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TMI Blog2016 (1) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... n the stipulated time. On 02-08-2006 notice u/s.142(1) was issued for filing the return of income and the assessee was directed to appear on 29-08-2006 for the assessment purpose which was also not complied with. Subsequently, the case was transferred and fresh notice u/s.142(1) was issued by the new Assessing Officer. Finally the return of income was filed on 13-12-2006 declaring loss of Rs. 17,62,802/- after claiming exemption of Rs. 28,25,578/- as exemption u/s.11 of the I.T. Act. 3. During the course of assessment proceedings the AO noted that although the assessee has filed the return of income for the impugned assessment year, however, no audited accounts have been submitted. No declaration in Form No.10 r.w. Rule 17 of the I.T. Rules, 1961 has been filed for enabling the department to verify the genuineness of the trust with regard to the income/receipt of any kind or its application for the objects of the trust or the accumulation of the surplus in manner prescribed u/s.11 of the I.T. Act. No returns have been filed for the subsequent years also. 4. From the various details furnished by the assessee the AO noted that the trust has total funds of Rs. 1,32,37,720/- as on 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upons, in denomination of Rs. 5/- to Rs. 1,000/- and considering that the average donation per person would be Rs. 50/- which will require contributions from about 41,400 persons to collect Rs. 20.70 lakhs and about 4000 volunteers and as many villages to approach and collect from 100 villagers. According to the AO where more than 50% of the rural population is illiterate, the writing on the pre-printed coupons allegedly supplied by the trust to such volunteers hardly makes any sense. The collections could not be called voluntary or with a direction to be towards the development fund. The assessee trust has not shown any expenses in its books towards the printing of such coupons with pre-printed direction for the development fund or produced such bills/vouchers evidencing the expenditure. He, therefore, held that the transactions are not genuine. The AO referred to the search action u/s.132 on 20-07-2005 carried out in the case of Shri R.K. Shinde, Accounts Manger of Bharati Vidyapeeth group of trusts and institutions, Pune. During such search cash amounting to Rs. 3,14,83,870/- was found and seized along with loose papers in the form of slips containing names of the aspiring stude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had also taken the second additional ground which relates to the requirement of filing of Form No.10 and the third additional ground pertain to a loan stated to have been given to Bharati Vidyapeeth, Pune. 9. So far as the validity of assessment u/s.147 is concerned the Ld.CIT(A) upheld the action of the AO. The Ld. Counsel for the assessee during the hearing of the appeal also did not press for the above ground. Therefore, we are not concerned with this issue. 10. So far as the ground relating to denial of benefit of exemption u/s.11 for non submission of Form No.10 along with return of income is concerned, it was argued that Form No.10 can be filed at any time during the assessment proceedings or even before the appellate authorities. For the above proposition the assessee trust relied upon the decision of the Pune Bench of the Tribunal in the case of Hastimal Sancheti Research Foundation vide ITA No.225/PN/2008 order dated 26-03-2010 for A.Y. 2004-05. It was argued that as there was no assessment u/s.143(3) in this case and action u/s.148 was the only assessment, there was no occasion to submit Form No.10 in any other proceedings. It was argued that when the AO decided to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with the return. 3.1] The learned CIT(A) failed to appreciate that simply because the assessee had not filed Form No. 10 along with the return, there was no reason to deny the exemption u/s.11 particularly because the assessee had filed the Form No. 10 in the appellate proceedings. 3.2] The learned CIT(A) erred in not appreciating that in the original return filed by the assessee, there was no income which was to be accumulated and hence, the assessee had not filed Form No. 10 along with the return and as the same was filed in appellate proceedings, the exemption u/s.11 should have been allowed. 4] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal." 13. The Ld. Counsel for the assessee did not press Ground of appeal No.1 for which the Ld. Departmental Representative has no objection. Accordingly, the said ground is dismissed as 'not pressed'. 14. So far as the remaining grounds are concerned, the Ld. Counsel for the assessee submitted that the assessee is a part of Bharati Vidyapeeth group. The search took place at the premises of Mr. R.K. Shinde on 20-07-2005 who was the Accounts Manager of Bharati Vidyapeeth group. No search wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal after considering various decisions has allowed the exemption u/s.11 which was earlier denied on account belated filing of Form 10 by the assessee. 18. Referring to the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Mayur Foundation reported in 274 ITR 562 he submitted that the Hon'ble High Court in the said decision has held that proceedings before the Tribunal are meant to correctly assess the tax liability of 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 has given effect to by the assessing authority by computing correct tax liability of an assessee. In other words where the assessee is required to pay tax or becomes entitled to, a refund would be ascertained by the assessing authority after giving effect to the order of the Tribunal. 19. Referring to the decision of the Pune Bench of the Tribunal in the case of M/s. Mateshwari Developers Vs. ITO and vice versa vide consolidated order dated 30-01-2015 for A.Yrs. 2005-06 and 2006-07 he submitted that the Tribunal in the said decision has held that thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Patangrao Kadam Pratishthan vide ITA No.289/PN/2011 for A.Y. 2006-07. We, vide our order of even date have discussed the issue and held as under : "19. We have considered the rival arguments made by both the sides, perused the orders of the AO & CIT(A) and the Paper Book filed on behalf of the assessee. Since the coupon donation receipts do not contain the complete address of the donors, the name of the recipient on behalf of the Trust and there is no written direction by the donor to treat the donation towards corpus of the Trust, therefore, we are of the considered opinion that such donations cannot be considered as corpus donations. However, the alternate submission of the learned counsel for the assessee that the same should be considered as revenue receipts is acceptable. Since in the preceeding paras we have held that there is no violation of provisions of section 11(5) r.w.s. 13(1)(d) and also held that exemption u/s.11 cannot be denied for late filing of Form No.10, therefore, since the donations are treated as revenue receipts, it does not make any difference. We, therefore, hold that exemption u/s.11 is allowable on such donations. The grounds by the assessee are d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings opined that such donation will be treated as revenue receipt, the assessee filed Form No.10 during the assessment proceedings. It is also the submission of the learned counsel for the assessee that Form No.10 filed before the completion of assessment is valid and should be accepted. 12.1 We find the Hon'ble Supreme Court in the case of CIT Vs. Nagpur Hotel Owners Association reported in 247 ITR 201 (SC) has observed as under : "It is abundantly clear from the wording 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 Rules. 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 subjected to the conditions specified therein. Therefore, it is necessary that the assessing authority must have this information at the time he completes the assessment. In the absen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Hon'ble Gujarat High Court in the case of Mayur Foundation (Supra), assessment proceedings are complete when appeal against order of assessment is decided by the Tribunal. Various courts have time and again held that though filing of Form No.10 is mandatory to claim exemption under ss. 11 and 12 of the Act, the same can be filed at any time during the pendency of assessment proceedings. If so filed the benefit of accumulation of income for charitable purpose cannot be denied. We accordingly direct the AO to compute the income after allowing exemption under ss. 11 and 12 of the Act and also considering the application in Form No.10 regarding accumulation of surplus income for the purpose of objects of the trust". 12.3 In view of the above decisions we are of the considered opinion that the assessee can file Form No.10 at any time before completion of the assessment. We, therefore, do not agree with the findings of the CIT(A) that the assessee was not permitted to file Form No.10 in the reassessment proceedings and that the decision of Hon'ble Supreme Court in the case of Nagpur Hotel Owner's Association is not applicable in the facts of the present case. This view of ours der ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r having included such income in the assessable income of the assessee. Therefore, even assuming that there is no valid limitation prescribed under the Act and the Rules even then, in our opinion, it is reasonable to presume that the intimation required under Section 11 has to be furnished before the assessing authority completes the assessment concerned because such requirement is mandatory and without the particulars of this income the assessing authority cannot entertain the claim of the assessee under Section 11 of the Act, therefore, compliance with the requirement of the Act will have to be any time before the assessment proceedings. Further, any claim for giving the benefit of Section 11 on the basis of information supplied subsequent to the completion of assessment would mean that the assessment order will have to be reopened. In our opinion, the Act does not contemplate such reopening of the assessment. In the case in hand it is evident from the records of the case that the respondent did not furnish the required information till after the assessments for the relevant years were completed. In the light of the above, we are of the opinion that the stand of the Revenue that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion we are of the considered opinion that since the Form No.10 was filed prior to completion of assessment, therefore, the assessee is entitled to benefit of section 11 of the I.T. Act. We therefore set aside the order of the CIT(A) on this issue and the grounds raised by the assessee are allowed." 8.2 Since facts of the present case are identical to the facts of the case cited above, therefore, following the same ratio, the above grounds by the assessee are allowed." 26. Further, the Coordinate Bench of the Tribunal in the case of M/s. Mateshwari Developers Vs. ITO vide ITA No.214/PN/2009 for A.Y. 2005-06 and batch of other appeals order dated 30-01-2015 following the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Mayur Foundation reported in 274 ITR 562 and the decision of the Pune Bench of the Tribunal in the case of Hastimal Sancheti Research Foundation Vs. ITO vide ITA No.225/PN/2008 order dated 26-03-2010 for A.Y. 2004-05 has held that audit report in Form 10CCB can be filed during appeal proceedings as the same are continuation of assessment proceedings. Since the assessee in the instant case has filed Form 10 before CIT(A) which is continuation of assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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