TMI Blog1998 (4) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... that the entire interest of Rs. 1,38,368 was not liable to be taxed in the assessment of 1971-72?" The facts in brief are as follows : The assessee is a waqf. The assessment year is 1971-72 for which the previous year ended by March 31, 1971. The claim of the assessee is that it is running an educational institution and it derived income therefrom in the accounting year relevant to the assessment year 1971-72 and the said income was exempt from income-tax under section 10(22) of the Income-tax Act. This contention was not accepted in the original assessment. The assessee filed an appeal against the said assessment before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner by his order dated January 31, 1977, set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r appeal to the Tribunal, it held that the income accrued is not includible in the income of the assessee for the assessment year 1971-72. At the instance of the Revenue, the first question was referred by the Tribunal for the opinion of this court. From the facts narrated above, the following position emerges : The due date for the purpose of filing the return is September 30, 1971. On May 30, 1975, the return was filed. On October 17, 1978, Form No. 10 was filed. On January 20, 1979, the assessment was completed. The original assessment dated January 31, 1971, was set aside. The question, therefore, is whether the notice issued on October 17, 1978, in Form No. 10 will enure to the benefit of the assessee so as to enable him to claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the reading of rule 17 of the Income-tax Rules, it is clear that the notice contemplated under section 11(2)(a) is to be issued within the time limit prescribed under section 139(1) and (2). Admittedly, in this case the notice was not issued within the time limit prescribed under section 139(1) and (2) of the Income-tax Act. The question, therefore, is whether the assessee is entitled to the benefit of section 11 of the Income-tax Act. As pointed out in the earlier para., rule 17 prescribes the time limit within which the notice is to be issued under section 11(2)(a) of the Act and not the section. It is not necessary for us to consider whether the said rule is ultra vires the provisions of the Act or whether it is valid, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the benefit under section 11(2) of the Income-tax Act. On the facts of the present case it is not disputed that the notice was issued under section 11(2)(a) read with rule 17 before the assessment is made. Therefore, as long as the notice was issued before the assessment is made the assessee is entitled to the benefit of section 11 of the Income-tax Act and the income itself accumulated is exempted from the payment of tax. In the light of the above, we answer the first question in the affirmative and against the Revenue. As regards the second question a sum of Rs. 1,38,368 which is the interest on enhanced compensation awarded by the court to the assessee, the Income-tax Officer brought the entire amount to tax in the year of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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