TMI Blog2012 (10) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... al was justified in considering a new ground by the assessee claiming benefit under section 11 during the course of the appeal - not possible to state that there is any legal infirmity in the impugned order of the Tribunal in holding that rule 17 of the Rules is directory in nature and in holding that the assessee had duly complied with the requirements of sub-section (2) of section 11 of the Act. - Tax Appeal No.207 of 2000, Tax Appeal No.213 of 2000 - - - Dated:- 17-7-2012 - Akil Kureshi and Harsha Devani, JJ. For Appellant: Mr M R Bhatt, Sr. Counsel Mrs Mauna M Bhatt For Respondent: Mr S N Soparkar JUDGEMENT Per: Harsha Devani: 1. In this group of appeals the appellant-revenue has challenged the common order dated 28th October, 1999 passed by the Income Tax Appellate Tribunal in M.A. No.87 to 93/Ahd/99. 2. The assessment years are 1989-90 to 1995-96 respectively. The respondent-assessee is a non-registered association of members. It appears that the assessee had claimed that its income was liable to be exempted under section 11 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) which came to be allowed up to assessment year 1983-84. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d together and by a common judgment and order dated 24th June, 1999, the Tribunal allowed the appeals. However, while disposing the said appeals, the Tribunal did not consider the ground raised by the assessee in all the seven appeals against the disallowance of the claim for accumulation of income as per the provisions of section 11(2) of the Act. The assessee had filed applications in the prescribed form No.10 before the completion of the assessments intimating the Assessing Officer regarding accumulation of income in terms of section 11(2) of the Act. As noted earlier the Assessing Officer rejected the applications on the ground that the same were not filed within the prescribed period and had not been furnished with the returns of income. While filing the appeals before the Commissioner (Appeals) as well as the Tribunal, specific grounds had been raised against rejection of the application under section 11(2) of the Act. The assessee, therefore, moved miscellaneous applications before the Tribunal submitting that the Assessing Officer had rejected the applications on the ground that the applications had not been filed within the prescribed time and that the same had not been fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act for the assessment years under consideration, and, therefore, the Assessing Officer was not justified in denying the claim for exemption on this ground. 5. While admitting the appeals, this court had framed the following substantial question of law:- Whether, the Appellate Tribunal is right in law and on facts in holding that the time limit prescribed for filing Form No.10 under Rule 17 of the Rules read with Section 11(2) of the Income-tax Act is ultra vires the Act and in the alternative directory? 6. Assailing the impugned order, Mr. M.R. Bhatt, Senior Advocate, learned counsel for the appellant drew the attention of the court to the provisions of rule 17 of the Income Tax Rules, 1962 (hereinafter referred to as the Rules ) which lays down that the notice to be given to the Assessing Officer or the prescribed authority under sub-section (2) of section 11 or under the said provision as applicable under clause (21) or clause (23) of section 10 shall be in Form No.10 and shall be delivered before the expiry of the time allowed under subsection (1) of section 139, for furnishing the return of income. It was argued that the language of the rule is couched in ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereinabove, the sole question that arises for consideration is whether the Tribunal was justified in holding that the time limit prescribed for filing Form No.10 under rule 17 of the Rules read with section 11(2) of the Act is directory. In the present case, it is an admitted position that the assessee had filed Form No.10 as required under rule 17 of the Rules alongwith the revised returns filed in respect of all the assessment years under consideration. Thus, admittedly, the forms had been submitted before the assessment came to be completed. At this juncture reference may be made to the decision of the Supreme Court in the case of Commissioner of Income-Tax vs. Nagpur Hotel Owners' Association (supra) on which reliance had been placed by the learned counsel for the revenue, wherein it has been held thus: 6. 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 10 of the Act. If during the assessment proceedings the Assessing Officer does not have the necessary information, question of excluding such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the assessments. Therefore, while completing the assessments for the assessment years under consideration, the Assessing Officer had the necessary information in respect of the claim for exemption under section 11 of the Act made by the assessee before him. Thus, this is not a case where information in respect of the claim of the assessee for giving benefit of section 11 of the Act was furnished after the assessments for the relevant assessment years were completed. Under the circumstances, the present case is squarely covered by the aforesaid decision of the Supreme Court. The assessee was, therefore, entitled to the benefit of section 11 of the Act on the basis of the information supplied by it prior to framing of the assessment orders. 10. It may also be noted that this court in the case of C.I.T. v. Mayur Foundation (supra) has held that the assessment proceedings cannot be said to be complete and are pending till the appeal is heard and disposed of by the Tribunal and accordingly held that the Tribunal was justified in considering a new ground by the assessee claiming benefit under section 11 of the Act during the course of the appeal. As rightly urged by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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