9911796707
TMI Blog2014 (3) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income which was taken in scrutiny. During the course of assessment proceedings, the Assessing Officer noticed that a sum of Rs. 59.17 lakhs [rounded off] which was the income of the assessee was not spent by the Trust. After putting the assessee to notice, he added such amount to the income of the assessee. The assessee approached the CIT [A] and contended that the assessee always desired to exercise option available under clause (2) of Explanation to Section 11 (1), for which purpose, a communication was also addressed on 22nd September 2009. However, on being pointed out that there was an error in the figure indicated and such figure, in subsequent letter dated 13th February 2011 was written, correcting the figure from Rs. 59,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us year, the income applied to charitable or religious purposes in India falls short of (85) per cent of the income derived during that year from property held under trust, or as the case may be, held under trust in part, by any amount ( i) for the reason that the while or any part of the income has not been received during that year, or (ii) for any other reason, then, in the case referred to in subclause (ii), so much of the income applied to such purposes in India during the previous year immediately following the previous year in which the income was derived as does not exceed the said amount may, at the option of the person in receipt of the income (such option to be exercised in writing before the expiry of the time allowed under subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (4) of Section 139 of the Act and the option contemplated by the Explanation to Section 11 (1) is exercised in writing alongwith such return, the requirements of the Explanation to Section 11 (1) would stand satisfied. In the instant case, the contention of the assessee is that it has exercised option and while exercising the option, the amount written of Rs. 59,17,600/- was wrongly mentioned. However, the same ought to have been Rs. 1,05,67,047/-. We find that ld. CIT (A) has agreed with the assessee to the extent that the A.O has decided this issue on a wrong basis. However, learned CIT (A) did not allow to correct the mistake on the basis that the extended time limit available till the finalization of assessment proceedings as has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is hereby rejected." We notice that under Section 11 of the Act, a charitable trust unable to utilize its income derived from property held under trust wholly for charitable or religious purposes to the extent of 85% would have an option either in terms of clause (2) of Explanation to subsection (1) thereof, or as provided under subsection (2). When such an option is covered under subsection (2) ie., the income is sought to be accumulated or set apart for the period prescribed, that the requirement of making a declaration in the prescribed manner arises. In case of an option under clause (2) of Explanation to subsection (1), there is no such requirement of making declaration but the requirement is exercising of such option in writing bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11 (2) of the Act. It is true that in such option exercised on 22nd September 2009, the assessee indicated a smaller figure of Rs. 57,17,600/- and it was only later that the same was corrected to Rs. 1,05,67,047/-. However, the Tribunal has taken note of facts on record namely that the option in fact was exercised within the time permitted under the statute. It was a bona fide error to indicate a wrong figure. The intention to avail carry over of the unspend income to the next year was clear. We notice that in case of Trustees of Tulsidas Gopalji Charitable And Chaleshwar Temple Trust v. Commissioner of Income Tax, reported in 207 ITR 368, the Bombay High Court and in case of Commissioner of IncomeTax v. Ziarat Mir Syed Ali Hamdani, re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
