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TMI Blog2015 (9) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... he above the learned CIT(Appeals)-VI, Baroda has erred in not appreciating the fact that it was impossibility of the situation that the trust could not have spent the money accumulated in A.Y. 2003-04 and complied with the provisions of Income Tax Act. It is submitted that the acts and deeds of the trust, resolutions passed and the orders passed by the state government/District collector clearly show that it was just not possible for the trust to spend the amount of Rs. 1,35,70,420/- accumulated. It is submitted that in view of this, the trust should be allowed to spend the money, as per the resolution, as and when the orders, which are challenged in the courts are cancelled and the trust in a position to buy the land and spend the amount as per the resolutions. It is submitted that it be held so now. 3. Without prejudice to the above it is submitted that the trust be allowed to spend the amount accumulated as soon as it is legally possible for it to spend the same. It is submitted that direction be given accordingly. Alternatively, the trust be allowed to spend the money for other objects of the rust notwithstanding the resolution passed and the trust be allowed to do variation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld.ACIT ought to have appreciated that the provisions of section 11(2) of the Act read with the second proviso thereto below were applicable to the case of the appellant-trust and therefore the appellant-trust had not contravened the provisions of sec.11(3)(c) of the Income-tax Act 1961 in any manner whatsoever and nor were the provisions of sec. 11(3A) of the Income-tax Act 1961 applicable to the appellant-trust. The ld.counsel for the assessee submitted that the provisions of section 11(3A) would become operative only when the person who was in receipt of income and who had invested the same as per the provisions of section 11(5) could not apply the same for the purpose for which it was accumulated or set apart, required permission to apply such income for such other charitable or religious purpose in India. Section 11(3A) starts with the non-obstante clause restricted to the provisions of section 11(3). The period referred to in clause (c) of section 11(3) refers to the period referred to in clause(a) of section 11(2). The proviso below section 11(2) carves out an exception with respect to the period that needs to be computed as per the provisions of section 11(2)(a) and due t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11(2) which- (c) is not utilized for the purpose for which it is so accumulation or set apart, during the period referred to in a clause (a) of that sub-section or in the year immediately following the expiry thereof- Shall be deemed to be the income of such person of the previous year in which it is so applied or ceases to be so accumulated or set apart." The facts as brought out in A.Y. 2010-11 and as mentioned above are applicable to the case of the assessee for A.Y. 2009-10 and the point pertinent to note that the AR agreed vide order sheet entry dated 26.12.2012 that he does not have any objection about the addition made on the same ground during assessment proceeding for A.Y. 2010-11. Accordingly I have reason to believe that the assessee has failed to disclose truly and fairly all the facts relevant to its assessment for A.Y. 2009-10. Thus, I have, therefore reason to believe that income exceeding Rs.One lacs chargeable to tax has been escaped the assessment for 2009-10 within the meaning of Section 147 of the Income Tax Act. Therefore, it is a fit case to issue notice u/s.148 for A.Y. 2009-10." 4.1. The AO in the assessment order followed the order of the ld.CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, shall not be treated as application of income for charitable or religious purposes, either during the period of accumulation or thereafter.] Section 11 [(3) Any income referred to in sub-section (2) which- (a) is applied to purposes other than charitable or religious purposes as aforesaid or ceases to be accumulated or set apart for application thereto, or [(b) ceases to remain invested or deposited in any of the forms or modes specified in sub-section (5), or] (c) is not utilised for the purpose for which it is so accumulated or set apart during the period referred to in clause (a) of that sub-section or in the year immediately following the expiry thereof, [(d) is credited or paid to any trust or institution registered under section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10,] shall be deemed to be the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Charity Commissioner, Nadiad and shall also produce a copy thereof to this Court. He shall take all steps to realize the dues of the trust. He will be entitled to a monthly remuneration of Rs. 1,500/- (Rupees one thousand five hundred only) tentatively from the date of issue of Receiver Patra in addition to reasonable expenses incurred by him for the management of the trust. He shall commence the work of Receiver forthwith. 5. Shri M.M.Parmar, C.O.C., District Court Panchmahals, at Godhra is also appointed as Co-Receiver to assist Shri N.B.Patel, the Receiver, appointed above. He shall also be entitled to a monthly remuneration of Rs. 750/- tentatively in addition to reasonable expenses incurred by him for management of the trust properties. 6. The remuneration of the Receiver and his assistant are to be drawn from the trust property income. 7. All the defts are directed to hand over the possession of the trust, if any, with them including moveable and immoveable properties of the trust. 8. The defendants, their agents, office bearers and servants are hereby restrained from managing the properties and affairs of the public trust known as Kalika Mataji Temple, at Pavagad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n force till 30/08/2007. The ld.CIT(A) did not accept the explanation of the assessee on the ground that there was no prohibition or restraining order by the Court that the Receiver would not comply with the provisions of the Act. So far as the assessee-trust is concerned, its affairs were taken over by the Court appointed Receiver, therefore it cannot be inferred that the assessee-trust was in anyway responsible for not making an application for accumulation of income u/s.11(1) of the Act. The contention of the assessee is that the delay in making application by the assessee-trust was due to sufficient cause and the authorities below ought to have condoned the delay and excluded the period during which the affairs of the trust was taken over by the Court Receiver trust. However, no such situation is contemplated under the Act where the affairs of the trust are taken over by the Court appointed Receiver and compliance of the provision by the Receiver. Sub-section(3A) of section 11 contemplates a situation where due to circumstances beyond the control of the person in receipt of the income, any income invested or deposited in accordance with the provisions of clause(b) of sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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