TMI Blog2012 (12) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(2) for accumulation of Rs. 3.60 crores - held that:- delay is condonable in certain circumstances - However on facts it is seen that no such application has been filed by the assessee for condoning the delay before the Commissioner. As such the occasion to consider and thereafter accept/reject the same did not arise. Decided against the assessee. - I.T.A.No. 1144/Del/2005 and I.T.A.Nos. 1676,1677,1678/Del/2006 - - - Dated:- 31-1-2012 - SMT. DIVA SINGH AND SHRI B.K. HALDAR, JJ. Appellant by : Shri K.S.V.S. Manian, CA Respondent by : Smt. Reena S. Puri, CIT DR ORDER PER DIVA SINGH, JM These four appeals have been filed by the assessee against the orders of the CIT(A) for 2001-02, 1998-99, 1999-2000 and 2000-01 asstt. Years respectively. All these appeals are being decided by a common order for the sake of convenience as they were heard together in view of the common stand of the parties before the Bench that the arguments on facts and case law on either side would remain the same on the issues agitated by the assessee. 2. ITA No. 1114/Del/05 is filed against the order dated 5th November, 2004 of CIT XXVI, New Delhi for 2001-02 asstt. Year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution and was allowed exemption u/s 11 of the Income Tax Act, 1961 since inception and is a Government of India Society trying to help and coordinate various societies in the country manufacturing by member unit towards marketing of their hand looms products and the assessee was covered under section 2(15) of the Income Tax Act, 1961 and also registered under section 12A(a)of the Income Tax Act 1961. 3. ITA 1676/Del/2006 to ITA 1678/Del/2006 are filed against separate orders dt. 21.3.2006, 20.3.2006 and 21.3.2006 of CIT(A)-XI, New Delhi, wherein 3 identical grounds in each of the years have been raised. 3.1. For ready reference we reproduce grounds from ITA 1676/Del/2006. 1. That the CIT(A) erred on facts and in law in not appreciating that the initiation of the reassessment proceedings made by the AO u/s 147 of the Act was based on mere change of opinion and the reassessment order passed pursuant thereto is liable to be quashed. 2. That the CIT(A) erred on facts and in law in confirming the addition made by the AO in respect of interest on FDs maintained by the appellant with the bank without appreciating that the appellant had no control over the amounts of such FDs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals the ld.AR has also addressed arguments in ITA 1144/Del/2005 stating that these have been addressed before the CIT(A) and they shall be addressed while considering the said issue. 3.5. That leaves us with ground no.5 in ITA 1144/Del/05. No arguments were addressed on the said issue by the ld.A.R. It is seen that the said ground is consequential and requires no adjudication. However since no arguments were advanced it is dismissed as not pressed . 4. Having thus summed up the grounds in the appeals filed by the assessee we now propose to consider ground no.1 along with supportive grounds and arguments in ITA 1144/Del/2005. For the said purpose we first propose to set out the facts available on record. 5. Facts as available in the Assessment Order : The relevant facts are that the assessee as per its return filed on 17.10.2009 declared a total income of NIL. The assessment was concluded on a positive income of Rs. 1,30,81,281/- by assessment order dated 24.3.2004. 5.1. The Assessing Officer observed that the assessee is a Society whose main objects are to coordinate and diffuse useful knowledge to the member units towards marketing of handloom products. He also observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R which comes under the purview of income from the property i.e FDRs held under trust. Thus action of the assessee with regard to showing the interest income, as liability is not in order as per provisions of Sec. 11 12 applicable to the assessee. Since the interest income comes under the purview of income from the property held under the trust, the same is being treated as income. Examination of books of accounts showed that the assessee maintains its books of accounts of Mercantile System of Accounting and out of total interest of Rs. 9,80,81,363/-, Rs. 1,76,89,280/- accrued during the accounting period 1-4- 2000 to 31-3-2001. Hence, the same is being taken as income for the year under consideration. With these remarks, total income is computed as under :- Excess of Income over Expenditure As shown (-) Rs. 46,70,999/- Add :-Interest Income accrued and received As discussed above. Rs. 1,76,89,280/ Total Income Rs. 1,30,18,281/- 6. Aggrieved by this action the assessee came in appeal before the CIT(A). 7. Arguments before the CIT(A): Before the CIT(A) it was contended that the assessee is a Society constituted by the Development Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixed Deposits Receipts nor the interest thereof since the matter was subjudice and had been referred to the sole Arbitrator namely the Secretary (Textiles) and is pending till date. Thus, it was stated that the said amount cannot be taken as assesee s income. 7.4. Addressing the background it was submitted that the Govt. of Bihar through the Director of Handloom and Sericulture, Department of Industries, Govt. of Bihar invited tenders in the month of June, 1996 for supply of cotton dhotis and handloom cotton sarees to the State of Bihar. 7.4.1. The assessee s tender, it was stated, was accepted and a formal contract of the total value of Rs. 199.854 crores was entered into on 5.3.97 for supply of 124.52 lakhs dhotis and an equal number of sarees. 7.4.2. Referring to the contact it was urged that as per the stipulations in the contract an amount of Rs. 40 crores was paid to the assessee on the assessee s furnishing a Bank Guarantee for an equal amount in favour of the Government of Bihar. 7.4.3. The said amount, it was stated was to be used by the assessee for distribution amongst various State Level Cooperative Weavers Societies for initiating supplies. 7.4.4. It was clar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had also referred the matter to the Sole Arbitrator, Secretary (Textiles) on 26.9.1997. 7.8. On 5.2.2001, it was stated the Government of Bihar apart from the refund of Rs. 40 crores also lodged before the Arbitrator a claim of Rs. 35.48 crores as interest on advance money as well as recoveries of expenditure and punitive compensation all aggregating to Rs. 71 crores. This was claimed it was stated over and above Rs. 40 crores which was already in dispute. 7.9. It was submitted that on account of these facts the interest does not belong to the assessee as the assessee was holding the same in trust on behalf of the Government of Bihar. 7.10. It was stated that interest income earned arising out of deposits of such advance does not have taxable character in the hands of the asseee. It was further stated that the matter was subjudice. On account of this fact the assessee has treated the sum of Rs. 9.80 crores as a liability being interest on fixed deposits under lien against the Bank Guarantee. It was submitted that the bank has marked a lien on this amount of FDR as well as the interest thereof as security against the Bank Guarantee provided to the Govt. of Bihar and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so submitted that although the word earned does not appear in section 4 of the Act however it has very often been used by the Courts. It was stated that the concept cannot be divorced from income accruing to the assessee. It was argued that If income has accrued to the assessee it is certainly earned by him in the sense that he has contributed to its production and of the parenthood of the income which can be traced to him. It was argued that in order that the income can be said to have accrued to or earned by the assessee it is not only necessary that the assessee must have contributed to the accruing or arising by rendering services or otherwise but he must have created a debt in his favour. A debt must have come into existence and he must have acquired a right to receive the payment or in other words a debtium in present solvendum in futuro. 7.16. On facts it was argued it cannot be said that any income has accrued to him.. The mere expression earned in the sense of the rendering the services etc. by itself is of no avail. It was stated that it is a settled position and has been applied to understand what is an amount receivable under the mercantile system of accounting is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Income-tax Act, 1961 an institution or trust availing the benefit of section 11 and 12 should declare every receipt either by way of voluntary contribution income from property held under trust and service charges on account of service rendered by educational by educational and medical institutes, as income earned during the year. During the course of appellate proceedings before me, the Assessing Officer has affirmed that there is no stipulation in the contract that the interest accrued or arisen on the Fixed Deposit Receipt, cannot be availed of by ACASH. Taxation of Rs. 1,76,89,280/- being interest income accrued and received, is , therefore held to be in accordance with law, and confirmed. 9. Being aggrieved by the order of the CIT(A) the assessee is in appeal before the Tribunal. 10. Submissions on behalf of assessee : Ld. AR heavily relied upon the submissions advanced before the authorities below and reiterated the facts as canvassed before the authorities below. 10.1 Attention of the Bench was invited to the copy of the written submissions filed before the Bench on the basis of which it was contended that no income has accrued to the assessee in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Rs.35.40 crores to Bihar Govt. upto Nov. 1997 with a corresponding liability to the suppliers. Against this supplies the assessee received only of Rs.7.96 crores. 6. In July 1997 on the basis of newspaper reports alleging production of sarees and dhotis on power looms instead of hand loom by some of the supplying agencies engaged .by the assessee the Bihar Govt. wanted to terminate the contract.. The Chief Secretary, Govt. of Bihar invoked the Bank Guarantee vide order dated 15.9.97, copies enclosed at paper book page no.10 to 14. Consequently, the Director (Handloom) and Sericulture, Bihar, Patna vide letter dated 23.9.97, copy enclosed at page 9 of the paper book directed the Syndicate Bank for payment of Rs.40 crores. 7. On 21.11.97 the Under Secretary, Govt. of Bihar terminated the contract with ACASH vide letter enclosed at page no.15 and 16 of the paper book. 8. Assessee filed petition before the Hon'ble Delhi High Court u/s 9 of the arbitration and conciliation Act 1996 for interim relief restraining the encashment of the Bank Guarantee which came up before single Judge vide his order dated 1.9.99 dismissed the application for add interim injection on the ground th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for paying back to Bihar Govt. 16. The Assessing Officer has treated the interest on the FDRs having its source to the advance received from the Bihar Govt. as assessee's own income thereby resulting in huge demands against the assessee despite the submissions of the assessee that the principal as well as the resultant interest therefrom does not belong to the assessee as the Society does not have any right on such income. The income taxed by the AO. as assessee's income is as under:- A Y. 2001-02 - Rs.1,76,89,280/- A.Y. 2000-01 - Rs.3,51,63,260/- A.Y 1999-2000 - Rs.2,10,46,130/- 17. The case of the assessee is the advance received from Govt. of Bihar which is the source for the FDR was held by the assessee as Trustee in fiduciary capacity. The interest thereof on the said FDRs therefore is also held in trust and cannot be regarded as income of the assessee as the assessee has no right on the said interest income 18. As stated above, the entire transaction is now before the arbitrator and issues will be resolved after the award of the arbitrator provided it is acceptable by the parties otherwise the matter would have to be finally resolved by the superior courts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se arguments were advanced before the CIT(A) also who should have allowed the alternate claim relying on CIT vs. Mayur Foundation 274 ITR 562 (Guj.). It was submitted that the said argument is recorded in the impugned order however no finding thereon has been given. Reliance was placed on Circular no.100 dt. 24.1.1973 of the CBDT for the contention that the claim of the assessee deserves to be allowed. 11. Submissions in support of the orders by the Ld.CIT, D.R. :The Ld. D.R., on the other hand, vehemently contended that the assessee has been contesting before the sole Arbitrator that the Rs. 40 crore has wrongly been encashed by the Bihar Government and the said amount belongs to it. It was her stand that the assessee has been taking contrary stands on facts before every forum. 11.1 On facts it was her argument that the assessee has violated the terms of the contract with the State of Bihar. The fact that the assessee had made the bank guarantee from the advance of Rs.40 crores received from the State of Bihar was stated to be in clear violation of the terms of the contract. To so invest the funds, it was her submission, was assessee s own decision. It was her argument that ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessee at every stage knew how much interest was earned on the FDRs as such the judgment of Apex Court in the case of E.D. Sasoon and Co. Ltd. and Others vs. CIT on which Ld. AR was heavily relying upon would not be applicable since that is a case of a managing agency, and facts and issues are distinguishable . Similarly it was argued that the other cases relied upon by the ld.AR would have no applicability as the interest belonged exclusively to the assessee and there is no order of any arbitrator or any court which says that the said sums do not belong to the assessee. 11.5 Addressing the alternate submission advanced by the assessee on the application of income, it was her submission that this argument was never made before the AO and the Assessing Officer, as such, has never examined it for which reason the said argument even though addressed before the CIT(A) has not been considered by the CIT(A). It was her contention that as the assessee has not made an application in the proper form in terms of section 11 and 12 of the Act, there is no occasion to consider the same. It was emphasized that no application for such request has been moved by the assessee along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the Director of Handlooms and Sericulture, Dept. of Industries, Govt. of Bihar invited tenders in the month of June 1996 for supply of cotton handloom cloth/sarees to the State of Bihar. The assessee succeeded in its tender being accepted. The successful bid resulted in an agreement dt. 5.3.1997 between the Government of Bihar and the association of corporations and Apex Societies of Handlooms (referred to as ACASH i.e. the assessee) which is placed at pages 10 to 15 of the paper book. 13.2. A perusal of the said document shows that an advance of Rs. 40 crores was paid by the Government of Bihar and the Bank Guarantee of the said amount was to be given on the same date as per Clause 1 of the said agreement. 13.3. As per Clause 7 of the said agreement the assessee was required to furnish a performance guarantee for Rs. 20 crores which could be invoked by the Chief Secretary, Bihar, if there are sufficient reasons to do so after giving an opportunity of being heard to the assessee. 13.4. A perusal of clause 13 of the said agreement further shows that the Chief Secretary, Bihar after giving an opportunity of being heard to ACASH if there were sufficient reasons to do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment for the full value of accepted goods within 23 days from the date of the receipt of goods. All draft charges shall be borne by ACASH. Draft shall be payable at Delhi on a nationalized bank. (iii) ACASH shall send the material through transporter on prepaid basis to the District Headquarters. In the event of default in timely payment by Govt. of Bihar in one fortnight ACACH has the right to stop further supplies and no penalty will be paid by ACACH for late delivery in the event of non payment or delayed payment. (iv) In case, ACASH makes the supplies earlier than the delivery schedule, the Govt. of Bihar shall make payment for the full value of goods supplied within the same time for the extra supplies also. (v) The adjustment of the advance is to be made from the bills of later part of the last two months of supply @ Rs.20 crores per month. Clause 13 : Bank guarantee The two bank guarantees (for Rs.40 crores and Rs.20 crores) may be invoked by the Chief Secretary, Bihar if there are sufficient reasons to do so, after giving an opportunity of hearing to ACACH, ACACH may be given seven working days time to refer the matter to the Arbitrator. Bank guarantee to be g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1997. Accordingly it was stated on this ground alone the bank guarantee could be invoked. 13.4.5. It was also agitated that ACASH had not adhered to the schedule of supply. According to the schedule the entire supply ought to have been completed by 21st August, 1997 where as till 25th August, 1997 only 20% of the total ordered quantity was stated to have been supplied. It was alleged that the violation of the contract was not limited to supply of goods but ACASH was also faulted with on the ground of failing to provide a revised supply schedule which it was claimed was itself also adequate and sufficient ground to invoke the Bank Guarantee. 13.4.6. Another objection was posed on the ground that the evidence available with Govt. of Bihar showed that power loom goods instead of only handloom products had been supplied. The contention that the collectors had accepted the goods and distributed part of the goods was contested to be not a valid ground and ACASH was accused of having cheated in as much as the powerloom products had been wrongly stamped as handloom products. The samples having been tested in the organizations under the Textile Ministry or linked to the said Ministry we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delivery of goods and had also appropriated the goods. 13.4.9. It was also contended through the Advocate that the Rs.40 crores advances had been given for commencement of execution of the contract which was to be given as interest free advances to supplying (handloom organizations). How the State handloom organizations were to appropriate these advances it was stated was governed by the Articles of Association of the said handlooms association. It was stated that there is no bar for the State organization to advance to private persons if their rules permit. However as far as ACASH is concerned no advance had been given to two agencies from Haryana or to any private party. 13.4.10. On behalf of ACASH the sample testing was also faulted with the ground that the samples were stated to have been taken from six suppliers and the value of the said lot was only Rs.65 lakhs rupees. The samples were also stated to have not been taken in the presence of the Representative of ACASH. The entire conclusion having been based on just two samples from each supplier was also faulted with. It was pointed out that under Clause 5 (iii) of the contract certificates of acceptance have been issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 26th August, 1997 addressed by the State of Bihar to ACASH requiring that a detailed enquiry be made in respect to the irregularities. 13.4.13. Considering these submissions the Chief Secretary concluded that there was a violation in the terms of the contract by ACASH on two grounds namely Performance Guarantee not having been finalized within the stipulated time nor in the extended time; and not adhering to the delivery schedule or submitting any Revised Schedule. However in regard to the issue whether the supply was of products produced by power loom or handloom he took the stand that he was not in a position to take a view as the report of the Textile Commissioner was awaited. 13.4.14. For ready reference we reproduce para 5 of the said order from page 23 of the paper book. 5. After going through the papers and arguments of both the parties, I am satisfied that Acash has violated the terms of the contract at least on two grounds : (i) Performance guarantee was not given within the stipulated time and even after extension of the time limit upto 30.9.197. (ii) They have not adhered to delivery schedules, nor was any revised schedule submitted. In addition, ACACH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Govt. of Bihar. The said sum was advance available to the assessee for the specific purpose of facilitating/executing the terms of the contract entered. As such the said sum was available to the assessee to be used accordingly by it at its own discretion. Admittedly the assessee maintained a portion of the advanced funds in its savings bank and advanced the funds to weaver societies as and when identified by it. The interest earned on the funds maintained in the Saving bank account has been taken by the assessee itself as the income as such there is no quarrel on the said issue with the department. However a portion of the said Rs.40 crores received as advance namely Rs. 28.11 crores etc. has been deposited in FDRs. It has been canvassed that the decision to do so was a prudent decision as Weaver Societies capable of delivering the handloom products had to be identified. The prudence of the said decision/action is also not under challenge and it will not impact the conclusion that the amount of interest is taxable in the hands of the assessee. The claim that it belongs to the State of Bihar cannot be accepted. The departmental stand that it is a unilateral decision of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot the income of the assessee. The stand has been vehemently opposed by the ld.D.R. who has argued that the said judgement has no relevance to the facts of the present case as it is purely in the context of the circumstances where a managing agency can be said to have earned commission or not. A careful reading of the said judgement shows that their Lordships were called upon to consider one common question of law in all the appeals viz., whether in the circumstances of the case the managing agency commission was required to be apportioned between the Sassoons and their respective transferees in the proportion of the services rendered as managing agents by each one of them and the decision turns upon the question whether any income had accrued to the Sassoons on the dates of the respective transfers of the managing agencies to the transferees or at any time thereafter. 13.8.2. Considering the terms and conditions of the agreements entered into by the assessee and other managing agents it was held that the commission were not liable to apportionment between the S Company and A in the proportion of the services rendered as managing agents by each one of them, but A was liable to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to facilitate the performance of the contract so as to enable the assessee to advance the same to the cash-starved weaver associations so that they could meet their requirements of yarn and wages cost. The ownership, control over the said funds of the assessee was undisputed. The act of holding them in lien for the State of Bihar does not pass the ownership/control of the said funds from the assessee. Thus neither at the time the funds were received nor during the time they continued to be in assessee s possession till December 2000. The fact that the assessee approached the Hon ble Delhi High Court seeking to restrain the State of Bihar from revoking the Bank Guarantee or the stand before the Sole Arbitrator that these were funds belonging to the assessee are facts which may be relevant for considering the bonafide. However as far as quantum proceedings are concerned it has no relevance. However the admitted stand of the parties as appearing from documents available on record is that the FDs of Rs.28.11 crores were maintained from advance of Rs.40 crores which admittedly was the advance received by the assessee for performing the obligations of the contract the interest earned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ownership of the said advance received for the specific purpose of facilitating its contractual terms which were in harmony with its aims and objects. 13.9. Our attention is also invited to the CIT vs. Rao Bahadur Kalawala Cunnan Chetty Charities ( 1982) 135 ITR 485 Madras for the proposition that the income from the properties held under the Trust will have to be arrived at in the normal commercial manner. Perusal of the observations made by the Hon ble High Court would show that in the facts of the present case it does not advance the case of the assessee in any manner. The relevant observations extracted from the said judgement are: Whereever Parliament considered that the computation of income should be in accordance with the provisions of the I.T.Act, 1961, it introduced the concept by using appropriate language. In the absence of any such language in S.11(1) of the Act, the computation as envisaged by the other provisions of the Act cannot be imported into S.11(1). Section 11 contemplates an application of the income for charitable purposes. The charity can accumulate 25 per cent of the income. Taking into account the purpose for which the conditions of S.11(1)(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no surplus money for the purpose of investment and hence the trust was not assessable under the I.T.Act. 13.10.1. The argument that unilateral action of the assessee should be given sole importance and the facts available on record be ignored is not supported by their Lordships in the case of Nizams Supplement reliance Endowment Trust. 13.11. Before us reliance was also placed upon the judgment of the Delhi High Court in the case of Paragaon Construction India Ltd. vs CIT. The facts as appreciated by the Hon ble High Court are that there was a dispute between the assessee and the NDMC in regard to the contract entered into with the NDMC. The dispute was referred to the Arbitrator who passed an award directing NDMC to pay certain sum along with simple interest to assessee. The assessee moved the Hon ble High Court for making the award rule of the Court. Despite filing objections against the award the NDMC deposited the amount in the Court. During the pendency of the proceedings the Hon ble High Court permitted the amount to be withdrawn by the assessee against the bank guarantee with a further condition that in case the NDMC succeeds assessee would refund the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as the assessee is not a producer/manufacturer of the product and faults have been found with the sampling procedure and the sampling area. The fact remains that despite the multiplicity of disputes and the allegations and counter allegation as far as the factum of Rs.40 crores advanced to assessee is concerned by the State of Bihar there is no dispute on the fact that it was advanced to the assessee for a specific purpose in terms of the contract. The fact that interest has been earned from the FDRs of Rs. 28.11 crores maintained from a portion of Rs.40 crores there is no dispute. We see no evidence or document on the basis of which it may be said that these funds belonged to the State of Bihar as they were exclusively put for the use of the assessee to perform a certain task. By virtue of the said fact the interest earned thereon it becomes the income of the assessee whatever may be the treatment given by the assessee in its books of accounts. The facts and issue considered by the Hon ble High Court in the case of Paragaon Constructions is of no help to the assessee as the facts are entirely distinguishable. 13.12. Reliance is also placed upon the judgement of Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds in Trust for the State of Bihar. The funds are at the exclusive disposal of the assessee as an advance in terms of the agreement with the State of Bihar for advancing the same to the weaver societies. Till the said sums are not advanced they are the income of the assessee and as and when the said funds are advanced they are application of income maintaining FDs of Rs.38 crores from the advance of said funds on which interest has been earned cannot be said to be application of the income. As such these judgement do not help the assessee in any manner. 14. Accordingly for the reasons given hereinabove the ground no.1 in ITA 1144/Del/2005 along with grounds 2, 3, 4 6 are rejected. Ground no.5 was not argued by the parties before the Bench. Being consequential the same is rejected. 15. In the said appeal based on page 14 para 24 of the impugned order, arguments were advanced in ITA 1144/Del/2005 along with arguments in support of ground no.3 in the remaining 3 appeals. These shall be considered while adjudicating groundno.3 in ITA 1676, 1677 1678/Del/2005. 16. In the remaining 3 appeals of the assessee ground no.1 is common and the common stand of the parties before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A) of the I.T.Act, 1961. The Ld.A.R. merely confined his argument to the fact that it was a case of change of opinion which is no longer res integra by virtue of the judgement of the Apex Court in the case of Rajesh Jhaveri Stock Brokers, 291 ITR 500 (S.C.). The ld.D.R. also relied upon CIT vs. Sivashakthi Floor Mills Ltd. 327 ITR 430 (Gauhati). Accordingly in the light of the aforementioned facts, arguments and position of law, the finding arrived at in the impugned order is upheld on this issue and ground no.1 of the assessee in each of these remaining 3 years is rejected. 17. Ground no.2 has been considered by us in the earlier part of this order while considering ground no.1 along with supporting grounds in ITA 1144/Del/2005. Since the facts and circumstances remained identical for similar reasons the ground no.2 of the assessee is dismissed in these remaining 3 appeals. We may only make a reference to the fact that apart from the arguments advanced in A.Y. 2000-2001 another argument was also advanced before the CIT(A). The assessee had advanced the argument that as per Accounting Standards 9 (A.S.-9) the assessee s claim on merit deserves to be allowed on the basis of Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000 and 2000-2001 A.Ys respectively He was further of the view that the assessment was not a normal assessment and it was an assessment u/s 147/143(3) and the department s circular no.273 dt. 30th January, 1980 dealt with matters of condonation of delay in filing form no.10 under which the CBDT has authorized the CIT to admit the belated application u/s11(2) read with Rule 17 for condonation of delay in filing form no.10 u/s 119(2) of the Income Tax Act, 1961. And since the assessee has not sought any such condonation of delay in respect of the three A.Ys the plea for accumulation of income u/s 11(2) read with Rule 17 was not tenable in each of the years. 18.1.1. These comments of the A.O. were forwarded to assessee who filed his submissions dated 7.3.2006 which are found reproduced at pages 29 to 34 of the impugned order. 18.1.2. A perusal of the same shows that the assessee contended that in the facts of assessee s case there was no assessment u/s 143(3) and the returns were processed u/s 143(1)(a). No notice u/s 143(2) was issued for scrutiny assessment. Thus the reassessment u/s 147/143(3) is infact the first assessment of the assessee company. The facts qua the issue on m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he I.T.Rules clearly stipulates that notice in Form 10 is required to be submitted within the time limit prescribed u/s 139(1). In the instant case the due date for filing of return for the year under consideration was 31.10.2000. The appellant has filed the said form on 25.2.2005 in the course of assessment proceedings initiated u/s 147 of the Income Tax Act, 1961. Thus there is an inordinate delay in filing of form no.10 and here I am inclined to agree with the observations of the AO in his report dt. 27.2.2006 that if the appellant s contention is accepted then there is no need to file notice for accumulation u/s 11(2) in form no.10 and the assessee can file the said form as and when pointed out/detected by the department. It is also noticed that vide circular no.273 dt. 30.6.1980 the CBDT has authorized the CIT to admit a belated application and condone the delay after satisfying himself regarding the genuineness of the case. In the instant case, however, no such application for condonation of delay has been filed by the appellant. Under these circumstances I am inclined to agree with the view of the AO that the appellant s plea for deemed application of funds u/s 11(2) for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 dt. 3.6.1980. CBDT circular has authorized Commissioners to admit applications u/s 11(2), read with rule 17, from persons deriving income from property held under the trust wholly for charitable or religious purposes for accumulation of such income to be applied for such purposes stipulated subject to the condition inter alia that the failure to give notice to the Income Tax Officer u/s 11(2) and investment of the money in the prescribed securities was only due to oversight. Oversight means according to Oxford Advanced Learner s Dictionary, the fact of making a mistake because you forget to do or you do not notice. Where, according to the petitioner, there was delay by charted accountant in finalizing the accounts and it was for that reason that the notice in form no.10 for accumulation was not filed within the time indicated in rule 17 and the commissioner rejected the application for condonation of delay in giving form 10 under rule 17 and the Commissioner rejected the application for condonation of delay in giving form 10 under rule 17 the authority was directed to pass an order in the light of the CBDT circular prescribing conditions for admitting applications by the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entirely assessee s own wisdom and if the assessee instead of directly approaching the concerned authority chooses to agitate the issue in appeal, we have no alternative but to dismiss the ill advised stand of the assessee posed by way of ground no.3 as on facts as they stand we are of the view that there is no infirmity in the impugned order. 18.6. In the facts of ITA 1144/Del/2005 it is seen that the assessee has by way of an argument addressed the issue before the CIT(A) and on the basis of the strength of the arguments advanced therein has also agitated that benefit of accumulation be allowed to the assessee in A.Y. 2000-2001. 18.6.1. It is seen that herein also where necessary steps have not been taken by the assessee itself the occasion to consider something where efforts on the part of the assessee are lacking does not arise. As such we are of the view that there is no occasion for us to give any direction to any authority under the Act in the facts of the present case as necessary steps have not been taken by the assessee itself. The occasion to consider various judgements in the context of oversight or reasonable cause does not arise as such the said plea of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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