Pathania Education Society, Rohtak v. ITO, Rohtak

ITA 2334/DEL/2011 | 2007-2008
Pronouncement Date: 15-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 233420114 RSA 2011
Assessee PAN AAAAP0458Q
Bench Delhi
Appeal Number ITA 2334/DEL/2011
Duration Of Justice 2 month(s) 6 day(s)
Appellant Pathania Education Society, Rohtak
Respondent ITO, Rohtak
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 15-07-2011
Date Of Final Hearing 11-07-2011
Next Hearing Date 11-07-2011
Assessment Year 2007-2008
Appeal Filed On 09-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH F DELHI ] BEFORE SHRI RAJPAL YADAV JM AND SHRI K. D. RAN JAN AM I. T. APPEAL NO. 2334 (DEL) OF 2011 ASSESSMENT YEAR : 2007-08. PATHANIA EDUCATION SOCIETY THE INCOME-TAX OFFICER C/O. PATHANIA PUBLIC SCHOOL VS. W A R D : 4 ROHANA ROAD R O H T A K. R O H T A K. PAN / GIR NO. AAAAP 0458Q. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI NAVIN GUPTA ADV.; DEPARTMENT BY : MS. PRATIMA KAUSHIK SR. D . R.; O R D E R. PER K. D. RANJAN AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 07-08 ARISES OUT OF ORDER OF THE LD. CIT (APPEALS) ROHTAK. 2. THE FIRST ISSUE FOR CONSIDERATION RELATES TO CON FIRMING THE ADDITION OF RS.10 99 610/- BEING EXCESS INCOME OVER APPLICATION WHICH EXCEEDS LIMIT OF 15 PER CENT OF INCOME UNDER SECTION 11(1)(A) OF THE ACT. THE RELEVANT GROUND O F APPEAL IS REPRODUCED AS UNDER :- 2. THAT THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS.10 99 610/- AS AMOUNT IN EXCESS OF INCOME OVER APPLICATION WHICH E XCEEDS LIMIT OF 15 PER CENT OF INCOME UNDER SECTION 11(1)(A) OF THE I. T. ACT ALT HOUGH FORM 10 WAS FILED BEFORE THE LD. AO DURING ASSESSMENT PROCEEDINGS. 2 I. T. APPEAL NO. 2334 (DEL) OF 2011 3. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT T HE ASSESSEE SOCIETY IS RUNNING A SCHOOL BY NAME PATHIANA PUBLIC SCHOOL AT ROHTAK AND IS REGIST ERED UNDER SECTION 12-AA OF THE I. T. ACT. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE D ID NOT APPLY 85 PER CENT OF INCOME FOR THE OBJECTS. ON BEING QUERIED THE ASSESSEE FILED FORM 10 EVIDENCING ACCUMULATION OF RS.39 28 356/- FOR A PERIOD OF 10 YEARS. THE SOCIETY HAS FURNISHE D COPY OF APPLICATION DATED 29/12/2009 TO THE LD. COMMISSIONER OF INCOME-TAX ROHTAK FOR CONDONA TION OF DELAY IN FILING THE SAME ALONG WITH THE RETURN OF INCOME. THE ASSESSING OFFICER IN VI EW OF PROVISIONS OF RULE 17 OF INCOME TAX RULES 1962 OBSERVED THAT THE ASSESSEE WAS REQUIRED TO FILE FORM NO. 10 WITHIN THE TIME ALLOWED UNDER SECTION 139(1) I.E. BY DUE DATE OF FILING RET URN OF INCOME BY THE SOCIETY. SINCE THE ASSESSEE HAD NOT FURNISHED FORM NO. 10 ALONG WITH THE RETURN THE ASSESSEE WAS NOT ELIGIBLE FOR EXEMPTION IN RESPECT OF AMOUNT FELL SHORT OF 85 PER CENT OF T HE INCOME. WHILE REJECTING THE CLAI OF THE ASSESSEE THE AO ALSO NOTED THAT CIRCULAR NO. 273 DA TED 3/06/1980 EMPOWERED THE LD. CIT TO CONDONE THE DELAY SUBJECT TO FULFILLING OF CERTAIN SPECIFIED CONDITIONS. SINCE THE LD. CIT ROHTAK HAD NOT DISPOSED OF THE APPLICATION FILED BY THE AS SESSEE FOR CONDONATION OF DELAY IN FILING FORM NO. 10 WITHIN THE DUE DATE OF FILING OF RETURN AND SINCE THE ASSESSMENT WAS GETTING BARRED BY LIMITATION THE AO REJECTED THE CLAIM OF THE ASSESS EE AND ADDED THE AMOUNT OF RS.10 99 610/- BEING THE AMOUNT WHICH FELL SHORT OF 85 PER CENT OF INCOME FOR THE YEAR UNDER CONSIDERATION. 4. ON APPEAL IT WAS SUBMITTED THAT THE ASSESSEE HAD FILED APPLICATION FOR CONDONATION OF DELAY BEFORE THE LD. CIT (APPEALS). IT WAS ALSO SU BMITTED THAT DEPRECIATION OF RS.18 90 000/- SHOULD BE ALLOWED. THE LD. AR OF THE ASSESSEE ALSO SUBMITTED THAT THE SOCIETY HAS DEPOSITED RS.29 58 939/- WITH VIJAYA BANK ROHTAK BEFORE DUE DATE OF FILING OF RETURN THEREFORE THERE WAS NO DEFAULT UNDER SECTION 11(1)(A) OF THE ACT. HOWE VER THE LD. CIT (APPEALS) REJECTED THE CONTENTION OF DEPRECIATION ON THE GROUND THAT NO SU CH ISSUE WAS TAKEN BEFORE THE LD. CIT (A). THEREFORE THE GROUND RELATING TO DEPRECIATION WAS NOT TENABLE. THE LD. CIT UPHELD THE ADDITION ON THE GROUND THAT THE ARGUMENT OF DEPOSIT IN THE B ANK ACCOUNT HAS NO RELEVANCE FOR APPLICATION OF PROVISIONS OF SECTION 11. 3 I. T. APPEAL NO. 2334 (DEL) OF 2011 5. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS FILED APPLICATION BEFORE THE LD. CIT ROHTAK FOR CONDONATION OF DELAY IN FILING FORM NO. 10 FOR ACCUMULATION OF INCOME WHICH FELL SHORT OF 85 PER CENT OF THE AMOU NT. HE FURTHER SUBMITTED THAT UNDER SECTION 11(2) THERE IS NO TIME-LIMIT PRESCRIBED FOR FILING OF FORM NO. 10. HOWEVER RULE 17 PRESCRIBES THE TIME-LIMIT FOR FILING OF FORM NO. 10 BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. THE LD. AR OF THE ASSESSEE SUBMITTED THAT HONBLE SUPRE ME COURT IN THE CASE OF CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION 247 ITR 201 (SC) HELD THAT IF FORM NO. 10 IS FILED BEFORE THE ASSESSING OFFICER ANYTIME BEFORE THE ASSESSMENT PRO CEEDINGS ARE CONCLUDED THE ASSESSEE WILL BE ELIGIBLE FOR BENEFIT OF SECTION 11. ON THE OTHER H AND THE LD. SR. DR SUPPORTED THE ORDER OF THE LD. CITA(A) ROHTAK. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE HAD FILED FORM NO. 10 BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS ALSO A FACT THAT THE ASSESSEE HAS FILED APPLICATION BEFORE THE LD. CIT FOR CONDONATION OF DELAY IN FILING FORM NO. 10 FOR SETTING APART THE INCOME. IT IS ALSO A FACT THAT THE LD. CIT ROHTAK HAS NOT DISPOSED OF THE CONDONA TION APPLICATION SO FAR. UNDER SECTION 11(2) OF THE ACT IN A CASE WHERE 85 PER CENT OF INCOME IS NOT APPLIED OR IS NOT DEEMED TO HAVE BEEN APPLIED TO THE CHARITABLE OR RELIGIOUS PURPOSES IN INDIA DURING THE PREVIOUS YEAR AND IS ACCUMULATED OR SET APART EITHER IN WHOLE OR IN PART FOR APPLICATION TO SUCH PURPOSES IN INDIA SUCH INCOME SO ACCUMULATED OR SET APART SHALL NOT BE INC LUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME PROVIDED SU CH PERSON SPECIFIES BY NOTICE IN WRITING TO THE AO IN THE PRESCRIBED MANNER THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND THE PERIOD FOR WHICH THE INCOME IS TO BE ACCUMU LATED OR SET APART WHICH SHALL NOT IN NO CASE EXCEED FIVE YEARS. SECONDLY THE MONEY SO ACCUMULA TED OR SET APART IS INVESTED OR DEPOSITED IN THE FORMS OR MODES SPECIFIED IN SUB SECTION (5). S UB SECTION (5) OF SECTION 11 SPECIFIES THE MODES OF INVESTMENTS. AS PER CLAUSE (III) OF SECTI ON 11(5) ANY DEPOSIT IN A SCHEDULE BANK OR A CO- OPERATIVE SOCIETY ENGAGED IN CARRYING ON BUSINESS O F BANKING (INCLUDING A COOPERATIVE MORTGAGE BANK OR A CO-OPERATIVE LAND DEVELOPMENT BANK) SHALL BE IN SPECIFIED MODES FOR THE PURPOSES OF SECTION 11(2) OF THE ACT. 4 I. T. APPEAL NO. 2334 (DEL) OF 2011 7. HONBLE SUPREME COURT IN THE CASE OF CIT VS. NAG PUR HOTEL OWNERS ASSOCIATION (SUPRA) HAS HELD THAT THE INTIMATION REQUIRED UNDER SECTION 11 REGARDING ACCUMULATION OF INCOME OR SETTING APART OF THE INCOME HAS TO BE FURNISHED BEF ORE THE ASSESSING AUTHORITY BEFORE HE COMPLETES THE CONCERNED ASSESSMENT BECAUSE SUCH REQUIREMENT I S MANDATORY AND WITHOUT THE PARTICULARS OF THIS INCOME THE ASSESSING AUTHORITY CANNOT ENTERTAI N THE CLAIM OF THE ASSESSEE UNDER SECTION 11 OF THE ACT. THEREFORE COMPLIANCE WITH THE REQUIREMEN T OF THE ACT WILL BE MET IF THE SAID INFORMATION IS SUBMITTED AT ANY TIME BEFORE THE ASS ESSMENT PROCEEDINGS ARE COMPLETED. SINCE THE ASSESSEE HAD FURNISHED FORM NO. 10 BEFORE COMPLETIO N OF ASSESSMENT BEFORE ASSESSING OFFICER AND HAS DEPOSITED THE MONEY IN VIJAYA BANK BOTH THE CO NDITIONS I.E. FILING OF FORM NO. 10 AND DEPOSITING THE MONEY IN SPECIFIED MODES HAVE BEEN S ATISFIED. THE ASSESSEE HAD ALSO FILED APPLICATION BEFORE THE LD. CIT FOR CONDONATION OF D ELAY WHICH IS PENDING. UNDER THESE CIRCUMSTANCES IN OUR CONSIDERED OPINION THE ASSES SEE IS ELIGIBLE FOR EXEMPTION OF INCOME UNDER SECTION 11 OF THE ACT. 8. THE ASSESSEE HAD TAKEN GROUNDS IN RELATION TO DE PRECIATION AND CHARGING OF TAX AT MAXIMUM MARGIN RATE UNDER SECTION 164(2) OF THE ACT . IT IS A FACT THAT THESE TWO GROUNDS DO NOT ARISE FROM THE ORDER OF THE LD. CIT (A) AS NONE OF THE GROUND WAS TAKEN BEFORE THE LD. CIT (A). HOWEVER SINCE DURING THE COURSE OF HEARING THE LD. AR OF THE ASSESSEE DID NOT PRESS THESE GROUNDS OF APPEAL WE DISMISS THESE GROUNDS RAISED B Y THE ASSESSEE. 9. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 15 TH JULY 2011. SD/- SD/- [ RAJPAL YADAV ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH JULY 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 5 I. T. APPEAL NO. 2334 (DEL) OF 2011 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT.