Income Tax Appellate Tribunal - Chandigarh
Maharaja Ranjit Singh War Museum ... vs Ito, Ludhiana on 11 January, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
'SMC' BENCH, CHANDIGARH
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
ITA No. 964/CHD/2016
Assessment Year: 2010-11
Maharaja Ranjit Singh Vs The ITO,
War Museum Society, Ward-II(4),
Village - Bhattian Bhet, Ludhiana.
G.T.Road, Ludhiana.
PAN: AAATM5624L
(Appellant) (Respondent)
Appellant by : Shri Brij Bhushan Sharma
Respondent by : Shri S.K.Mittal, DR
Date of Hearing : 03.01.2017
Date of Pronouncement : 11.01.2017
O R D E R
This appeal by assessee has been directed against the order of ld. CIT(Appeals)-4 Ludhiana dated 01.06.2016 for assessment year 2010-11 on the following ground :
"That the ld. CIT(A) has erred in law and on the facts of the case by upholding the order of ld. A.O. & disallowing the deduction claimed under section 11 to the extent of Rs. 20,86,406/- for non filing of Form No. 10 under section 11(2) i.e. intimation to A.O. for accumulation of funds of more than 15% of total receipts".2
2. Brief facts of the case are that assessee filed return of income declaring 'nil' income. The assessee has earned income from bank interest and sales of tickets during the period under consideration. During the course of assessment proceedings, the Assessing Officer observed from the perusal of the Income & Expenditure Statement that assessee trust neither applied 85% of the income for charitable purposes nor accumul ated or set apart applicati on towards charitable and religious purposes as requi red under section 11 and 12 of the Income Tax Act. Form No. 10 was also not filed as required under section 11(2) of the Income Tax Act. The show cause notice was issued to the assessee that since Form No. 10 as required under section 11(2) has not been filed, why the entire income of Rs. 28,32,395/- may not be taxed. The assessee submitted that out of the total receipts of Rs. 49,73,260/-, a sum of Rs. 21,40,865/- had been applied for charitable purposes and balance amount had been accumulated and set apart for application towards charitable and religious purposes in India as required under section 11 and 12 of the Income Tax Act. Further, the assessee had invested all its accumulated resources in FDRs and SB account with HDFC Bank Ltd. The assessee submitted that Form No. 10 could not be filed due to unavoidable circumstances. Same may be condoned. The assessee relied upon Board Circular dated 03.06.1980 in this regard. The Assessing Officer, however, was not satisfied 3 with the reply of the assessee because no Form No. 10 was filed in prescribed form, therefore, income of Rs. 20,86,406/- was taxed treating the assessee trust as AOP. The ld. CIT(Appeals) on the same reasoning, confirmed the addition.
3. I have heard ld. Representatives of both the parties. The reply of the assessee dated 26.12.2012 filed before Assessing Officer is filed in the Paper Book in which assessee has explained that sum of Rs. 21,40,865/- have been applied for charitable purpose and balance amount has been accumulated and set apart for application towards charitable and religious purposes. The assessee also pleaded that delay in filing form No. 10 may be condoned. Hon'ble Allahabad High Court in the case of CIT Vs Moti Ram Gopi Chand Charitable Trust 360 ITR 598 held as under :
"Held, dismissing the appeal, that the benefit of the exemption was on setting apart of the 85 per cent, amount to be spent in the next year before the assessment was completed and not on the furnishing of information on the prescribed form. There was sufficient material before the Assessing Officer both in the shape of the information furnished within the prescribed period and the proof of not only setting apart 85 per cent, of the amount to be spent in the next year but also the expenditure of that amount in the next year. The insistence on furnishing of information in Form 10 as a condition precedent, was insistence on the form and not the substance of the provisions of the Act".4
4. The ld. counsel for the assessee also submitted that in assessment year 2012-13, the ld. CIT(Appeals)-4 Ludhiana vide order dated 24.08.2016 on the same matter has allowed the claim of the assessee, copy of the order is placed on record.
5. Considering the above facts, it is clear that sufficient material was filed before Assessing Officer at the assessment stage to explain that balance amount has been accumulated and set apart for application towards charitable and religious purposes as required under section 11 and 12 of the Act. In assessment year 2012- 13, the assessee filed Form No. 10 with revised form later on. Therefore, whether the material before Assessing Officer was sufficient as required on filing Form No. 10 and whether assessee is entitled for condonation of delay shall have to be considered by the authorities below, in the light of the decision of Hon'ble Allahabad High Court in the case of CIT Vs Moti Ram Gopi Chand Charitable Trust (supra). In this view of the matter, I set aside the orders of authorities below and restore the matter in issue to the file of Assessing Officer with direction to re-decide this issue in accordance with law in the light of decision of Hon'ble Allahabad High Court in the case of CIT Vs Moti Ram Gopi Chand Charitable Trust (supra) and order of the ld. CIT(Appeals) in the case of the assessee for assessment year 2012-13. 5 The Assessing Officer shall give reasonable sufficient opportunity of being heard to the assessee.
6. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court.
Sd/-
(BHAVNESH SAINI) JUDICIAL MEMBER Dated : 11 t h January,2017.
'Poonam' Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A)
4. The CIT,DR Assistant Registrar, I TAT Chandigarh