9911796707
TMI Blog2023 (8) TMI 1620X X X X Extracts X X X X X X X X Extracts X X X X ..... AO beyond the permissible limit as per Income Tax Act. Accordingly, ld. CIT(E) issued show cause notice u/s 263 of the Act to the assessee by stating as follows: "i. In the return of income Rs. 10,91,395/- was claimed to be accumulated/set apart u/s 11(2). No Form 10 was filed electronically. However, as per conditions mentioned in Section 13(9), the benefit of section 11(2) cannot be granted in cases where Form 10 has not been filed / has been filed beyond due date as prescribed u/s. 139(1). However, in assessment, the Assessing Officer has wrongly allowed Rs. 5,67,896/- as exemption u/s. 11(2). ii. In schedule I of Return of Income, balance amount accumulated in AY 2011-12 has been shown as Rs. 23,25,478/-. The assessee claimed Rs. 14,74,428/- towards purchase of fixed assets in FY 2015-16 towards application of amount set apart in AY 2011-12. As per Balance Sheet, there was addition to fixed assets to the tune of Rs. 7.05,985/- which was claimed as application in computation of income for the AY 2016-17. As such, accumulated amount of Rs. 23,25,478/- remained unutilized. Since 5 years have elapsed from the year of accumulation, the unapp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of AY 2016-17 where such form 10 is fled after the expiry of the time allowed under the relevant provisions of the Act. Form 10 submitted manually before the AO during the assessment proceedings was inadvertently left unsigned. Therefore to fulfil the requirement of the Act, we have now filed the Form 10 online on 08.02.2021. Therefore, the exemption u/s 11(2) shall not be denied since the requirement of law to file the return and Form 10 has been complied with" The explanation of the assessee perused and found not acceptable. It is reasonable to presume that the intimation required under Section 11 has to be furnished in the mode and manner prescribed in the section 11(2) read with rule 12(2), because such requirement is mandatory and without the particulars of the assessee's income, the Assessing Officer cannot entertain the claim of the assessee under Section 11. Further, in view of the requirements of Section 13(9) the action of the A.O. in allowing accumulation u/s 11(2) in the case of late filing of form 10 is clearly erroneous and prejudicial to the interest of revenue. Therefore, the irrefutable conclusion is that not only the A.O. did not examine the correctness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and expenditure account nor included in its total income in its computation of income. As per balance sheet, during the F.Y. 2014-15, total specific fund received by the assessee was Rs. 32,83,170/-. Amount utilized during the year was Rs. 24,86,458/-. The balance fund of Rs. 7,96,712/- was neither shown in its Income & Expenditure account nor in computation of income. In F.Y. 2015-16, no specific fund was received by the assessee but claimed Rs. 13.85.984/- from these fund. Hence, assessee contention to take the specific fund in its income and offered for tax is not justifiable. Principally any amount credited to Reserve & Surplus is i formed out of surplus income, which is generated out of income exempted in a case covered by exemption u/s 11. Since the Reserve & Surplus account is not formed out of any income offered for tax, further allowability would resulted in double exemption. In view of above facts, claim of Rs. 13.85,984/- as an application from specific fund should not be an allowable application. The issue is therefore set aside and restore back to the assessing officer to pass an order considering the fact discussed above and compute the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee u/s 11(2) of the Act. 6. In respect of another issue as alleged by the ld. CIT(E) regarding accumulated amount of Rs. 23,25,478/-, the ld. AR submitted that there was a mistake while filing up schedule I submitted along with Return of Income (RoI) and after realizing the mistake by rectifying the same and filed a copy before the ld. CIT(E) in this regard. However, it has been ignored by the ld. CIT(E) while passing the impugned order. The ld. AR drew our attention to the page 26 of the paper book which is reflected as Schedule-I to RoI, column 4, where the mistake had happened while entering figure by assessee under column 4 which reads "Amount applied for charitable/religious purposes upto the beginning of the previous year." The assessee inadvertently shown a wrong figure before the ld. AO and from the perusal of the aforesaid fact, we find that assessee had applied the fund as per the revised schedule by rectifying the same and copy of the same placed before us at page 26 of the Paper Book. Therefore, the alleged fault pointed out by the ld. CIT(E) based on the mistake of fact which crept into while filing column 4 of Schedule-I and it cannot termed as the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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