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TMI Blog2016 (4) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer under section 147 of the Act by issuing the impugned notices under section 148 is, therefore, without any authority of law. Consequently, the impugned notices cannot be sustained. Insofar as assessment year 2008-09 is concerned, there is an additional factor which renders the impugned notice unsustainable. As pointed out by the learned counsel for the petitioner, for assessment year 2002-03, the petitioner had filed computation showing surplus of ₹ 95,917 only and for this it had filed Form No.10. Evidently, therefore, the Assessing Officer has not properly verified the facts from the record of assessment. This court in Sagar Enterprises v. Assistant Commissioner ( 2001 (12) TMI 18 - GUJARAT High Court ) has held that when the officer concerned has taken into consideration an irrelevant fact, it cannot be said with certainty as to which factor would have weighed with him for the purpose of arriving at the belief that income chargeable to tax has escaped assessment and to what extent the decision is vitiated. The Assessing Officer, having taken into consideration facts which are contrary to the record for the purpose of forming the belief that income chargeable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 of the Act, the assessment for assessment year 2012-13 is sought to be reopened. 4. The reasons for reopening of assessments are that as per section 11(2)(a) of the Act, the trust is required to file Form No.10 prescribed under rule 17 along with the resolution of the trust passed by the trustees of the trust clearly mentioning the intention of the trust for which such an accumulation has been done before the Assessing Officer on or before the stipulated time allowed as per section 139(1) of the Act. For the above referred assessment years, the assessee had not filed Form No.10 resolution on or before the time allowed under section 139 of the Act. Moreover, the time of five years allowed under section 11(2) had also elapsed. In view of the aforesaid, the amounts as mentioned in the reasons recorded, have been treated as chargeable to tax under section 11(2) of the Act for the assessment years in relation to which the impugned notices under section 148 of the Act have been issued. 5. Upon receipt of the said notices, the petitioner submitted its objections to the reasons recorded for reopening the assessments which came to be rejected vide separate orders dated 22.09.2015. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years under consideration because of non-spending within the five years. It was reiterated that in relation to assessment year 2008-09, the Assessing Officer has proceeded on the basis of wrong facts for the purpose of being satisfied that income has escaped assessment. Under the circumstances, issuance of notice for reopening the assessment is bad in law. 6.2 In relation to the subsequent assessment years, it was pointed out that in the computation of income the net result is not surplus but deficit and therefore, the provisions of section 11(2) of the Act would not apply. It was further submitted that the assessment is sought to be reopened on the ground that in the relevant year, the petitioner (assessee) had not filed Form No.10. According to the learned counsel, if Form No.10 has not been filed in respect of accumulated income, then there was no question of complying with the conditions of section 11(2) of the Act and hence, on the grounds stated in the reasons recorded, the Assessing Officer could not have formed the opinion that any income chargeable to tax has escaped. It was, accordingly, urged that assumption on the part of the Assessing Officer by issuance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : During the course of assessment proceedings pertaining to A.Y. 2011-12, on verification of the submission made by the A.R. of the assessee trust, it came to notice that assessee trust has filed return of income for A.Y. 2002-03 declaring income of ₹ 10,77,884/-. Computation of income for the said A.Y. 2002-03 reveals that total income of the trust is of ₹ 10,77,884/-, out of which an amount of ₹ 9,31,331/- was accumulated and shown as an amount to be accumulated/set apart for future application towards the object of the trust. As per section 11(2)(a) of the Income Tax Act, the trust is required to file Form No.10 prescribed under Rule 17 along with the resolution of the trust passed by the trustees of the said trust clearly mentioning the intention of the trust for which such an accumulation has been done before the Assessing Officer on or before stipulated time allowed as per section 139(1) of the Act. The information mentioned in the reply received during the assessment proceeding for A.Y. 2011-12 from the assessee trust on 19.03.2014 in response to notice u/s 142(1) dated 18.03.2014 reveals that trust has not filed Form No.10 resolution on or before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the conditions stipulated thereunder are complied with, namely: (a) such person specifies, by notice in writing given to the Assessing Officer in the prescribed manner, the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed ten years; (b) the money so accumulated or set apart is invested or deposited in the forms or modes specified in sub-section (5). Sub-section (3) of section 11 of the Act, inter alia, provides that any income referred to in sub-section (2) which is not utilized for the purpose for which it is so accumulated or set apart during the period referred to in clause (a) of that sub-section or in the year immediately following the expiry of such period, shall be deemed to be the income of such person in the previous year in which it ceases to be so accumulated or set apart. 11. In the facts of the present case, the Assessing Officer has reopened the assessment unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sums referred to in the reasons recorded by the Assessing Officer, without following the procedure prescribed under section 11(2) (b) of the Act for setting apart or accumulation of funds, such amounts would be the income of the said assessment years and ought to have been taxed in those assessment years. This view is fortified by the decision of the Supreme Court in Commissioner of Income-tax, Vidarbha, Nagpur v. Nagpur Hotel Owners Association, Nagpur, (2001) 2 SCC 128, wherein the court has held thus: 6. It is abundantly clear from the wordings of subsection (2) of Section 11 that it is mandatory for the person claiming the benefit of Section 11 to intimate to the assessing authority the particulars required, under Rule 17 in Form 10 of the Act. If during the assessment proceedings the Assessing Officer does not have the necessary information, question of excluding such income from assessment does not arise at all. As a matter of fact, this benefit of excluding this particular part of the income from the net of taxation arises from Section 11 and is subject to the conditions specified therein. Therefore, it is necessary that the assessing authority must have this informa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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