INDIAN ROAD CONGRESS,NEW DELHI vs. ADIT (E), NEW DELHI

Learned A.R., at the outset, submitted that the case of the assessee was reopened u/s 147 of the Act for the reason that the assessee had not filed Form-10 along with the return of income whereas the fact remains that Form-10 was filed along with the return of income and in this respect our attention was invited to page 20 of the paper book where a copy of income tax return showing enclosures was placed wherein Item No. 1 was stated to be enclosed was Notice u/s 10. Learned A.R. further took us to page No. 4 of the paper book where in the enclosures attached with the income tax return, there was mention of Form-10 for exercising options under section 11(2). Learned A.R. therefore, in view of these facts, submitted that the reopening u/s 147 was not justified as during original assessment proceedings the assessment was passed u/s 143(3) of the Act and our attention was invited to assessment order dated 26/08/2010, placed at pages 1 & 2 of the paper book.

Learned D.R., on the other hand, submitted that it is not correct on the part of the assessee to claim that the assessee had filed Form-10 while filing the return of income and in this respect the original assessment record was also produced. Learned D.R. submitted that though the copy of resolution was there on the record but Form-10 was not on record and during remand proceedings also the Assessing Officer had held that there was no Form-10 available on the record. Therefore, it was argued that Assessing Officer has rightly reopened the assessment and therefore, ground No. 1 taken by the assessee needs to be dismissed. Reliance in this respect was placed on an order of Hon'ble Supreme Court in the case of CIT vs. P.V.S. Beedies (P) Ltd. [1999] 103 Taxman 294 where the Hon'ble Court has held that reopening of case u/s 147(b) on the basis of factual information given by internal audit party was valid in law. Reliance was further placed on an order of Hon'ble Delhi High Court in the case of Indu Lata Rangwala vs. DCIT [2017] 80 Taxmann.com 102 (Delhi) for the proposition that it is not necessary for Assessing Officer to come across some fresh tangible material to form ‘reasons to believe’ that income has escaped assessment.

Learned A.R., in his rejoinder, submitted that if the case is set aside to the Assessing Officer for reconsideration of its additional evidence, which is in the form of corrected Form-10 and resolution then he will not press ground No. 1 on legal issue. The opinion of Learned D.R. for setting aside the matter was sought who though objected to the proposal but stated that if the case is remitted back to the Assessing Officer, the Assessing Officer should be directed to examine the contents of Form-10 wherein the amount proposed to be accumulated already exceeds 15% as the amount represents 28% of the profits.

We have heard the rival parties and have gone through the material placed on record. We find that original assessment was completed u/s 143(3) of the Act vide order dated 26/08/2010, a copy of which is placed at pages 1 & 2 of the paper book. In the original assessment proceedings the Assessing Officer did not raise any objection regarding not filing of Form- 10. The evidence in the form of copy of return of income and enclosures, as pointed out by Learned A.R. also, demonstrate the fact of having filed Form-10 along with the original return of income. Such evidences are in the form of copy of income tax return and list of enclosures placed at pages 1 to 20 of the paper book. However, the case of the assessee was reopened by recording the reasons that Form-10 was not filed by the assessee. The Learned CIT(A), after obtaining remand report from Assessing Officer, upheld the findings of the Assessing Officer that Form-10 was not on the record. The records demonstrated by Learned A.R. clearly shows that original Form-10 was filed by the assessee but the record of the Assessing Officer shows that Form-10 was not filed along with the return of income. Therefore, in view of these facts and circumstances, we hold that benefit of doubt has to be given to assessee. We further find that Form-10 submitted during assessment proceedings was also rejected by the authorities below as they observed certain mistakes and therefore, Learned A.R. has filed an amended and corrected copy of Form-10 and copy of resolution. The ~ 5 ~ benefit has been denied to the assessee on the basis of technical defects in the form but keeping in view the fact that assessee had in its possession evidence of having filed Form-10 aloongwith return of income in original assessment proceedings, we find it appropriate to remit the issue back to the file of the Assessing Officer with a direction to examine the corrected Form-10 filed before us along with the corrected copy of resolution as the mistake pointed out by the Assessing Officer during reassessment proceedings also were of technical nature which cannot be made a basis for disallowing the claim of the assessee as admittedly the assessee is a charitable organization registered u/s 12AA of the Act. In view of the above, legal ground taken as ground No. 1 is dismissed as not pressed and ground No. 2 is allowed for statistical purposes.

In the result, the appeal of the assessee is partly allowed for statistical purposes.