9911796707
TMI Blog2022 (4) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 143(3). 4. That the Ld. CIT(A) has erred both in facts and in law while confirming the alternate ground rejected by the assessing officer, for not allowing accumulation of income of Rs. 21,23,372/- u/s 11(2) of the Act since Form 10 was filed beyond the time prescribed under the Act but before the finalization of assessment made under section 143(3) . 5. That Ld. CIT(A) has erred both in fact and in law by not accepting Form 10 for accumulation of Income under section 11 (2) filed during the course of assessment proceedings. 6. That the Ld. CIT(A) has erred both in facts and in law holding that delay in filing Form 10 can only be considered by the CIT and no application was made by the assessee. 7. That the Ld.CIT(A) has erred in holding the action of the AO that case laws filed by the assessee are not linked to the findings in this case. The appellant prays leave to add, alter, omit or substitute any or all of the above grounds of appeal, at any time before or at the time of hearing." FACTS OF THE CASE 2. Facts giving rise to the present appeal are that the assessee filed its return of income on 27.09.2016 declaring a taxable income of Rs.NIL. Subsequently, the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst this income, the assessee society had claimed an expenditure of Rs. 1,90,63,461/-. After claiming deduction of 15% u/s 11(1) of the Act, it had a surplus of Rs. 21,23,372/- out of which Rs. 19,55,651/- was claimed to be set off against the deficit of earlier year and the balance amount of Rs. 1,67,721/- was accumulated u/s 11(2) of the Act. Ld. Counsel for the assessee submitted that due to change in law regarding the mandatory filing of Form No.10 electronically w.e.f. Assessment Year 2016-17 which was inadvertently escaped the knowledge of the assessee society. The said form for the accumulation was filed electronically on 28.03.2018. However, by way of abundant caution, request for the accumulation of the entire surplus amount of Rs. 21,23,372/- was made. Ld. Counsel for the assessee submitted that the assessee society had requested for the accumulation of the entire surplus incase the deficit of earlier year was not allowed to be set off by the Assessing Officer since he had not allowed a similar claim in the previous year. He further contended that during the course of electronically conducted assessment proceedings, the request of the assessee was disallowed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, any claim for giving the benefit of section 11 on the basis of information supplied subsequent to the completion of assessment would mean that the assessment order will have to be reopened." I find that the Assessing Officer did not consider this part of the judgement hence, the order of the assessing authority is erroneous. It is also noticed that Ld.CIT(A) on this issue has merely affirmed the view of the AO without adverting to the submissions of the assessee. This approach of the authorities below is contrary to the binding precedents. Undisputedly, the assessee had filed Form No.10 before the completion of assessment. 10. Now, coming to the issue regarding setting off of the earlier year excess utilization of funds. Ld. Counsel for the assessee placed reliance on the judgement of the Hon'ble Delhi High Court rendered in the case of Director of Income Tax vs Raghuvanshi Charitable Trust 197 Taxman 170 (Delhi). The Hon'ble High Court answered the question in favour of the assessee that "whether a trust can be allowed to carry forward the deficit of current year and to set off of same against the income of subsequent years; in favour of the assessee and further question whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no limitation in section 11, which provides that the income should have been applied for charitable or religious purposes 'only' in the year in which the income has arisen. This, according to the learned counsel, was a wrong premise and contrary to the expression of provision contained in section 11(1)(c) read with Explanation and section 11(1)(c) categorically suggests to the contrary, viz., the income has to be applied for charitable or religious purposes 'only' in the year in which it has arisen. However, we find that the Gujarat High Court has discussed this issue in greater detail and relying upon the Circular No. 100, dated 24-1-1973 Issued by the Central Board of Direct Taxes and the judgment of the Rajasthan High Court in the case of CIT v. Maharana of Mewar Charitable Foundation [1987] 164 ITR 439. We may also point out at this state that the aforesaid view of Rajasthan High Court and Gujarat High Court has been consistently followed by other High Courts in the following judgments: (i) CIT v. Institute of Banking Personnel Selection (IBPS) [2003] 264 ITR 110 (Bom.); (ii) Siddaramanna Charities Trust v, CIT [1974] 96 ITR 275 (Mys.); and iii) CIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
