9911796707
TMI Blog2016 (4) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to assessment year 2002-03, the petitioner filed return of income on 22nd October, 2002 showing surplus of Rs. 95,917/- and also filed therewith Form No.10 for accumulation. Subsequently, a notice dated 04.03.2015 came to be issued under section 148 of the Act for assessment year 2008-09. In respect of the assessment year 2003-04, the petitioner filed return of income on 09.11.2003 showing deficit of Rs. 5,57,062/-. Subsequently, by the impugned notice dated 04.03.2015, the assessment for the assessment year 2009-10 is sought to be reopened under section 147 of the Act. For assessment year 2004-05, the petitioner filed return of income on 19.01.2005 showing deficit of Rs. 58,02,739/-. Subsequently, a notice dated 04.03.2015 came to be issued under section 148 of the Act seeking to reopen the assessment of the petitioner for assessment year 2010-11. In relation to assessment year 2006-07, the petitioner filed return of income on 28.12.2006 showing deficit of Rs. 38,28,090/-. Subsequently, by the impugned notice dated 04.03.2015 issued under section 148 of the Act, the assessment for assessment year 2012-13 is sought to be reopened. 4. The reasons for reopening of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to tax has escaped assessment. 6.1 Next, it was submitted that as per the reasons recorded for reopening the assessment in each of the assessment years, on the one hand it is the case of the Assessing Officer that the petitioner had not filed Form No.10 in assessment years 2002- 03, 2003-04, 2004-05 and 2006-07, whereas on the other hand he seeks to tax such amount in assessment years 2008-09, 2009-10, 2010-11 and 2012-13 respectively on the ground that the accumulated income had not been used within five years of such accumulation. Referring to the provisions of subsection (2) to section 11 of the Act, it was pointed out that it is only if any amount is accumulated as contemplated therein by filing Form No.10 that an obligation arises to spend such amount within the next five year. It was submitted that in the absence of any Form No.10 having been filed, there was no corresponding obligation to spend such amount within the next five years; and if there was no obligation to spend within the next five years, nothing is taxable in law in the assessment years under consideration because of non-spending within the five years. It was reiterated that in relation to assessment year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot that the Form No.10 has not been filed. It was contended that recording of facts regarding section 11(2) of the Act in the reasons is only an information and that the gist of the reasons is the applicability of sub-section (3) of section 11 of the Act. Therefore, on the reasons recorded, the formation of the belief that the income chargeable to tax has escaped assessment for the assessment years under consideration is wholly justified. Under the circumstances, there is no lack of jurisdiction on the part of the Assessing Officer, warranting interference by this court. 8. Before adverting to the rival submissions, it may be germane to refer to the reasons recorded by the Assessing Officer for the purpose of reopening the assessments for the assessment years under consideration. Since the reasons recorded for reassessment in relation to each of the assessment years are more or less similar, for the sake of convenience reference may be made to the reasons recorded for reopening the assessment for assessment year 2008-09 which read thus: "During the course of assessment proceedings pertaining to A.Y. 2011-12, on verification of the submission made by the A.R. of the assessee trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st. It is also the case of the Assessing Officer that as per the information received by him, the assessee (petitioner) had not filed Form No.10, resolution on or before the time allowed. Since five years allowed under section 11(2) of the Act have elapsed, according to the Assessing Officer, such amount has become chargeable to income under section 11(2) of the Act in the assessment years under consideration. 10. At this juncture reference may be made to the relevant statutory provisions. Section 11 of the Act makes provision for "Income from property held for charitable or religious purposes". Sub-section (2) of section 11, as it stood at the relevant time, provided that where seventy-five per cent of the income referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in terms of clause (a) of sub-section (2) of section 11. In the present case, in the reasons recorded for reopening the assessments, it is the specific case of the Assessing Officer that the petitioner has not filed Form No.10 in the prescribed manner and that the petitioner has not complied with the requirements of clause (a) of sub-section (2) of section 11 of the Act. As a necessary corollary it follows that no amount had been accumulated or set apart in assessment years 2002-03, 2003-04, 2004-05 and 2006-07. Thus, when no amount has been accumulated as required under clause (a) of sub-section (2) of section 11 of the Act, the question of nonutilization of such amount within a period of five years and consequently taxing the same in the sixth year by considering the same to be the deemed income of the trust would not arise. As rightly submitted by the learned counsel for the petitioner, if at all, in assessment years 2002-03, 2003-04, 2004-05 and 2006-07, the petitioner had not utilized the sums referred to in the reasons recorded by the Assessing Officer, without following the procedure prescribed under section 11(2) (b) of the Act for setting apart or accumulation of fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the lapse of a period of five years thereof in the assessment years under consideration. In the aforesaid premises, in the opinion of this court, on the reasons recorded by the Assessing Officer, he could not have formed the belief that income chargeable to tax has escaped assessment in the assessment years under consideration. The assumption of jurisdiction by the Assessing Officer under section 147 of the Act by issuing the impugned notices under section 148 is, therefore, without any authority of law. Consequently, the impugned notices cannot be sustained. 14. Insofar as assessment year 2008-09 is concerned, there is an additional factor which renders the impugned notice unsustainable. As pointed out by the learned counsel for the petitioner, for assessment year 2002-03, the petitioner had filed computation showing surplus of Rs. 95,917 only and for this it had filed Form No.10. Evidently, therefore, the Assessing Officer has not properly verified the facts from the record of assessment. This court in Sagar Enterprises v. Assistant Commissioner (supra) has held that when the officer concerned has taken into consideration an irrelevant fact, it cannot be said with certaint ..... X X X X Extracts X X X X X X X X Extracts X X X X
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