# M/s Maa Bhagwati Shiksha Samiti v. Commissioner of Income- Tax, Lko. & Ors

- **Citation:** (2023) 12 ILRA 325
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-12-06
- **Case number:** Writ Tax No. 476 of 2022
- **Bench:** Siddhartha Varma, Shekhar B. Saraf
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-maa-bhagwati-shiksha-samiti-v-commissioner-of-income-tax-lko-ors-49570
- **Pages:** 9

## Headnote

Income Tax Act, 1961 - Sections 11(2),
12A, 139(1), 142(1), 143(2), 143(3), 147,
148 & 151 - Income Tax Rules, 1962 -
Rule 17 - Legal Issue: Whether Form-10
under Rule 17 filed during the course of
assessment proceedings but belatedly
affects the availability of exemption under
Section 11(2). Held : Form-10 under Rule
17 of the Rules is required to be filed
before the Assessing Officer before he
completes the assessment. In a case,
where Form-10 is filed late but is filed
before the Assessing Officer completes the
assessment, benefit of Section 11(2) of
the Act shall be available to the assessee.
Facts: Petitioner a charitable society
registered
under
the
Societies
Registration Act, 1860, and also registered
under Section 12A of the Income Tax Act
to claim tax exemptions for charitable
purposes. For Assessment Year 2013-14,
the society filed its income tax return on
31.03.2014 showing nil taxable income
after claiming exemptions under Section
11 of the Income Tax Act. Society's
income for the year was Rs. 8.8 crore, out
of which 85% (Rs. 7.93 crore) was applied
toward charitable purposes. Since the
society could not apply the full 85% in
that year, it filed Form-10 to accumulate
the surplus (Rs. 1.58 crore) for future use.
Income Tax Department issued a notice
u/s 148 to reopen the assessment,
claiming that the Form-10 was filed late,
i.e., after the due date under Section
139(1). Reassessment order claimed the
society had "escaped income" of Rs. 1.58
crore and demanded tax of Rs. 1.03 crore.
Petitioner
argued
that
Form-10
was
submitted
during
the
assessment
proceedings, so the delay was condonable.
- Court Quashed the notice dated
31.03.2021 issued u/s 148, order dated
03.03.2022
rejecting
objections,
and
assessment order dated 19.03.2022; writ
petition allowed (paras 17, 19, 20)

Allowed. (E-5)
326 INDIAN LAW REPORTS ALLAHABAD SERIES

## Text

12 All. M/s Maa Bhagwati Shiksha Samiti Vs. Commissioner of Income-Tax, Lko. & Ors.
325
Division-I, Gautam Budh Nagar, Greater
NOIDA, Uttar Pradesh, to that effect, to
overrule the dictate of the machine and to
make it abide by this declaration made.
Unless that is done, the society of the
inventor of the 'wheel' may be seen
puzzled and carrying the 'wheel' over its
collective head, without any use or
purpose.

42. The above exercise may be
completed as expeditiously as possible,
preferably by 31.03.2024.

43. With the aforesaid observations,
present petition stands allowed. No order
as to costs.

44. Let a copy of this order be
communicated to the Central Board of
Indirect
Taxes
&
Customs
(CBIC)-
respondent No. 4 for issuing necessary
directions, either generally or in the
particular facts of this case to remedy this
and similar situations caused due to
machine errors.
----------
(2023) 12 ILRA 325
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.12.2023

BEFORE

THE HON'BLE SIDDHARTHA VARMA, J.
THE HON'BLE SHEKHAR B. SARAF, J.

Writ Tax No. 476 of 2022

M/s Maa Bhagwati Shiksha Samiti
 ...Petitioner
Versus
Commissioner of Income- Tax, Lko. & Ors.
 ...Respondents

Counsel for the Petitioner:
Sri Ashish Bansal, Sri Ashish Raj Shukla

Counsel for the Respondents:
Sri Gaurav Mahajan, Sri Manu Ghildyal, Sri
Praveen Kumar

Income Tax Act, 1961 - Sections 11(2),
12A, 139(1), 142(1), 143(2), 143(3), 147,
148 & 151 - Income Tax Rules, 1962 -
Rule 17 - Legal Issue: Whether Form-10
under Rule 17 filed during the course of
assessment proceedings but belatedly
affects the availability of exemption under
Section 11(2). Held : Form-10 under Rule
17 of the Rules is required to be filed
before the Assessing Officer before he
completes the assessment. In a case,
where Form-10 is filed late but is filed
before the Assessing Officer completes the
assessment, benefit of Section 11(2) of
the Act shall be available to the assessee.
Facts: Petitioner a charitable society
registered
under
the
Societies
Registration Act, 1860, and also registered
under Section 12A of the Income Tax Act
to claim tax exemptions for charitable
purposes. For Assessment Year 2013-14,
the society filed its income tax return on
31.03.2014 showing nil taxable income
after claiming exemptions under Section
11 of the Income Tax Act. Society's
income for the year was Rs. 8.8 crore, out
of which 85% (Rs. 7.93 crore) was applied
toward charitable purposes. Since the
society could not apply the full 85% in
that year, it filed Form-10 to accumulate
the surplus (Rs. 1.58 crore) for future use.
Income Tax Department issued a notice
u/s 148 to reopen the assessment,
claiming that the Form-10 was filed late,
i.e., after the due date under Section
139(1). Reassessment order claimed the
society had "escaped income" of Rs. 1.58
crore and demanded tax of Rs. 1.03 crore.
Petitioner
argued
that
Form-10
was
submitted
during
the
assessment
proceedings, so the delay was condonable.
- Court Quashed the notice dated
31.03.2021 issued u/s 148, order dated
03.03.2022
rejecting
objections,
and
assessment order dated 19.03.2022; writ
petition allowed (paras 17, 19, 20)

Allowed. (E-5)
326 INDIAN LAW REPORTS ALLAHABAD SERIES
(Delivered by Hon'ble Siddhartha Varma,
J. & Hon'ble Shekhar B. Saraf, J.)

1. Heard learned counsel for the
petitioner and learned Standing Counsel for
the Income Tax Department.

2. The writ petition has been filed
seeking the following reliefs:

a. stay the effect and operation and
implementation
of
the
notice
dated
31.03.2021 relating to assessment year
2013-14 issued by the respondent no. 2
under Section 148 of the Income Tax Act on
the petitioner;

b. stay the effect and operation and
implementation
of
the
notice
dted
13.01.2022 and 03.03.2022 issued under
Section 142(1) of the Income Tax Act and
disposal letter dated 03.03.2022 issued by
respondent no. 3 on the petitioner for
making compliance;

c. restrain the respondent nos. 2 and
3/revenue authorities from continuing the
reassessment
proceedings
over
the
petitioner, else the petitioner will suffer
grave and irreparable loss and injury;

d. grant such other ad-interim exparte relief in terms of prayer (a)(b) and (c)
above.

3. Learned counsel for the petitioner
submitted that the petitioner is a society
created on 14.02.2006 and got itself
registered with the Registrar of Society,
Uttar Pradesh under Societies Registration
Act,
1860
bearing
registration
no.
1398/2005-06 for carrying out charitable
work by imparting education through its
institutions run by it. It had also the
registered under section 12A of the Act on
25.09.2008 by the CIT-1, Kanpur, vide
certificate
of
registration
no.
630/1335/ड़नबंधक/तकनीकी/कानपुर/2474.

4. The petitioner society was
maintaining regular books of account and
other records which were subjected to audit
under section 12-A(b) of the Income Tax
Act, 1961 (hereinafter referred to as 'the
Act'). For the year under consideration,
that is, A.Y. 2013-14 it had filed its return
on 31.03.2014 disclosing nil income after
claiming exemption under section 11 of the
Act. As the overall utilization during the
year fell short by 17.02% (Rs.1,58,56,689/-
) from prescribed limit of 85% it had issued
Form - 10 as per Rule 17 of Income Tax
Rules, 1961 (hereinafter referred to as 'the
Rules') which was filed before the Income
Tax Department on 31.03.2014.

5. Return filed by the petitioner
society was selected for scrutiny and notice
under section 143(2) dated 22.09.2014 was
issued, followed by notices, under section
142(1) of the Act, query letter and order
sheet entries. In response to the notices/
queries raised by the Assessing Officer,
books of account, audited balance sheet,
Form - 10 and further information were
placed on record. After verifying the same,
assessment order dated 20.01.2016 was
passed by Respondent No.2 under section
143(3) of the Act accepting the NIL income
disclosed by the petitioner after taking due
cognizance of Form- 10 filed by the
petitioner by observing as under:

".....................Shri Ashutosh Dixit,
AR attended the assessment proceedings from
time
to
time
and
filed
written
submission/explanation. Books of account,
bills, vouchers, etc. produced were put to test
check and the case was discussed with him."
12 All. M/s Maa Bhagwati Shiksha Samiti Vs. Commissioner of Income-Tax, Lko. & Ors.
327

2. The assessee is a society registered
under societies Act with Registrar of
Society U.P. vide certificate No. 1398/200506 dated 14.02.2006 which was renewed
for a period of 5 years with effect from
14.02.2011. The assessee society was
granted registration u/s 12A of the Act, by
the Ld. Commissioner of Income Tax,
Kanpur vide order dated 25.09.2008.

3. The assessee society is running
educational institutions. The total receipt
during the year has been shown by the
assessee at Rs.8,80,22,040/- against which
application for of fund towards charitable
purposes
is
Rs.7,93,25,060/-
after
submitting Form No.10 which is 85%."

6. Notice dated 31.03.2021 under
section 148, after 4 years from the end of
the relevant assessment year, was issued
upon the petitioner. Reasons recorded for
initiation of 147 proceedings against the
petitioner [which was provided to the
petitioner
alongwith
the
letter
dated
15.02.2022 issued under section 143(2) of
the Act by the Respondent No.3] reads as
under:

Reasons
for
reopening
of
the
assessment in case of M/s Maa Bhagwati
Devi

Shikchhna Sewa Samiti for A.Y.
2013-14 u/s 147 of the Act.

1. Brief details of the assessee

The assessee is a society involved in
running a educational institute(s).

2.
Brief
details
of
information
collected/received by the AO:

Return of income in this case was filed
on 31.03.2014 at total income of Rs. Nil.
Thereafter the case was selected under
scrutiny and assessment was completed on
20.01.2016 at total income at Rs.Nil. From
the records it is noticed that there was
unapplied
surplus
income
of
Rs.1,58,86,689/- for which assessee has
submitted form 10 on 31.03.2014 for
accumulation of aforesaid amount of
surplus income. Under the provision of
section 11(2), assessee had to submit the
form 10 for accumulation of income upto
the date of filing its return provided u/s
139(1) i.e. 30.09.2013 but it was submitted
after due date as provided u/s 139(1) of IT
Act,1961.

3. Analysis of information received:

Since, there was unapplied surplus
income of Rs.1,58,86,689/- for which
assessee has submitted form 10 on
31.03.2014 belatedly for accumulation of
aforesaid amount of surplus income. Under
the provision of section 11(2), assessee had
to submit the form 10 for accumulation of
income upto the date of filing its return
provided u/s 139(1) i.e. 30.09.2013 but it
was submitted after due date i.e. belated
and return was not submitted in due date
i.e. 30.09.2013.

4. Enquiries made by the AO as sequel
to information received:

From the records, it is clear that Form
10 for accumulation of income was filed
belatedly and not within the due date of
filing Return of Income u/s 139(1) of the
Act.

Findings of the AO:

From the records it is noticed that
there was unapplied surplus income of
Rs.1,58,86,689/- for which assessee has
submitted form 10 on 31.03.2014 for
accumulation of aforesaid amount of
surplus income. Under the provision of
section 11(2), assessee had to submit the
form 10 for accumulation of income upto
the date of filing its return provided u/s
139(1) i.e. 30.09.2013 but it was submitted
after due date as prescribed u/s 139(1) of
the Act. Hence, deduction claimed by the
assessee for unapplied surplus income of
328 INDIAN LAW REPORTS ALLAHABAD SERIES
Rs.1,58,86,689/- was not allowable u/s
11(2) and the same was

required to be disallowed and taxed as
per the provisions of I.T. Act, 1961.

5.Basis of forming reason to believe
and details of escapement of income:

From the above discussion, it is clear
that there is an escapement of income to the
tune of Rs. Rs.1,58,86,689/- for A.Y. 201314.

6. Applicability of the provisions of
section 147/151 of the Income Tax Act,

1961 to the facts of the case:

Provisions
of
section
147
are
applicable to facts of this case and the
assessment year under consideration is
deemed to be a case where income
chargeable to tax escaped assessment. In
view of the above, on the basis of
information available on record I have
reason to believe that the income of Rs.
Rs.1,58,86,689/- chargeable to tax has
escaped assessment within the meaning of
section 147 of the IT Act, 1961 on account
of interest income. Therefore, necessary
approval to issue notice u/s 148 is being
obtained separately from Commissioner of
Income Tax (Exemption), Lucknow as per
the provisions of section 151 of the IT Act."

7. The petitioner filed his objection to
the initiation of reassessment proceedings
proceedings on the following grounds:

a) No escapement of income of
Rs.1,58,86,689/- (as alleged) on the basis
of the belated filing of Form - 10, as
several judicial pronouncements have held
that if the same is filed during the course of
assessment proceedings, then the same is to
be accepted;

b) Nothing is contained in section
11(2)(a) of the Act regarding period for
furnishing of Form - 10, the period
provided under Rule 17. This period of
filing on or before due date under section
139(1) which relates to the time period for
furnishing of return, was provided only
with effect from A.Y. 2016-17 by Finance
Act, 2015.

c)
As
per
various
judicial
pronouncements time limit provided under
Rule 17 was directive in nature and not
mandatory.

d) Reason to believe as recorded is
wholly based on the review of Assessment
Order made under section 143(3) of the Act
which has taken cognizance of Form - 10
furnished
by
assessee
belatedly
but
accepted by the Assessing Officer during
the
course
of
regular
assessment
proceedings, therefore, it amounts to review
of assessment order;

e) Reason to believe as recorded is
vitiated by the legal mischief of the change
of opinion. Reliance in this regard was
placed on decisions of CIT Vs. Kelvinator
of India Ltd., reported in (2010) 320 ITR
561 (SC), H. K. Buildcon Ltd. Vs. ITO,
reported in (2011) 339 ITR 535 (Guj.) and
Jagran Prakashan Ltd. Vs. CIT, reported
in (2014) 226 Taxman 36 (Alld.);

f) First proviso to section 147 is
applicable as there is no failure on the part
of the Petitioner Society to disclose truly
and correctly all material facts necessary
for
the
assessment,
therefore,
the
proceedings are barred by limitation.

8. By an order dated March 3, 2022,
the respondent no. 3 rejected the objections
raised by the petitioner primarily on the
ground that Form-10 was not submitted by
the petitioner before the due date of filing
of return under Section 139 (1) of the Act.

9. Subsequently, the respondent no.3,
during the pendency of the writ petition,
passed the assessment order dated March
19, 2022 under Section 147 read with
12 All. M/s Maa Bhagwati Shiksha Samiti Vs. Commissioner of Income-Tax, Lko. & Ors.
329
Section 144(B) of the Act assessing the
income of petitioner as Rs. 1,58,86,689/-
and imposed demand of Rs. 1,03,00,246/-
upon the petitioner with the following
observations:

"In the present case, no explanation is
discernable as to why assessee failed to
comply with this requirement. The assessee
ought to have applied under Form No. 10
for permission to accumulate as provided
in section 11(2). The assessee has pleaded
that as per the law, the delay is being
generally condoned. But one has to provide
the reasons for such a delay and apply for
condonation of delay in a reasonable time
period before due date specified u/s. 139(1)
of the Act. It abundantly clear from the
wordings of sub-section (2) of section 11
that it is mandatory for the person claiming
the benefit of section 11 to intimate to the
A.O particulars required under rule 17 in
Form No. 10 of the Act."

Contentions of the petitioner

10. The contentions of the petitioner is
that the Assessing Officer has acted in haste
and passed a non-speaking order on March 2,
2022 disposing of the objections raised by the
petitioner. The petitioner further submitted
that not only the assessment order dated
March 19, 2022 is completely silent upon the
applicability of the first proviso to Section
147 of the Act, the entire exercise of
reassessment is only a change of opinion on
the issue of availability of exemption under
Section 11 of the Act by the Assessing
Officer, that had been granted by the
Assessing Officer while passing the regular
assessment
order
after
taking
into
consideration Form-10 filed by the petitioner.

11. The petitioner further contended
that umpteen judgments of Supreme Court
and various High Courts have held that
delay in filing Form-10 is condonable and
Rule 17 of the Act is directly and not
mandatory.

Contentions of the respondents

12. Per contra, learned counsel for the
respondents supported the initiation of
reassessment proceedings, the order passed
on March 3, 2022 and the assessment order
passed on March 19, 2022. Learned
counsel submitted that non filing of Form10 within time is fatal in nature and the
petitioner could not have claimed the
exemption under Section 11 of the Act if
such form was not filed within time. He
further submitted that the factual aspect of
late receiving of Form-10 came to the
knowledge of the Assessing Officer on a
later date and accordingly amounts to new
material. He also submitted that this clearly
shows that it is not a mere change of
opinion that has led to the initiation of
reassessment proceedings.

Analysis and Conclusion

13.

Before
entering
into
the
controversy, we would like to put on record
the relevant Section 11(2) of the Act and
Rule 17 of the Rules. The same are
provided below:

"Section 11(1)..........................

(2) Where [eighty-five] per cent of the
income referred to in clause (a) or clause
(b) of sub-section (1) read with the
Explanation to that sub-section is not
applied, or is not deemed to have been
applied, to charitable or religious purposes
in India during the previous year but is
accumulated or set apart, either in whole
or in part, for application to such purposes
in India, such income so accumulated or
330 INDIAN LAW REPORTS ALLAHABAD SERIES
set apart shall not be included in the total
income of the previous year of the person in
receipt of the income, provided the
following conditions are complied with,
namely:-

[(a) such person furnishes a statement
in the prescribed form and in the
prescribed manner to the Assessing Officer,
stating the purpose for which the income is
being accumulated or set apart and the
period for which the income is to be
accumulated or set apart, which shall in no
case exceed five years;

(b) the money so accumulated or set
apart is invested or deposited in the forms
or modes specified in sub-section (5);

(c) the statement referred to in clause
(a) is furnished [at least two months prior
to] the due date specified under sub-section
(1) of Section 139 for furnishing the return
of income for the previous year:

Provided that in computing the period
of five years referred to in clause (a), the
period during which the income could not
be applied for the purpose for which it is so
accumulated or set apart, due to an order
or injunction of any court, shall be
excluded.]

Rule 17 (1)- The option to be exercised
in accordance with the provisions of the
explanation to sub-section (1) of section 11
of the Act in respect of income of any
previous year relevant to the assessment
year beginning on or after the 1st day of
April, 2016 shall be in Form No. 9A and
shall be furnished before the expiry of the
time allowed under sub-section (1) of
section 139 of the Act for furnishing the
return of income of the relevant assessment
year."

14. One may rely upon the judgment
of this Court in CIT Vs. Moti Ram Gopi
Chand Charitable Trust, reported in
(2014)
360
ITR
598
(Alld.),
that
specifically dealt with the issue at hand.
The relevant paragraphs are provided
below:

"8.
In
Nagpur
Hotel
Owners
Association's case (supra) the Supreme
Court held that the notice of accumulation
must be given to the assessing authority
under section 11 before the assessment is
concluded. It was held that the assessing
authority must have this information at the
time he completes the assessment. In the
absence of any such information it will not
be possible for the assessing authority to
give the assessee the benefit of such
exclusion and once the assessment is so
completed, it would be futile to find fault
with the assessing authority for having
included such income in the assessable
income of the assessee. Therefore, even
assuming that there is no valid limitation
prescribed under the Act and the Rules
even then. It is reasonable to presume that
the intimation required under section 11
has to be furnished before the assessing
authority
completes
the
concerned
assessment. In the present case, the
application under section 11(2) was not
filed with the return. The information,
however, was given during the process of
the assessment, before the assessment was
completed. The assessee had given notice
under section 11(2)(a) of the Act read with
rule 17 of the Rules of 1962 for
accumulation of income to the Additional
Commissioner
of
Income-tax.
The
Assessing
Officer,
however,
did
not
consider the contention of the assessee.

9. We do not find substance in the
contention of Shri Shambhu Chopra that
unless
the
information,
which
was
otherwise provided by the assessee is
furnished in Form 10, the Assessing Officer
could not have taken into consideration
and was entitled to reject it. The benefit of
12 All. M/s Maa Bhagwati Shiksha Samiti Vs. Commissioner of Income-Tax, Lko. & Ors.
331
the exemption is on setting apart of the 85
per cent. Amount to be spent in the next
year before the assessment is complete 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 of furnishing of
information on Form 10 as a condition
precedent, is insistence on the form and not
the substance of the provisions of the Act."

15. One may also refer to the
judgment
of
Supreme
Court
in
Commissioner of Income-tax Vs. Nagpur
Hotel Owners' Association, reported in
(2001) 247 ITR 201 (SC), wherein the
Supreme
Court
has
stated
that
the
particulars required with the Rules 17 of
the Rules and the Form-10 of the Act is
required to be present before Assessing
Officer
at
the
time
of
assessment
proceedings. The relevant paragraph is
provided below:

"6. It is abundantly clear from the
wordings of sub-section (2) of Section 11
that it is mandatory for the person claiming
the benefit of Section 11 to intimate to the
assessing
authority
the
particulars
required, under Rule 17 in Form No.10 of
the
Act.
If
during
the
assessment
proceedings the Assessing Officer does not
have the necessary information, question of
excluding such income from assessment
does not arise at all. As a matter of fact,
this benefit of excluding this particular
part of the income from the net of taxation
arises from Section 11 and is subjected to
the
conditions
specified
therein.
Therefore, it is necessary that the
assessing
authority
must
have
this
information at the time he completes the
assessment. In the absence of any such
information, it will not be possible for the
assessing authority to give the assessee the
benefit of such exclusion and once the
assessment is so completed, in our opinion,
it would be futile to find fault with the
assessing authority for having included
such income in the assessable income of the
assessee. Therefore, even assuming that
there is no valid limitation prescribed
under the Act and the Rules even then, in
our opinion, it is reasonable to presume
that the intimation required under Section
11 has to be furnished before the assessing
authority
completes
the
concerned
assessment because such requirement is
mandatory and without the particulars of
this income the assessing authority cannot
entertain the claim of the assessee under
Section 11 of the Act, therefore, compliance
of the requirement of the Act will have to be
any
time
before
the
assessment
proceedings."

Emphasis Added

16. One may also refer to judgment of
CIT Vs. Sakal Relief Fund, reported in
(2017)
81
taxmann.com
396
(Bombay)/[2017]
248
Taxman
31
(Bombay) wherein their lordships have
observed and held as under:

"12. Today when the matter was
called out, Mr. Tejveer Singh, learned
Counsel for the Revenue does not dispute
the fact that the decision of the Delhi High
Court in Association of Corporation and
Apex Societies of Handlooms (supra) and
of this Court in Trustees of Tulsidas Gopalji
Charitable and Chaleshwar Temple Trust
(supra) would apply to the present facts.
Therefore, Revenue accepts that even if the
Form 10 is filed during the re-assessment
332 INDIAN LAW REPORTS ALLAHABAD SERIES
proceedings, the benefit of accumulation
under Section 11(2) of the Act is available.
So also, the time allowed in Rule 17 of the
Rules for furnishing the form before the
expiry of time to file the return of income
under Section 139(1) of the Act get
extended to include the time within which a
return of income could be filed under
Section 139(4) of the Act. Therefore, filing
of
Form
10
during
re-
assessment
proceedings is filing of the same within the
time allowed for furnishing the return of
income under Section 139(4) of the Act.
Therefore, the Counsel for the Revenue has
not been able to point out any reasons why
the aforesaid two decisions should not be
applied in the facts of the present case to
reject the appeal.

13. It is only with regard to the
decision of the Apex Court in Nagpur Hotel
Owners' Association (supra) that Mr.
Tejveer
Singh
expressed
reservation.
According to him, the observations of the
Apex Court that Form 10 has to be filed
before
completion
of
Assessment
Proceedings were rendered in the context of
fact that it was not filed during the
Assessment Proceedings. Therefore, the
fact
situation
being
different,
the
observations therein cannot be applied to
the present facts. In fact, we note that the
Apex Court in the above case has observed
that for the purposes of excluding an
income of the trust from the net of taxation,
the intimation in Form 10 has to be filed
with the Assessing Officer before he
completes the Assessment. In fact, it is the
context of the above finding of the Apex
Court, that it observed that Form 10 has to
be filed before completion of Assessment
Proceedings. In fact, the Delhi High Court
in the case of Association of Corporation
and Apex Societies of Handlooms (supra)
has also relied upon and so understood the
decisions of the Apex Court in Nagpur
Hotel
Owners'
Association
(supra).
Therefore, we do not find any merit in the
reservations expressed by Mr. Singh,
learned Counsel for the Revenue on the
applicability of the Supreme Court order in
case of Nagpur Hotel Owners' Association
(supra) to the present facts.

14. In the above view, the question as
proposed stands concluded against the
Revenue by the decision of the Apex Court
in Nagpur Hotel Owners' Association
(supra) and the decision of this Court in
Tulsidas
Gopalji
Charitable
and
Chaleshwar Temple Trust (supra) and the
Delhi High Court in case of Association of
Corporation
and
Apex
Societies
of
Handlooms (supra). The Revenue has not
been able to point out as to why the ratio of
the three above decisions should not be
made applicable to the facts of the present
case and the appeal filed by the Revenue
not be entertained.

15. Therefore, the proposed question
as framed, for the above reasons, do not
give rise to any substantial question of law.
Hence, not entertained.

16. Accordingly, Appeal dismissed. No
order as to costs."

17. In the light of above judgments, it
is crystal clear that Form-10 under Rule 17
of the Rules is required to be filed before
the Assessing Officer before he completes
the assessment. In a case, where Form-10 is
filed late but is filed before the Assessing
Officer completes the assessment, benefit
of Section 11(2) of the Act shall be
available to the assessee. From a reading of
impugned notice, the order dated March 3,
2022 and assessment order dated March 19,
2022, it appears that the Assessing Officer
has paid no heed to the ratio laid down in
the judgment of the Supreme Court and
various
High
Courts
including
the
Coordinate
Bench
of
this
Court.
12 All. H/s Halder Entp. Vs. State of U.P. & Ors.
333

18. We, accordingly, have no
hesitation in holding that the entire process
of reassessment that has been initiated by
the Department holds no water and is
without any legal basis whatsoever.

19. In light of the above, we quash the
notice dated 31.03.2021 issued under
Section 148 of the Act, order passed
rejecting the objection of the petitioner
dated March 3, 2022 and the reassessment
order passed by the Assessing Officer on
March 19, 2022.

20. The writ petition is accordingly
allowed.

21. Let a urgent certified copy of this
order, if applied, be provided to the parties.
----------
(2023) 12 ILRA 333
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.12.2023

BEFORE

THE HON'BLE SIDDHARTHA VARMA, J.
THE HON'BLE SHEKHAR B. SARAF, J.

Writ Tax No. 1297 of 2023

H/s Halder Entp. ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Aditya Pandey

Counsel for the Respondents:
Sri Ankur Agarwal

Civil Law - Central Goods and Services Tax
Act,
2017
-
Sections
129(1)(a)
&
129(1)(b) - Circular dated 31.12.2018 -
Petitioner received an order for supply of
dried areca nuts - Goods were loaded with
invoice and E-way bill - Goods iintercepted
in U.P. on 3.10.2023 and detained on
11.10.2023 on the ground that consignor
and consignee were declared non-existent
- On the date of interception, petitioner
was registered under CGST Act, however
registration subsequently suspended on
6.10.2023 - Petitioner applied for release
under Section 129(1)(a) while authorities
determined
penalty
under
Section
129(1)(b) - Issue: Whether the goods
may be released under Section 129(1)(a)
or 129(1)(b) of the CGST Act, 2017 - Held:
Goods with proper tax invoice and E-way
bill belong to petitioner; Circular dated
31.12.2018
applies
and
petitioner
is
deemed owner; goods to be released
under Section 129(1)(a) of the CGST Act
(Para 11)

Allowed. (E-5)

(Delivered by Hon'ble Siddhartha Varma,
J. & Hon'ble Shekhar B. Saraf, J.)

1. The present writ petition, filed
under Article 226 of the Constitution of
India, assails the actions of the respondents
authorities with regard to detention of the
goods and vehicle of the petitioner as well
as subsequent orders passed under Section
129 of the Central Goods and Services Tax
Act, 2017 (hereinafter referred to as the
"CGST Act").

2. At the outset, we may state that the
counsel on behalf of the petitioner has
submitted that he is restricting the prayers
made in the writ petition to the proceeding
initiated under Section 129 of the CGST
Act.

3. The main issue in this writ petition
is whether the goods may be released by
the authorities under Section 129(1)(a) or
129(1)(b) of the CGST Act.

4. The main contention of the learned
counsel for the petitioner is that the