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TMI Blog2019 (11) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... d at the time of filing of the return under Section 139(1) of the Act is invalid cannot be upheld. It is trite law that the Tribunal is bound by the provisions of the Act and the Rules and has no power to declare any provisions of either the Act or Rules to be invalid or ultra vires. Therefore, the substantial question of law framed by this Court is answered in favour of the Revenue and it is held that the Tribunal was not correct in holding that in the absence of prescription of any time limit under Section 32 of the Act, the condition mentioned in the second proviso to Rule 5(1A) of the Rules to exercise the option with regard to depreciation at the time of filing of the return under Section 139(1) of the Act is invalid, is not correct. Impugned orders passed by the Tribunal insofar as it pertains to the finding that the second proviso to Rule 5(1A) of the Rules are ultra-vires is hereby set aside. - INCOME TAX APPEAL NO.100098 OF 2015, 100099 OF 2015 - - - Dated:- 15-10-2019 - THE HON BLE MR. JUSTICE ALOK ARADHE AND THE HON BLE MR. JUSTICE P.G.M. PATIL APPELLANT: SRI.Y.V. RAVIRAJ, ADVOCATE RESPONDENT: SRI.ASHOK A.KULKARNI AND SHR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Appellate Tribunal. The Tribunal, by an order dated 19.02.2015 has allowed the appeal preferred by the assessee and set aside the order of the Commission of Income Tax (Appeals). The Assessing Officer was further directed to allow depreciation as per Appendix I at the higher rates. The Tribunal, inter alia held that, Clause (i) of Section 32(1) of the Act empowers the rule making authority to prescribe the percentage on the actual cost for allowing the depreciation. It was further held that the aforesaid provision does not empower the rule making authority to put any other condition and rule making authority can prescribe time of exercising the option provided such power is entrusted by the provisions of the Act. Accordingly, the Tribunal held that the second proviso to Rule 5(1A) of the Rules is invalid. In the aforesaid factual background the Revenue has filed these appeals. 5. The learned counsel for the Revenue has invited the attention of this Court to Section 32 of the Income Tax Act and has submitted that in case of assets of an undertaking engaged in generation or generation and distribution of power, the depreciation shall be allowed on the actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expiry of the time allowed under sub-section (1) of section 139 for furnishing the return of income, in such form and manner as may be prescribed) be deemed to be income applied to such purposes during the previous year in which the income was derived; and the income so deemed to have been applied shall not be taken into account in calculating the amount of income applied to such purposes, in the case referred to in sub-clause (i), during the previous year in which the income is received or during the previous year immediately following, as the case may be, and, in the case referred to in sub-clause (ii), during the previous year immediately following the previous year in which the income was derived. Section 32(1) of the Act 32. (1) In respect of depreciation of (i) buildings, machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, Owned, wholly or partly, by the assessee and used for the purposes of the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required, under rule 17 in Form No.10 of the Rules. 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 subjected to the conditions specified therein. Therefore, it is necessary that the assessing authority must have this information at the time he completes the assessment. In the absence of any such information, it will not be possible for the assessing authority to give the assessee the benefit of such exclusion and once the assessment is so completed, in our opinion, it would be futile to find fault with the assessing authority for having included such income in the assessable income of the assessee. Therefore, even assuming that there is no valid limitation prescribed under the Act and the Rules even then, in our opinion, it is reasonable to presume that the intimation required under section 11 has to be furnished before the assessing authority completes the concerned assessment because such requirement is mandatory and w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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