TMI Blog2014 (11) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return of income filed originally and AO also accepted such claim of assessee while completing the original assessment - AO never raised the issue of non-filing of Form No. 10 nor he rejected assessee’s claim of exemption u/s 11 in respect of accumulated income - Therefore, there was no occasion for assessee earlier to file Form No. 10 - when assessment was reopened for assessing escaped income on account of non furnishing of Form No. 10, it can be said that furnishing of Form No. 10 is relatable to escaped income sought to be assessed - Accumulation/setting apart of excess income is already disclosed/shown by assessee in the return of income originally filed and was also examined and allowed by AO while completing the assessment. Neither it is a fresh claim made by assessee which was not before AO during the original assessment nor it is a claim rejected by AO during original assessment, and reagitated by assessee during the assessment proceeding - assessee did not furnish form No. 10 along with the return of income, but, were furnished during proceeding initiated u/s 147 of the Act- Following the decision in ASSOCIATION OF CORPORATION & APEX SOCIETIES OF HANDLOOMS Ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Along with the said return of income, assessee also furnished a certificate in Form No. 10 in compliance to the provisions of section 11(2) of the Act. AO, however, refused to accept either the return filed in response to notice issued u/s 148 or Form No. 10. The reasons for not accepting, as mentioned by AO in the assessment order, are as per the provisions of section 148, assessee has to file the return of income within a period of 30 days from the service of notice u/s 148. As the return of income filed on 24/07/12 is beyond the prescribed period, the said return is to be treated as invalid. Similarly, AO held that as per the statutory provision, assessee has to intimate AO the excess accumulation over and above the amount allowed u/s 11(2) in Form No. 10 before expiry of time allowed u/s 139(1). The provision, does not provide for filing of Form No. 10 before completion of assessment. He, further, noted that even assessee has not filed Form No. 10 before completion of original assessment u/s 143(3). He observed that reopened assessment u/s 147 cannot be treated as pending assessment, hence, assessee s contention that Form No. 10 was filed before completion of assessment cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t been issued would have no opportunity to file Form No. 10 whereas another in whose case such notice has been issued would be entitled to do so. This, according to, learned CIT(A) would be discretionary. Learned CIT(A) relying upon a decision of Hon ble Supreme Court in case of CIT Vs. Sun Engineering Works, 198 ITR 297, held that proceeding u/s 147 is for the benefit of revenue and not for the benefit of assessee. Therefore, assessee in course of reassessment proceeding, cannot make good the deficiencies in terms of original return of income. Accordingly, learned CIT(A) upheld the decision of AO that assessee cannot file Form No. 10 in course of reassessment proceeding. 6. The learned AR submitted before us that as per section 2(8) assessment includes reassessment. Therefore, assessee is entitled to file Form No. 10 during reassessment proceeding and the AO as well as learned CIT(A) are not justified in rejecting Form No. 10 filed by assessee. In support of such contention, learned AR strongly relied upon a decision of Hon ble Delhi High Court in case of Association of Corporation and Apex Societies of Handlooms Vs. ADIT in judgment dated 10/01/13 in ITTA No. 523 to 526 of 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation the question of excluding such income does not arise at all. In the aforesaid context, the Hon ble Supreme Court observed that for giving a benefit to any claim made on the basis of information supplied subsequent to completion of assessment would mean that the assessment order will have to be reopened which the Act does not contemplate. 9. However, the facts in the present case are totally different. As can be seen from the reasons recorded by AO while reopening assessment, assessee itself in the return of income has computed the excess income accumulated/set apart and AO has allowed exemption to assessee while completing the original assessment after examining the same. Therefore, as can be seen from the facts of the assessee s case, exemption claimed by assessee, in fact, was allowed by AO and it was never pointed by AO to assessee that due to non filing of Form No. 10 assessee s claim of exemption will not be accepted. Therefore, when the assessment was reopened for disallowing assessee s claim of exemption u/s 11 in respect of excess income accumulated/set apart for non-furnishing of Form No. 10, assessee became aware of it and furnished Form No. 10 before AO in cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has escaped assessment. It does not extend to reconsidering generally the concluded earlier assessment. Claims which have been disallowed in the original assessment proceeding cannot be permitted to be reagitated on the assessment being reopened for bringing to tax certain income which had escaped assessment because the controversy on reassessment is confined to matters which are relevant only in respect of the income which had not been brought to tax during the course of the original assessment. A matter not agitated in the concluded original assessment proceedings also cannot be permitted to be agitated in the reassessment proceedings unless relatable to the times sought to be taxed as escaped income . Indeed, in the reassessment proceedings for bringing to tax items which had escaped assessment, it would be open to an assessee to put forward claims for deduction of any expenditure in respect of that income or the non-taxabi lity of the items at all. Keeping in view the object and purpose of the proceedings under s. 147 of the Act which are for the benefit of the Revenue and not an assessee, an assessee cannot be permitted to convert the reassessment proceedings as his appeal or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady disclosed/shown by assessee in the return of income originally filed and was also examined and allowed by AO while completing the assessment. Therefore, neither it is a fresh claim made by assessee which was not before AO during the original assessment nor it is a claim rejected by AO during original assessment, and reagitated by assessee during the assessment proceeding. In the aforesaid view of the matter, the decision in case of Sun Engineering Works cannot be applied to reject Form N. 10 filed by assessee. On the contrary, the contention of learned AR that assessee can file Form No. 10 even in course of reassessment proceeding is squarely covered by the decision of Hon ble Delhi High Court in case of Association of Corporation and Apex Societies of Handlooms Vs. ADIT (supra). As can be seen from the facts of the aforesaid case, for AYs 1998-99, 1999-00, and 2000-01, assessee did not furnish form No. 10 along with the return of income, but, were furnished during proceeding initiated u/s 147 of the Act. After assessee s claim of furnishing of form No. 10 during reassessment proceeding was rejected by AO as well appellate forums, when the matter was agitated before the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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