The Impugned Order Relies On The Decision Of Thehon'ble Supreme Court In Commissioner Of Income Tax v. Nagpurhotel Owner's Association [2001] 144 Taxman 2559 When Thehon'ble Supreme Court Held As Under

THE HONOURABLE MR. JUSTICE C.SARAVANAN M/s.Sriram Educational Trust,Rep by its Secretary Mr.M.D.Rajkumar,No.49, Anna Salai,Chennai – 600 002. ... PetitionerVs. PRAYER:- Writ Petition is filed under Article 226 of theConstitution of India praying for the issuance of Writ ofCertiorarified Mandamus, to call for the records of the firstrespondent to quash the impugned order in F.No.CIT(E)/No.26(3)/2015-16 dated 23.11.2015 in PAN: andconsequently direct the first respondent to admit Form No.10filed for the Assessment years 2006-07 to 2010-11 to fortifytheir claim of tax exemption u/s 11 of the Act. For Respondents : Mr.Prabhu Mukunth Arunkumar Standing Counsel The petitioner has challenged the impugned order dated23.11.2015 passed by the first respondent under Section 119(2)(b) of the Income Tax Act, 1961. By the impugned order, thefirst respondent has rejected the request of the petitionerhttps://hcservices.ecourts.gov.in/hcservices/for delay in filing Form 10 for the Assessment years 2006-07, 2007-08, 2008-09, 2009-10 and 2010-2011. 2.The petitioner had filed an application for condonationof the delay in filing Form 10 on 23.06.2014 before the 1[st]respondent after the petitioner was denied the benefit ofSection 10(23C)(vi) for these Assessment years in the re-assessment order dated 31.03.2014. The reasons given in theimpugned order while rejecting the request of the petitionerread as under: 8.I have considered the applications forcondonation of delay along with the enclosures,reports of the AO and Additional CIT(Exemptions),the record and the submissions of the assesseetrust. It is undisputed that the assesee Trustfiled Form 10 with CIT (Exemptions) along with arequest for condonation of delay on 23.06.2014,while the assessments were already completed by31.03.2014. The submissions of the assessee Trustthat Form 10BB filed along with the originalreturn when 10(23C)(vi) registration was valid hasto be considered as Form 10 filed before the AO inreassessmentproceedingsinitiatedaftercancellation of 10(23C)(vi) registration is nottenable. On the date of receipt of notice u/s148the assessee was aware that registration u/s10(23C)(vi) was no longer available to it. FurtherForm 10 BB and Form 10 are not one and the same.This explanation of the assessee Trust thereforecannot add any strength to the request of theassessee Trust for condonation of delay in filingof Form 10. 10.In the present case, for Assessment years2006-07 to 2010-11 the applicant did not file FormNo.10 before assessing officer before completionof assessment. Therefore, following the decisionof the Hon'ble Supreme Court (supra), thepetitions requesting condonation of delay infiling Form No.10 for Ays 2006-07 to 2010-11 arerejected. 3.The impugned order relies on the decision of theHon'ble Supreme Court in Commissioner of Income Tax Vs NagpurHotel Owner's Association [2001] 144 TaxMan 2559 when theHon'ble Supreme Court held as under:- ''........the intimation required underSection 11 has to be furnished before theassessing authority completes the concernedassessment because such requirement ismandatory and without the particulars of thisincome, the assessing authority cannotentertain the claim of the assessee underhttps://hcservices.ecourts.gov.in/hcservices/Section 11, therefore, compliance of the requirement of the Act will have to be any timebefore the Assessment proceedings. Further,any claim for giving the benefit of section 11on the basis of information supplied subsequentto the completion of assessment would mean thatthe assessment order will have to be reopenedin our opinion, the Act does not contemplatesuch reopening of the assessment.......'' ''........the intimation required underSection 11 has to be furnished before theassessing authority completes the concernedassessment because such requirement ismandatory and without the particulars of thisincome, the assessing authority cannotentertain the claim of the assessee underhttps://hcservices.ecourts.gov.in/hcservices/Section 11, therefore, compliance of the requirement of the Act will have to be any timebefore the Assessment proceedings. Further,any claim for giving the benefit of section 11on the basis of information supplied subsequentto the completion of assessment would mean thatthe assessment order will have to be reopenedin our opinion, the Act does not contemplatesuch reopening of the assessment.......'' 4.Before the 1[st] respondent it was stated that thepetitioner Trust had filed the return of Income declaringincome as Nil claiming exemption under Section 10(23C)(vi).The Form 10BB was filed under a bona fide belief that thepetitioner was entitled to exemption under Section 10(23C)(vi). However, subsequent to withdrawal of registrationgranted under Section 10(23C0(vi), fresh Form 10 was filed bythe petitioner Trust claiming exemption under Section 11 and12 of the Act. 5.It is therefore submitted that the revised Form 10 wasonly a replacement of the Form 10 that was originally filedclaiming exemption under Section 10(23C)(vi). It is submittedthat the petitioner had already filed Form 10 and the revisedForm 10 was only a replacement to the original. Hence, thedecision of the Hon'ble Supreme Court is for not applicable tothe facts of the case of the petitioner. 6.It is further submitted that after the Assessment orderdated 31.03.2014 were passed for these Assessment year, theAssessments were reopened by issuing notice under Section 148of the Income Tax Act, 1961. Under these circumstances, thepetitioner had filed appeal before the Commissioner of IncomeTax (Appeals) who by his order dated 18.02.2015 rejected theappeal is filed by the petitioner. The petitioner thereforefiled appeal before Income Tax Appellate Tribunal. 7.Pending disposal of the above appeals before Income TaxAppellate Tribunal, impugned order dated 23.11.2015 has beenpassed by the 1[st] respondent. It is submitted that by an orderdated 04.03.2019, the Income Tax Appellate Tribunal has nowremitted the case back to the Assessing Officer to re-examinethe claim of the petitioner under Section 11 of the Act.Appellate Tribunal, impugned order dated 23.11.2015 has beenpassed by the 1[st] respondent. It is submitted that by an orderdated 04.03.2019, the Income Tax Appellate Tribunal has nowremitted the case back to the Assessing Officer to re-examinethe claim of the petitioner under Section 11 of the Act. 8.Learned counsel for the petitioner relies on thedecision of the Hon'ble Supreme Court in Hon'ble SupremeCourt in National Thermal Power Company Limited Vs. CIT [1998]229 ITR 383 wherein it was held as follows:decision of the Hon'ble Supreme Court in Hon'ble SupremeCourt in National Thermal Power Company Limited Vs. CIT [1998]229 ITR 383 wherein it was held as follows: As a result of a judicial decision givenwhile the appeal is pending before theTribunal, it is found that a non-taxable itemis taxed or a permissible deduction isdenied, there is no reason why the assesseeshould be prevented from raising thathttps://hcservices.ecourts.gov.in/hcservices/question before the Tribunal for the firstwhile the appeal is pending before theTribunal, it is found that a non-taxable itemis taxed or a permissible deduction isdenied, there is no reason why the assesseeshould be prevented from raising thathttps://hcservices.ecourts.gov.in/hcservices/question before the Tribunal for the first time, so long as the relevant facts are onrecord in respect of the item. There is noreason to restrict the power of the Tribunalunder Section 254. As a result of a judicial decision givenwhile the appeal is pending before theTribunal, it is found that a non-taxable itemis taxed or a permissible deduction isdenied, there is no reason why the assesseeshould be prevented from raising thathttps://hcservices.ecourts.gov.in/hcservices/question before the Tribunal for the firstwhile the appeal is pending before theTribunal, it is found that a non-taxable itemis taxed or a permissible deduction isdenied, there is no reason why the assesseeshould be prevented from raising thathttps://hcservices.ecourts.gov.in/hcservices/question before the Tribunal for the first time, so long as the relevant facts are onrecord in respect of the item. There is noreason to restrict the power of the Tribunalunder Section 254. Under Section 254 of the Income Tax Act,1961, the Appellate Tribunal may, aftergiving both the parties to the appeal anopportunity of being heard, pass such ordersthereon as it thinks fit. The power of theTribunal in dealing with appeal is, thus,expressed in the widest possible terms. Thepurpose of the assessment proceedings beforethe taxing authorities is to assess correctlythe tax liability of an assessee inaccordance with law. If, for example, as aresult of a judicial decision given while theappeal is pending before the Tribunal, it isfound that a non-taxable item is taxed or apermissible deduction is denied, there is noreason why the assessee should be preventedfrom raising that question before theTribunal for the first time, so long as therelevant facts are on record in respect ofthe item. There is no reason to restrict thepower of the Tribunal under Section 254 onlyto decide the grounds which arise from theorder of the commissioner of Income-tax(Appeals). Both the assessee as well as theDepartment have a right to file anappeal/cross-objections before the Tribunal.The Tribunal should not be prevented fromconsidering questions of law arising inassessment proceedings, although not raisedearlier. The view that the Tribunal isconfined only to issues arising out of theappeal before the Commissioner of Income-tax(Appeals) is too narrow a view to take of thepowers of the Tribunal. 9.Learned counsel for the petitioner also relies on thedecision of the Gujarath High Court in Commissioner of Income-tax Vs. Mayur Foundations [2005] 274 ITR 562 (Gujarat),wherein it was held as follows: Undoubtedly, the Tribunal has thediscretion to allow or not to allow a newground to be raised. But where the Tribunalis only required to consider the question oflaw arising from facts which are on record inthe assessment proceedings, there is no reasonwhy such a question should not be allowed tobe raised when it is necessary to considerthat question in order to correctly assess thehttps://hcservices.ecourts.gov.in/hcservices/tax liability of an assessee. Undoubtedly, the Tribunal has thediscretion to allow or not to allow a newground to be raised. But where the Tribunalis only required to consider the question oflaw arising from facts which are on record inthe assessment proceedings, there is no reasonwhy such a question should not be allowed tobe raised when it is necessary to considerthat question in order to correctly assess thehttps://hcservices.ecourts.gov.in/hcservices/tax liability of an assessee. Thus, the proceedings before the Tribunalare meant to correctly assess the taxliability of an assessee: If this be so, itfollows that the assessment proceeding cannotbe said to be complete and is pending till theappeal is heard and disposed of by theTribunal and the order of the Tribunal isgiven effect to by the Assessing authority bycomputing the correct tax liability of anassessee. In other words, whether an assesseeis required to pay tax or becomes entitled toa refund, would be ascertained by theassessing authority after giving effect to theorder of the Tribunal.In these circumstances, in the presentcase, the Tribunal was well within itsjurisdiction to entertain the new ground bywhich the assessee claimed the benefit underSection 11(2) of the Act and adjudicate theTax liability of the assessee. As alreadynoticed hereinbefore, the Tribunal hascategorically found that ''the additionalground involves the question relating tointerpretation of Section 11(2) and the factson the basis of which such a decision is to begiven regarding interpretation of Section 11(2) are not at all in dispute''. In thecircumstances, there is no infirmity in theorder of the tribunal, holding that theassessee is entitled to benefits allowableunder Section 11(2) of the Act. The question referred to the Court isaccordingly answered in the light of theopinion expressed herein before in favour ofthe assessee and against the Revenue. There shall be no order as to costs. 10.It is therefore submitted that the above decision ofthe Gujarat High Court, squarely applies to the facts of theAct entertain new grounds by which the assessee claim benefitunder Section 11(2) of the Act and adjudicate the liability ofthe assessee. 11.Defending the impugned order, the learned counsel forthe Income Tax Department submits that since the matter hasbeen remitted back to the Assessing officer by the Tribunal byits order dated 4.03.2019 referred to supra, the issues as towhether the petitioner was entitled to benefit of Section 11of the Income Tax Act can be decided independently in thelight of the decision of the Gujarat High Court and there isno necessity for setting aside the impugned order in as muchas the application for condoning the delay in filing form 10where beyond the limitation prescribed under Section 11(2) ofhttps://hcservices.ecourts.gov.in/hcservices/the Income Tax Act. He therefore prays for a dismissal of the writ petition. 12.I have considered the arguments advanced by thepetitioner and the respondent. The application for condoningthe delay in filing Form 10 for the Assessment years werefiled on the strength of Circular No. 273 F.No.180/57/15 IT(A1) dated 03.06.1980. Subsequently, during the pendency ofthis writ petition, two others circular namely CircularNo.7/18 dated 20.07.2018 and 10/19 dated 22.05.2019 have beenissued for giving guidelines for condoning the delay. writ petition. 12.I have considered the arguments advanced by thepetitioner and the respondent. The application for condoningthe delay in filing Form 10 for the Assessment years werefiled on the strength of Circular No. 273 F.No.180/57/15 IT(A1) dated 03.06.1980. Subsequently, during the pendency ofthis writ petition, two others circular namely CircularNo.7/18 dated 20.07.2018 and 10/19 dated 22.05.2019 have beenissued for giving guidelines for condoning the delay. 13.No doubt, there was a delay in filing Form 10 as theoriginal returns filed by the petitioner were predicated forexemption under Section 10(23C)(vi) of the Income Tax Act,1961. However, the said recognition was withdrawn on14.03.2013 and therefore the petitioner as now claimed foralternate exemption under Section 12(a) read with Section 11of the Income Tax Act, 1961. Though section 11(ii)contemplates filing of the required form namely Form 10 has tobe filed in the prescribed manner for the aforesaid purposeRule 17 of the Income Tax Rules has been provided. Form 10and Form 10B have been prescribed for the aforesaid purpose.The petitioner could not have filed the Form 10 at the time offiling of the original returns on various dates which havebeen referred to the impugned order at the time during 2007for the respective Assessment years. 14.Since the benefit of Section 10(23C)(vi) of the IncomeTax has been denied, the benefit of Section 11 of the IncomeTax cannot be denied as the petitioner was otherwise eligibleto avail such benefit. Ultimately, the purpose of Assessmentand Re-assessment is to arrive at the correct tax liabilityand therefore substantive benefit available to the assesseecannot be denial merely on the ground that the Form 10 was notfiled at the time of filing of the returns under Section 139of the income tax act, 1961. 15.The facts of the case indicates that the respectiveAssessment orders came to be passed pursuant to the withdrawalof the registration under Section 10(23C)(vi). The Tribunalhas also remitted the case back to the Assessing officer.Even though, the respondent has rejected the application forcondonation of delay in filing Form 10 under Section 119 ofIncome Tax Act read with the aforesaid circular, I am of theview, the Assesssing officer has to pass an independentAssessment order uninfluenced by the reasons given in theimpugned order rejecting condonation of delay. Benefit ofexemption is to be extended to the assesse and it would be nopart of the duty of the Assessing officer to deny benefit thatare otherwise available to assessee under the provisions ofthe Income Tax Act, 1961. 16.In the light of the above discussion, I remit the casehttps://hcservices.ecourts.gov.in/hcservices/back to the respondent to pass a speaking order uninfluenced by the reasons given in the impugned order for rejecting theapplication for condonation of delay in filing Form 10 byextending the benefit of Section 11. If the petitioner wasotherwise entitled to exemption under Section 11 of the IncomeTax Act, 1961, it should be extended. Since the casepertains to the Assessment years 2006-2007 to 2010 -2011 andthe Assessments have been kept pending in view of the parallelproceedings before this Court and the Appellate Authorityunder the Income Tax Act, the Assessing Officer may take upthe proceedings and complete the Assessment proceedings withina period of three months from the date of receipt of a copy ofthis order. 17.Writ petition disposed of with the above observations.No costs. Consequently, connected Miscellaneous Petition isclosed. Sd/-Assistant Registrar //True Copy//Sub Assistant RegistrarjasTo1.The Commissioner of Income Tax Exemptions, Income Tax Department, 121, Mahatma Gandhi Road, Chennai – 600 034.2.The Income Tax Appellate Tribunal, Chennai Bench, Rajaji Bhavan, Second Floor, Besant Nagar, Chennai – 600 904. 17.Writ petition disposed of with the above observations.No costs. Consequently, connected Miscellaneous Petition isclosed. Sd/-Assistant Registrar //True Copy//Sub Assistant RegistrarjasTo1.The Commissioner of Income Tax Exemptions, Income Tax Department, 121, Mahatma Gandhi Road, Chennai – 600 034.2.The Income Tax Appellate Tribunal, Chennai Bench, Rajaji Bhavan, Second Floor, Besant Nagar, Chennai – 600 904. 3.The Deputy Commissioner of Income Tax (Exemptions), Income Tax Department, 121, Mahatma Gandhi Road, Chennai – 600 034.+1cc to Mr.S.Sridhar, Advocate, S.R.No. 14467+1cc to Mr.Hema Muralikrishnan, Advocate, S.R.No. 13573 BR(CO)GN(12/07/2021) W.P.No.29557 of 2016andW.M.P.No.25567 of 2016 https://hcservices.ecourts.gov.in/hcservices/