TMI Blog2021 (9) TMI 1072X X X X Extracts X X X X X X X X Extracts X X X X ..... n the hands of the assessee. Accordingly, maturity proceeds of fixed deposit cannot constitute income in the hands of assessee under any count. Hence the Ld CIT(A) was not justified in confirming assessment of the maturity proceeds of fixed deposit as income of the assessee. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition relating to maturity proceeds of fixed deposit. Certain fixed assets as application of income - AO allowed an aggregate amount of investment in fixed assets as application of income - We do not find any infirmity in the decision rendered by Ld CIT(A) on this issue. The assessee has claimed the expenditure of ₹ 7,29,227/- referred above in the Income and Expenditure account. Hence it cannot again be allowed as application of income. With regard to remaining three items, the assessee has not furnished any detail before us also and further the assessee has not proved that they are in the nature of capital expenditure resulting in acquisition of any asset. Accordingly we confirm the order passed by Ld CIT(A) on this issue. Rejection of Form no.10 filed by the assessee for accumulation of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of AO for passing fresh assessment order. Accordingly, the AO passed the impugned assessment order, wherein he determined the total income of the assessee at ₹ 76,88,340/-. The Ld CIT(A) gave partial relief and hence the assessee has filed this appeal in respect of above said three issues. 3. The first issue relates to assessment of maturity amount of fixed deposit as income of the assessee. The assessee has submitted Receipts and Payments Account before the AO, wherein the assessee has shown receipt of maturity proceeds of Fixed deposit kept with a bank amounting to ₹ 50.00 lakhs. The AO observed that the provisions of sec.11 use the expression income and not total income . The expression total income has been defined u/s 2(45) of the Act as the total amount of income as computed in the manner laid down in this Act . Accordingly he took the view that it would be incorrect to assign the meaning of the word total income to the word income . Accordingly, the AO took the view that the Gross receipts excluding corpus donation shall constitute income of trust or institution. Accordingly, he assessed the maturity proceeds of Fixed deposits amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Income tax Act. 6. As stated earlier, sec.11 of the Act prescribes exemption from taxation of income of the charitable trust to the extent provided in that section, meaning thereby, all income of charitable trust is taxable except to the extent provided in sec.11. In view of the above, the concept of income has to be understood in terms of sec.2(24) and other provisions of the Act. Hence, the view expressed by the AO that the Gross receipts excluding corpus donation shall constitute the income of trust or institution is contrary to the provisions of Income tax Act. The total income has to be computed in the hands of a charitable trust in accordance with the provisions of sec.11 to 13 of the Act and the same also satisfies the definition of total income given u/s 2(45) of the Act. 7. We have noticed that the assessing officer has assessed maturity proceeds of Fixed deposit as income of the assessee. There should not be any dispute that the maturity proceed of a fixed deposit is capital receipt in the hands of the recipient. A capital receipt cannot be subjected to tax except under the authority of law. In any case, what was received by the assessee on maturity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has not furnished any detail before us also and further the assessee has not proved that they are in the nature of capital expenditure resulting in acquisition of any asset. Accordingly we confirm the order passed by Ld CIT(A) on this issue. 10. The last issue relates to rejection of Form no.10 filed by the assessee for accumulation of income u/s 11(2) of the Act. The Ld A.R submitted that the assessee did not furnish Form No.10 for accumulation of income before the assessing officer within the due date prescribed for filing return of income u/s 139(1) of the Act. However, before the conclusion of assessment proceedings, the assessee filed the Form No.10 dated 08-01-2007 before Ld CIT along with the petition requesting Ld CIT to condone the delay in filing Form No.10. However, the Ld CIT, vide his order dated 14.03.2007 passed u/s 119(2)(b) of the Act, refused to condone the delay, inter alia, for the reason that the assessee did not file application in Form No.10 before the AO. The AO also refused to allow accumulation of income u/s 11(2) for the reasons that the Ld CIT has refused to condone the delay and the assessee has not filed Form No.10 before the AO. The Ld CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Ld CIT. The said fact has been noticed by the AO in the original assessment order also. Hence the copy of petition filed by the assessee along with Form no.10 is very much available with the AO during second round. 15. With regard to the delay in filing form no.10, we notice that the co-ordinate bench has expressed following view in the case of Ursuline Franciscan Congregation Generalate (ITA No. 1039/Bang/2017 dated 23.08.2021:- 11. We heard Ld D.R on this issue and perused the record. We notice that the Hon ble Supreme Court has observed as under in the case of Nagpur Hotel Owners Association (supra):- It is abundantly clear from the wordings of sub-section (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 No.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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted fact remains that the Form no.10 and resolution have been filed before him during the course of assessment proceeding itself, i.e., before completion of the assessment. 14. In view of the above, we are of the view that the AO should have entertained Form No.10 and resolution filed by the assessee. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore this issue to the file of the A.O. with a direction to consider Form No.10 and resolution filed by the assessee and examine the claim of the assessee u/s 11(2) of the Act in accordance with law. 16. The year under consideration in this appeal is AY 2005-06, i.e, prior to AY 2016-17. Accordingly, we are of the view that the Form No.10 already filed by the assessee should have been considered by the AO for the detailed reasons discussed above. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to consider Form No.10 filed by the assessee and examine the claim made u/s 11(2) in accordance with law. 17. In the result, the appeal of the assessee is treated as partly allowed. Pronounced in the open court on the date mentioned on the caption page. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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