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2014 (7) TMI 91 - AT - Income TaxExemption u/s 11 - Revision u/s 263 - non application of 80% of income towards charitable purpose - Interest income on funds parked in FDs – Failure to file Form 10 regarding accumulation of 15% of income - Held that:- Following Commissioner of Income-Tax And Another Versus Karnataka Urban Infrastructure Development And Finance Corporation [2006 (2) TMI 114 - KARNATAKA High Court] - the interest income ought to be excluded from the income - 85% of the income which was arrived by the CIT in his order u/s 263 of the Act will stand modified - The application of income by the assessee for charitable purposes has been accepted by the CIT - the amount determined by the CIT in the order as sum assessable u/s 11(2) of the Act will also stand revised - The AO is directed to do the revised computation. - Decided partly in favor of assessee. Regarding non submission of form 10 for accumulation of income - Held that:- in CIT Vs. Nagpur Hotel Owner’s Association 2000 (12) TMI 99 - SUPREME Court] it has been held that it was abundantly clear from the wordings of sub-s. (2) of s. 11 that it is mandatory for the person claiming the benefit of s. 11 to intimate to the assessing authority the particulars required, under r. 17 in Form No. 10 - even assuming that there is no valid limitation prescribed under the Act and the Rules even then, it is reasonable to presume that the intimation required under s. 11 has to be furnished before the assessing authority completes the concerned assessment because such requirement is mandatory and without the particulars of this income the assessing authority cannot entertain the claim of the assessee under s. 11, therefore, compliance of the requirement of the Act will have to be any time before the assessment proceedings. - Form 10 can be filed before the conclusion of the assessment proceedings - the AO did not call upon the assessee to show cause regarding non-furnishing of Form 10 - Even the CIT in the proceedings u/s. 263 of the Act did not afford opportunity to the assessee to file Form 10 – thus, the order of the CIT is set aside and the matter is remitted back to the AO for adjudication – Decided partly in favour of Assessee.
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