No. 10 is relatable to escaped income sought to be assessed. Hence, even as per the ratio laid down by the Hon'ble Supreme Court in case of Sun Engineering Works (supra), assessee is eligible to furnish Form No. 10 in course of reassessment proceeding. Further, as rightly contended by the learned AR, this is not a fresh claim made by assessee. Accumulation/setting apart of excess income is already disclosed/shown by assessee in the return of income originally filed and was also examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court noticed that the Act did not contemplate such reopening of the assessment. The learned counsel for the revenue relied on this portion o the finding of the Supreme Court to contend that during reassessment proceedings, the said Form-10 could not be furnished by an assessee. However, we have to keep in mind the fact that while reopening of an assessment cannot be asked for by the assessee on the ground that he had not furnished the Form-10 during the original assessment proceedings, this does not mean that when the revenue reopens the assessment by invoking section 147 of the said Act, the assessee would be remediless and would be barred from furnishing Form-10 during those assessment proceedings. Consequently, in so far as the second question is concerned and with regard to the appeal Nos. 524/2012, 525/2012 and 526/2012, the same has to be answered in favour of the assessee/appellant and against the revenue. However, with regard to the ITA No. 523/2012 because the Form-10 was filed only before the Tribunal, the question has to be decided, in that appeal, against the assessee and in favour of the revenue." 9.3 As the ratio laid down by the Hon'ble Delhi High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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