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2020 (7) TMI 195 - AT - Income TaxAssessment of trust - Carry forward of b/f losses - whether there is no provision in the statute to carry forward loss/excess application to subsequent years in case of charitable trusts being assessed under section 11 12? - CIT(A) set aside the action of the Assessing Officer and allowed the plea of the assessee for setting-off of carried forward amount of deficit of earlier years in order to compute the assessable income for the year under consideration - HELD THAT - It was a common ground between the parties that the legal position laid down in the case of Raghuvanshi Charitable Trust 2010 (7) TMI 158 - DELHI HIGH COURT continues to hold the field. In fact, the learned counsel for the assessee brought to the notice of the Bench that Hon'ble Supreme Court in the case of CIT(E) Vs. Subros Educational Society 2018 (4) TMI 1622 - SC ORDER has impliedly affirmed the position of law enumerated by the Hon ble High Court of Delhi while considering a similar question raised by the Revenue before it, as the Hon'ble Supreme Court did not find any merit in the same. - Decided against revenue.
Issues:
1. Allowance of carry forward of b/f losses for charitable trusts assessed under section 11 & 12 of the IT Act. Analysis: The appeal before the ITAT Delhi concerned the assessment year 2013-14, where the Revenue challenged the order of the CIT(A) dated 10th July, 2017. The core issue revolved around whether the CIT(A) erred in allowing the carry forward of brought forward losses for a trust registered under Section 12A of the Income-tax Act, 1961. The Assessing Officer disallowed the adjustment of the deficit carried forward from earlier years, resulting in the assessment of total income at ?7,87,85,919 for the current year. The assessee contended that the Assessing Officer's action was contrary to legal precedents, including the decision of the Hon’ble Jurisdictional High Court of Delhi in the case of DIT Vs. Raghuvanshi Charitable Trust & Others. In the appeal before the CIT(A), the assessee relied on various judgments supporting the allowance of the adjustment of deficit carried forward, such as CIT Vs. Institute of Banking Personnel Selection, CIT Vs. Shri Plot Swetamber Murti Pujak Jain Mandal, CIT Vs. Matriseva Trust, and CIT Vs. Maharana of Mewar Charitable Foundation. The CIT(A) considered these precedents, especially the judgment of the Hon’ble High Court of Delhi in the case of Raghuvanshi Charitable Trust, and allowed the plea of the assessee to set off the carried forward deficit from earlier years to compute the assessable income for the year under consideration. During the ITAT proceedings, both parties acknowledged the legal position established by the Hon’ble High Court of Delhi in the case of Raghuvanshi Charitable Trust. The counsel for the assessee highlighted that the Hon’ble Supreme Court, in the case of CIT(E) Vs. Subros Educational Society, had implicitly upheld the legal position set by the High Court of Delhi. Consequently, the ITAT affirmed the CIT(A)'s decision and dismissed the Revenue's appeal, thereby allowing the carry forward of brought forward losses for the charitable trust assessed under sections 11 & 12 of the IT Act. The appeal of the Revenue was ultimately dismissed by the ITAT Delhi.
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