The Commissioner Of Income Tax,Trichy v. National College Council,P.b

IN THE HIGH COURT OF JUDICATURE AT Chennai DATED: 18.03.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMYANDTHE HON'BLE MRS.JUSTICE T.V. THAMILSELVI Tax Case Appeal No.584 of 2014 The Commissioner of Income Tax,Trichy. ...Appellant v. National College Council,P.B. No.369, Chattram Bus Stand,Trichy ... Respondent Prayer:Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961 against the order of the Income Tax AppellateTribunal, Chennai 'A' Bench, Chennai, dated 09.09.2011 passedin I.T.A.No.1057/Mds/2011 for the Assessment Year 2007-08,preferred against the order of the Commissioner of Income Tax(Appeals), No.44 Williams Road, Cantonment, Tiruchirapalli-620001,madeinITA.No.381/09-10,Dated:11-03-2011,GI.No/PA.No.AAATT6266H, year of Assessment 2007-2008 and aganistthe order of the Assisstant Commissioner of Income Tax CompanyCircle-II, Tiruchirapalli, made in PAN/GIR No. ,District/Ward/Circle, Company Circle II, Tirhcy, Status, AOP(Society), Assessment year:2007-2008 and date of order29/12/2009. For Appellant : Mr.J.Narayanasamy Senior Standing Counsel For Respondent : Mr.V.S. JayakumarJ U D G M E N T (Judgment was Delivered by M. DURAISWAMY, J) Challenging the order passed in I.T.A.No.1057/Mds/2011 inrespect of the Assessment Year 2007-08 on the file of the IncomeTax Appellate Tribunal, Chennai, 'A' Bench (for brevity, theTribunal), the Revenue has filed the above appeal. https://hcservices.ecourts.gov.in/hcservices/ 2. The appellant has raised the following SubstantialQuestion of Law for consideration: " Whether on the facts and the circumstancesof the case, the Tribunal was right in holdingthat revised Form 10 for accumulation of incomecan be furnished in the course of assessmentproceedings before the Assessing Officer and thereis no bar prohibiting the appellant from modifyingthe figure in the application and the AssessingOfficer can consider the revised Form 10 and allowthe accumulation of income ?" 3. The respondent trust was registered under section 12AAvide order dated 07.01.2002 with effect from the AssessmentYears 1999-2000 to 2001-2002. The assessee filed Form 10along with the return of income seeking accumulation of incomeof Rs.57,09,829/-. Subsequently, the assessee filed revisedForm 10 seeking accumulation of income of Rs.1,70,53,661/- forimprovement of infrastructure facilities etc. The AssessingOfficer did not consider the revised Form 10 as thejurisdiction vests only with the Commissioner of Income Tax andnot with the Assessing Officer. 4. Aggrieved over the order passed by the AssessingOfficer, the assessee filed an appeal before the Commissionerof Income Tax (Appeals) and the Commissioner of Income Tax(Appeals) held that revised Form 10 for accumulation of incomecan be furnished in the course of assessment proceedings andthere is no bar prohibiting the appellant from modifying thefigure in the application. 5. Aggrieved over the order passed by the Commissioner ofIncome Tax (Appeals), the Revenue has filed an appeal beforethe Income Tax Appellate Tribunal and the Tribunal alsoconfirmed the order of the Commissioner of Income Tax(Appeals) holding that revised Form 10 for accumulation ofincome can be furnished in the course of assessmentproceedings and there is no bar prohibiting the appellant frommodifying the figure in the application. 6. Aggrieved over the concurrent findings passed by theCommissioner of Income Tax (Appeals) and the Income TaxAppellate Tribunal, the Revenue has filed the above appeal. 7. Mr. V.S. Jayakumar, learned counsel appearing for therespondent submitted that the Tribunal as well as theCommissioner of Income Tax (Appeals) have concurrently held https://hcservices.ecourts.gov.in/hcservices/ 6. Aggrieved over the concurrent findings passed by theCommissioner of Income Tax (Appeals) and the Income TaxAppellate Tribunal, the Revenue has filed the above appeal. 7. Mr. V.S. Jayakumar, learned counsel appearing for therespondent submitted that the Tribunal as well as theCommissioner of Income Tax (Appeals) have concurrently held https://hcservices.ecourts.gov.in/hcservices/ that modified Form 10 may be furnished in the course ofassessment proceedings and there is no bar prohibiting theappellant from modifying the figure in the application. Whilearriving at the said conclusion, the Commissioner of Income Tax(Appeals) and the Tribunal followed the ratio laid down by thePunjab and Hariyana High Court in the Judgment reported in 318ITR 96 [Commissioner of Income Tax v. Simla Chandigarh DioceseSociety]. Further, in support of his contentions, thelearned counsel relied upon a Judgment of the Hon'ble SupremeCourt reported in (2001) 114 Taxman 255(SC) [Commissioner ofincome Tax v. Nagpur Hotel Owners'Association] wherein theHon'ble Supreme Court held as follows:- " ...... 5. We find substantial force in thisargument. Chapter III of the Act which consistsof Sections 10 to 13A enumerates various types ofincome which do not form part of total income for thepurpose of levy of tax. The relevant part of Section11 in the said Chapter reads thus :- "11. Income from property held forcharitable or religious purposes - (1) Subject tothe provisions of sections 60 to 63, thefollowing income shall not be included in thetotal income of the previous year of the personin receipt of the income - [(a) income derived from property held undertrust wholly for charitable or religiouspurposes, to the extent to which such income isapplied to such purposes in India; and, where anysuch income is accumulated or set apart forapplication to such purposes in India, to theextent to which the income so accumulated or setapart is not in excess of twenty-five per cent ofthe income from such property; x x x x [(2) (a) such person specifies, by notice inwriting given to the Assessing Officer in theprescribed manner, the purpose for which theincome is being accumulated or set apart and theperiod for which the income is to be accumulatedor set apart, which shall in no case exceed tenyears," 6. It is abundantly clear from the wordings ofsub-section (2) ofSection 11that it is mandatory forthe person claiming the benefit ofSection 11tointimate to the assessing authority the particularsrequired, under Rule 17 in Form No.10 of the Act. Ifduring the assessment proceedings the Assessing Officerdoes not have the necessary information, question of x x x x [(2) (a) such person specifies, by notice inwriting given to the Assessing Officer in theprescribed manner, the purpose for which theincome is being accumulated or set apart and theperiod for which the income is to be accumulatedor set apart, which shall in no case exceed tenyears," 6. It is abundantly clear from the wordings ofsub-section (2) ofSection 11that it is mandatory forthe person claiming the benefit ofSection 11tointimate to the assessing authority the particularsrequired, under Rule 17 in Form No.10 of the Act. Ifduring the assessment proceedings the Assessing Officerdoes not have the necessary information, question of excluding such income from assessment does not arise atall. As a matter of fact, this benefit of excludingthis particular part of the income from the net oftaxation arises fromSection 11and is subjected to theconditions specified therein. Therefore, it isnecessary that the assessing authority must have thisinformation at the time he completes the assessment. Inthe absence of any such information, it will not bepossible for the assessing authority to give theassessee the benefit of such exclusion and once theassessment is so completed, in our opinion, it would befutile to find fault with the assessing authority forhaving included such income in the assessable income ofthe assessee. Therefore, even assuming that there is novalid limitation prescribed under the Act and the Ruleseven then, in our opinion, it is reasonable to presumethat the intimation required underSection 11has to befurnished before the assessing authority completes theconcerned assessment because such requirement ismandatory and without the particulars of this incomethe assessing authority cannot entertain the claim ofthe assessee underSection 11of the Act, therefore,compliance of the requirement of the Act will have tobe any time before the assessment proceedings. Further,any claim for giving the benefit ofSection 11on thebasis of information supplied subsequent to thecompletion of assessment would mean that the assessmentorder will have to be reopened. In our opinion, the Actdoes not contemplate such reopening of the assessment.In the case in hand it is evident from the records ofthe case the respondent did not furnish the requiredinformation till after the assessments for the relevantyears were completed. In the light of the above, we areof the opinion that the stand of the Revenue that theHigh Court erred in answering the first question infavour of the assessee is correct, and we reverse thatfinding and answer the said question in the negativeand against the assessee. In view of our answer to thefirst question, we agree with Mr. Verma that it is notnecessary to answer the second question on the facts ofthe case. 8. On a reading of the said Judgment, it is clear that ifForm 10 is filed within the stipulated time and during thecourse of assessment proceedings before the Assessing Officer,there is no bar prohibiting the assessee from modifying thefigure in the application. Only in the case of revised Form 10being filed after the assessment proceedings, the same cannotbe accepted. The said ratio laid down by the Hon'ble SupremeCourt supports the case of the assessee. 9. It is not in dispute that the assessee filed Form 10within the stipulated time. Since the Assessing Officerdisallowed the claim of application in respect of thedepreciation, it filed a revised Form 10 enhancing the claim.The very intention of the assessee is to accumulate the surplusfor the subsequent years. As per the ratio laid down in theJudgment reported in 318 ITR 96 [ cited supra], modified Form10 may be furnished in the course of assessment proceedings andthere is no specific bar prohibiting the assessee frommodifying the figure of application. The order passed by theTribunal as well as the Commissioner of Income Tax (Appeals)are just and proper. 9. It is not in dispute that the assessee filed Form 10within the stipulated time. Since the Assessing Officerdisallowed the claim of application in respect of thedepreciation, it filed a revised Form 10 enhancing the claim.The very intention of the assessee is to accumulate the surplusfor the subsequent years. As per the ratio laid down in theJudgment reported in 318 ITR 96 [ cited supra], modified Form10 may be furnished in the course of assessment proceedings andthere is no specific bar prohibiting the assessee frommodifying the figure of application. The order passed by theTribunal as well as the Commissioner of Income Tax (Appeals)are just and proper. 10. In these circumstances, we do not find any ground muchless any substantial question of law to interfere with theorder passed byt he Tribunal. The Tax Case Appeal is liableto be dismissed. Accordingly, the Tax Case Appeal isdismissed. No costs. Sd/- Assistant Registrar(CS-IX) //True Copy// Sub Assistant Registrar Rj To 1.The Income Tax Appellate Tribunal, Chennai 'A' Bench, Chennai. 2.The Commissioner of Income Tax (Appeals) No.44, Williams Road, Contonment, Tiruchirapalli-620 001. 3.The Assistant Commissioner of Income Tax, Company Circle-II, Tiruchirapalli. +1cc to Mr.V.S.Jayakumar, Advocate, S.R.No.17817Tax Case Appeal No.584 of 2014 GSM(CO)CB(17/04/2021)