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TMI Blog2014 (9) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... parting education by running a school in the name of Colonel's Central Academy"" ('CCA' in short). During the course of assessment proceedings, the Assessing Officer observed that the gross receipts of the society were to the tune of Rs. 11,28,45,095/- out of which the receipts in the name of society were Rs. 8,50,20,248/- and the receipts in the name of CCA School was Rs. 2,78,24,819/-. Against the aforesaid gross receipts, the application of funds was only to the extent of Rs. 2,20,36,589/- and the income not applied for the purpose of education was Rs. 7,38,81,711/-. In the return of income, the assessee claimed exemption of income u/s 10(23C)(vi) of the Act. However, the assessee's approval u/s 10(23C)(vi) was rejected by the CCIT, Panchkula for Assessment Year 2007-08 vide order dt. 29.9.2008. Hence, the assessee was not eligible for exemption u/s 10(23C) of the Act. The Assessing Officer proposed to add the unspent amount of Rs. 7,38,81,711/- to the income of the assessee. The assessee alternatively claimed exemption u/s 11(1) of the Act. The Assessing Officer rejected the claim since the required report in Form no.10B was not furnished along with the return of income. The gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve and mandatorily required details of amount of income accumulated or set apart or the period of accumulation of setting apart of such income, as a valid compliance of Rule 17 of Income Tax Rules and the Form No.l0. 3. that the Ld. CIT(A) has acted in violation of Rule 46A of the Income Tax Rules by accepting the Form No. lOB at the appellate stage without giving due opportunity of being heard to the Assessinq Officer. 4. On the facts and in the circumstances of the case, the Ld. C!T(A) has erred on facts and in law in holding that the filing of Form No. 10BB is substantive compliance of Rule 17B and filing of Form No. lOB, principally when the requirement of giving particulars under Rule 17B and giving particulars in From No. lOB are entirely different from that of Form No. 10BB & corresponding Rule. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred on facts and in law in treating the land held by Society at Dhorka (Gurgaon) as a property held wholly for charitable purposes within the meaning of section l1(lA)(a) of the Act and thereby treating the sale consideration thereof as income received for charitable purposes and eligible for accumulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer held that the assessee will not be eligible for exemption u/s 11 and 12 of the Act are: (a) benefit has been extended to a person referred to in S.13(3) of the Act the assessee is not eligible for exemption u/s 11 of the Act; (b) the assessee has not applied its income to the extent of 85% for charitable purposes; (c ) the assessee is not entitled to exemption u/s 11(1A) of the Act, in respect of investments in purchase of another land on transfer of the land. 5.1. The Ld.CIT(Appeals) granted relief to the assessee by holding that: (a) there is no dispute that the assessee Society is registered u/s 12AA of the Income Tax Act by the order of the Ld.CIT, Faridabad dt. 13.3.2003. Hence it is a charitable society; (b) the assessee society also enjoyed exemption u/s 10 (23)(C)(vi) of the Act as per approval granted by the Chief Commissioner of Income Tax, Haryana Region, Panchkula vide order dt. 26.2.2007 for the Assessment Year 2002-03, 2004-05. This exemption was extended for the Assessment Year 2005-06. The assessee's application for extension of the exemption for the Assessment Year 2006-07, 2007-08 was rejected by the CCIT, Panchkula. The assessee approa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinitely entitled to claim deduction u/s 11 of the Act as registration u/s 12AA is in force. 6. Ground no.2 is on the issue of filing a defective form no.10. There was a typographical error and the Ld.CIT(Appeals) held that, when form no.10 is read with the accompanied resolution, the question of anti dating does not arise. We agree with the Ld.Commissioner of Income Tax (Appeals) that this error in Form No.10 is a typographical error and that substance over form has to be the basis of decision. Hence we uphold these findings of the Ld.CIT(A) and dismiss this ground. In the result ground no.2 is dismissed. 7. Ground nos. 3 and 4 are on the issue of Ld.CIT(Appeals) accepting audit report in Form no.10B. Admittedly audit report in Form 10B was filed before the Ld.CIT(Appeals). The assessee had, instead of filing Form No.10B, filed an audit report in form no.10BB, before the Assessing Officer. The audited accounts along with the statements annexed giving necessary particulars were filed along with the audit report in Form no.10BB, before the Assessing Officer. The Ld.CIT(Appeals) relying on the decisions in the case of CIT vs. Rai Bahadur Bissesswarlal Motilal Malwasie Trust, repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the grounds of appeal before or at the time of hearing and all the above grounds are without prejudice to each other." The grounds raised in the assessee's appeal are taken up along with ground nos. 5, 6, 7 and 8 of the Revenue appeal. 10. The facts are as follows. The assessee purchased land at Dhorka on 10-1-2001 and on 21-11-03. This land was sold on 23-01-2007. In the minutes of the meeting held on 11-11-2006 the society recorded that this land at Dhorka is likely to be acquired as it was in the Industrial Zone, in view of the Gurgoan Master Plan and hence it should be disposed off at the earliest and the money received should be re-invested in purchase of another land which is suitable for education al institution and a vocational institute, within the vicinity of Gurgaon after obtaining necessary CLU. The profit on the sale of land was Rs. 8,44,78,458-00. 11. The issue that is before us is the computation of exempt income U/s 11(1). 11.1. The Hon'ble Calcutta High court in the case of CIT Vs Eastern Charitable Trust reported in 206 ITR 152 held as follows. "The Definition of income contained in Sec.2 (24) includes capital gains. Hence the option exercisable by a char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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