TMI Blog2013 (8) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Council of Uttar Pradesh vs. CIT [1982 (9) TMI 37 - ALLAHABAD High Court] and CIT vs. Mayur Foundation [2004 (12) TMI 48 - GUJARAT High Court] - Decided against Revenue. Condonation of delay u/s. 11(2) - Failure to spend 85% of its total income - Held that:- The assessee has produced sufficient evidences and material on record to show that the assessee made full compliance of provisions of section 11(2) & (5) of the IT Act because resolution was passed to the effect of accumulation of surplus fund in the assessment year under appeal by way of converting the amount into FDR with Nationalized Bank, which was to be used for the purpose of construction of school building. Copies of the resolution, balance sheet and auditreport are filed to indicate the intention of the assessee to accumulate the funds for the purpose of making construction in the subsequent assessment year. The assessee also later on made a request for condonation of delay in filing Form No. 10 belatedly before the AO as well as CIT. Therefore, in the facts and circumstances of the case, particularly when surplus funds were accumulated and deposited with the Nationalized Bank, the delay in filing Form No. 10 shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umulation u/s. 11(2) cannot be allowed. The AO accordingly made addition of ₹ 9,93,960/- and computed the income accordingly. 3. The addition was challenged before the ld. CIT(A). The assessee also raised additional ground of appeal claiming exemption u/s. 10(23C) (iiiad) of the IT Act. The assessee submitted that it is registered u/s. 12AA and 80G w.e.f. 01.04.2004. The audit report was filed along with the return of income. The assessee solely exists for educational purpose and there is no other source of income. The AO made addition because the assessee has not filed form No. 10 intimating the intention of accumulation/set apart. It was submitted that in the meeting of the trustees held on 27.03.2006, resolution was passed as per the minutes of the meeting recorded that out of surplus of financial year 2005-06, FDR of ₹ 18 lacs for one year should be taken for investment in future expansion of educational institution. Copy of the resolution and minutes were filed. The investment in FDR of ₹ 18 lacs was accordingly made with Punjab National Bank, which is duly appearing in the balance sheet as on 31.03.2006 of the assessee trust and was filed with the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so submitted that the assessee filed belated application in Form No. 10 with condonation of delay and additional ground may not be admitted with additional evidences. The assessee in the rejoinder reiterated the same facts. 5. The ld. CIT(A) considering the submissions of the assessee and the material on record admitted the additional ground and evidences and decided the same in favour of the assessee and also deleted the addition on merit. His findings in paras 7 to 7.3 of the appellate order are reproduced as under : 7. After careful consideration of all the facts on record and rival submissions as contained in assessment order and in appellant's submission and remand report, my observations/conclusions are as under:- 7.1. At this junction, I will take up the additional ground of appeal raised by appellant during appeal, which is regarding exemption U/s 10(23C)(iiiad). The AO has objected to admission of this additional ground and evidence. However, I find that the facts and evidences regarding assessee's assertion being squarely included in additional activity is already available on record and hence this additional ground, which is of legal nature, go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo days since the assessment order had been finalized by the A.O. I find that the reasoning given by the A.O. is too narrow even on technical grounds, so as to be fair and just. It is un-disputed that the fact of ₹ 18 Lac kept apart in F.D. was mentioned not only in computation of income ( under the head expenditure ) but also it was specifically mentioned in the Auditor's report prescribed U/s. 12A(b) Annexure 5 6. A.O's objection in this regard, that even in the audit report, such accumulation was specifically denied vide point No.8, is also misplaced because A.O. has seen the irrelevant portion; he should have seen Point No.5 6 which were relevant for this purpose and according to which such accumulation was mentioned; point No. 8 is relevant only with respect to section 13(3) which is not applicable in this case. Further it is on record that the prescribed intimation u/s. 11(2) was also given, when asked, but technically assessment order had been finalized by that time. The point is that such intimation had been placed on record. Further more, I find that case law of Mayur Foundation 274 ITR 560 (Gujrat High Court) is squarely applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erused the findings of the authorities below and considered the material available on record. Hon'ble Gujrat High Court in the case of CIT vs. Mayur Foundation, 274 ITR 562 held as under : Proceedings before the Tribunal are meant to correctly assess the tax liability of an assessee. If this be so, it follows that assessment proceedings cannot be said to be complete but are pending till the appeal is heard and disposed of by the Tribunal and the order of the Tribunal is given effect to, by the assessing authority by computing the correct tax liability of an assessee. In other words, whether an assessee is required to pay tax or becomes entitled to a refund, would be ascertained by the assessing authority after giving effect to the other of the Tribunal. The assessee was a charitable trust, registered under the provisions of the Bombay Public Trusts Act, 1950. During accounting year relevant to the assessment year 1980-81, the assessee received voluntary contributions amounting to ₹ 2,04,468. The donations were treated as income within the meaning of Section 2(24)(iia) of the Income-tax Act, 1961, by the Assessing Officer. The assessee contended that the do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority is empowered and is duty bound, to pass an order giving effect to the order of the Tribunal for the purposes of assessing the tax liability of an assessee for the assessment year under consideration before the Tribunal. In these circumstances, it could not be contended on behalf of the Revenue that the assessment proceedings came to an end when the assessment order was framed. (ii) That the Tribunal was well within its jurisdiction to entertain the new ground by which the assessee claimed the benefit under section 11(2) of the Act and adjudicate the tax liability of the assessee. (iii) That the Tribunal was correct in holding that the assessee was entitled to the benefits allowable under section 11(2). 7.1 ITAT, Indore Bench in the case of ITO vs. Shri Mahakal Mandir Prabandh Samiti, 42 SOT 1 (Indore)(URO) held as under : It was not in dispute that the assessee was granted registration under section 12AA, therefore, it would be entitled to the benefit under sections 11 and 12. Rule 17 of the Income-tax Rules, 1962 provides that notice under section 11(2) is to be given to the Assessing Officer in Form No.10 and shall be delivered before expi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia) Ltd. vs. CIT, 284 ITR 323, held as under : Held, dismissing the appeal, that there was no prohibition on the powers of the Tribunal to entertain an additional ground which according to the Tribunal arose in the matter and for the just decision of the case. There was no infirmity in the order of the Tribunal. 7.3 Hon'ble Allahabad High Court in the case of Bar Council of Uttar Pradesh vs. CIT, 143 ITR 584 held - The provisions of s. 10(23A) and s. 11 are not mutually exclusive and they can have simultaneous application if the necessary ingredients of the provisions are made out. 8. Considering the facts of the case in the light of findings of the ld. CIT(A) and above decisions, we do not find any merit in the departmental appeal. The assessee submitted the complete details before the authorities below and made a claim that it was running school in the name of Wisdom Public School, Aligarh. The assessee also claimed that the assessee exists solely for educational purpose.Claim of the assessee was not disputed by the AO. It is also not in dispute that total receipts of the assessee in the assessment year under appeal were less than ₹ 1 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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