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TMI Blog2023 (12) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities from continuing the reassessment proceedings over the petitioner, else the petitioner will suffer grave and irreparable loss and injury; d. grant such other ad-interim ex-parte relief in terms of prayer (a)(b) and (c) above. 3. Learned counsel for the petitioner submitted that the petitioner is a society created on 14.02.2006 and got itself registered with the Registrar of Society, Uttar Pradesh under Societies Registration Act, 1860 bearing registration no. 1398/2005-06 for carrying out charitable work by imparting education through its institutions run by it. It had also the registered under section 12A of the Act on 25.09.2008 by the CIT-1, Kanpur, vide certificate of registration no. 630/1335/निबंधक/तकनीकी/कानपुर/2474. 4. The petitioner society was maintaining regular books of account and other records which were subjected to audit under section 12-A(b) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). For the year under consideration, that is, A.Y. 2013-14 it had filed its return on 31.03.2014 disclosing nil income after claiming exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is a society involved in running a educational institute(s). 2. Brief details of information collected/received by the AO: Return of income in this case was filed on 31.03.2014 at total income of Rs. Nil. Thereafter the case was selected under scrutiny and assessment was completed on 20.01.2016 at total income at Rs. Nil. From the records it is noticed that there was unapplied surplus income of Rs. 1,58,86,689/- for which assessee has submitted form 10 on 31.03.2014 for accumulation of aforesaid amount of surplus income. Under the provision of section 11(2), assessee had to submit the form 10 for accumulation of income upto the date of filing its return provided u/s 139(1) i.e. 30.09.2013 but it was submitted after due date as provided u/s 139(1) of IT Act,1961. 3. Analysis of information received: Since, there was unapplied surplus income of Rs. 1,58,86,689/- for which assessee has submitted form 10 on 31.03.2014 belatedly for accumulation of aforesaid amount of surplus income. Under the provision of section 11(2), assessee had to submit the form 10 for accumulation of income upto the date of filing its return provided u/s 139(1) i.e. 30.09.2013 but it was submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t regarding period for furnishing of Form - 10, the period provided under Rule 17. This period of filing on or before due date under section 139(1) which relates to the time period for furnishing of return, was provided only with effect from A.Y. 2016-17 by Finance Act, 2015. c) As per various judicial pronouncements time limit provided under Rule 17 was directive in nature and not mandatory. d) Reason to believe as recorded is wholly based on the review of Assessment Order made under section 143(3) of the Act which has taken cognizance of Form - 10 furnished by assessee belatedly but accepted by the Assessing Officer during the course of regular assessment proceedings, therefore, it amounts to review of assessment order; e) Reason to believe as recorded is vitiated by the legal mischief of the change of opinion. Reliance in this regard was placed on decisions of CIT Vs. Kelvinator of India Ltd., reported in (2010) 320 ITR 561 (SC), H. K. Buildcon Ltd. Vs. ITO, reported in (2011) 339 ITR 535 (Guj.) and Jagran Prakashan Ltd. Vs. CIT, reported in (2014) 226 Taxman 36 (Alld.); f) First proviso to section 147 is applicable as there is no failure on the part of the Petitioner So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntra, learned counsel for the respondents supported the initiation of reassessment proceedings, the order passed on March 3, 2022 and the assessment order passed on March 19, 2022. Learned counsel submitted that non filing of Form-10 within time is fatal in nature and the petitioner could not have claimed the exemption under Section 11 of the Act if such form was not filed within time. He further submitted that the factual aspect of late receiving of Form-10 came to the knowledge of the Assessing Officer on a later date and accordingly amounts to new material. He also submitted that this clearly shows that it is not a mere change of opinion that has led to the initiation of reassessment proceedings. Analysis and Conclusion 13. Before entering into the controversy, we would like to put on record the relevant Section 11(2) of the Act and Rule 17 of the Rules. The same are provided below: "Section 11(1).......................... (2) Where [eighty-five] per cent of the income referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that subsection is not applied, or is not deemed to have been applied, to charitable or religious purposes in India dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment is so completed, it would be futile to find fault with the assessing authority for 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. It is reasonable to presume that the intimation required under section 11 has to be furnished before the assessing authority completes the concerned assessment. In the present case, the application under section 11(2) was not filed with the return. The information, however, was given during the process of the assessment, before the assessment was completed. The assessee had given notice under section 11(2)(a) of the Act read with rule 17 of the Rules of 1962 for accumulation of income to the Additional Commissioner of Income-tax. The Assessing Officer, however, did not consider the contention of the assessee. 9. We do not find substance in the contention of Shri Shambhu Chopra that unless the information, which was otherwise provided by the assessee is furnished in Form 10, the Assessing Officer could not have taken into consideration and was entitled to reject it. The benefit of the exemption is on setting apart of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 of the requirement of the Act will have to be any time before the assessment proceedings." Emphasis Added 16. One may also refer to judgment of CIT Vs. Sakal Relief Fund, reported in (2017) 81 taxmann.com 396 (Bombay)/[2017] 248 Taxman 31 (Bombay) wherein their lordships have observed and held as under: "12. Today when the matter was called out, Mr. Tejveer Singh, learned Counsel for the Revenue does not dispute the fact that the decision of the Delhi High Court in Association of Corporation and Apex Societies of Handlooms (supra) and of this Court in Trustees of Tulsidas Gopalji Charitable and Chaleshwar Temple Trust (supra) would apply to the present facts. Therefore, Revenue accepts that even if the Form 10 is filed during the re-assessment proceedings, the benefit of accumulation under Section 11(2) of the Act is available. So also, the time allowed in Rule 17 of the Rules for furnishing the form before the expiry of time to file the return of income under Section 139(1) of the Act get extended to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 15. Therefore, the proposed question as framed, for the above reasons, do not give rise to any substantial question of law. Hence, not entertained. 16. Accordingly, Appeal dismissed. No order as to costs." 17. In the light of above judgments, it is crystal clear that Form-10 under Rule 17 of the Rules is required to be filed before the Assessing Officer before he completes the assessment. In a case, where Form-10 is filed late but is filed before the Assessing Officer completes the assessment, benefit of Section 11(2) of the Act shall be available to the assessee. From a reading of impugned notice, the order dated March 3, 2022 and assessment order dated March 19, 2022, it appears that the Assessing Officer has paid no heed to the ratio laid down in the judgment of the Supreme Court and various High Courts including the Coordinate Bench of this Court. 18. We, accordingly, have no hesitation in holding that the entire process of reassessment that has been initiated by the Department holds no water and is without any legal basis whatsoever. 19. In light of the above, we quash the notice dated 31.03.2021 issued under Section 148 of the Act, order passed rejecting the object ..... X X X X Extracts X X X X X X X X Extracts X X X X
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