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TMI Blog2019 (11) TMI 1222X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. These two appeals have been filed by the Assessee and one cross appeal has been filed by the Revenue against the order of the ld. CIT(A). Since Assessees and Assessment Years are common, therefore, for the sake of brevity, we would like to dispose of all three appeals by way of a common order. 2. First of all, we would like to deal with ITA No. 611/Ahd/2018. There is a delay of 65 days for filing of appeals on behalf of the assessee in support of its contention, the appellant has filed an affidavit of its staff giving reason for delay for filing of appeals. We are satisfied with the reasons given by the appellant and would like to condone the delay and proceed with the appeal. 3. Appellant has taken solely ground that ld. CIT(A) has erred in giving guidelines to the A.O. for giving allowance of deficit and requested that appeal to be decided on the basis of the ground raised that the direction and guidelines cannot be given in what manner such deficit has to be allowed. 4. 1. During the course of scrutiny proceedings it was noted that assesses has claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be written back as income available. In fact, going by the several decisions of various High Courts, the charitable institutions will be generating unaccounted income equal to the depreciation amount claimed on year to year basis which is nothing but black money. The hon'ble High Court of Kerala in the said order, has referred to decision of various High Courts including the decision of Hon'ble Gujarat High Court-in the case of CIT v/s. Sheth Manilala Ranchoddas Vishram-Bhavan Trust 198 ITR 598 (Guj.j and held that we do not find in any of these decisions this aspect is considered and discussed by any of the High Court. 4.4 There is a long debate and legal battle at different judicial platform and the issue has not attended finality till recent time. Reliance in this regard is strongly placed on a recent decision of Supreme Court of India in SLP No. 17251 of 2015 in the case of director of income-tax (exemptions), Mumbai vs. Shri Vile Parle Kelavni Mandal (2015) 63 taxmann.com 326 (SC) wherein, hon'ble Supreme Court granted special leave petition filed against judgment of High Court of Bombay in the above case wherein it was held by High Court of Bomba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income shall precede accumulation. Based on the above referred guideline A.O. is hereby directed to allow the set off of deficit of earlier year to be adjusted against income of current year. 6. Against the order of the ld. CIT(A), assessee preferred appeal before us stating that ld. CIT(A) cannot direct the A.O. that how deficit is to be allowed. And in support of its contention, ld. A.R. cited a judgment of Hon ble Supreme Court in the matter of CIT vs. Programme For Comminity Organisation wherein in similar circumstances, appeal of the Revenue was dismissed and the relief was granted to the assessee: The question that really requires consideration is whether, for the purposes of section 11(l)(a) of the Income-tax Act, 1961, the amount for the grant of exemption of twenty-five per cent, should be the income of the trust or it should be its total income as determined for the purposes of assessment to income-tax. This question has to be answered in the light of these facts : The assessee-trust received donations in the aggregate sum of ₹ 2,57,376. It applied thereout for its charitable purposes the aggregate sum of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein it is held: The question that really requires consideration is whether, for the purposes of section 11(l)(a) of the Income-tax Act, 1961, the amount for the grant of exemption of twenty-five per cent, should be the income of the trust or it should be its total income as determined for the purposes of assessment to income-tax. This question has to be answered in the light of these facts: The assessee-trust received donations in the aggregate sum of ₹ 2,57,376. It applied thereout for its charitable purposes the aggregate sum of ₹ 1,70,369 leaving a balance of ₹ 87,010. The question is whether the assessee is entitled to accumulate twenty-five per cent, of ₹ 2,57,376 as it contends, or twenty-five per cent, of Rs, 87,010, as the Revenue appeared to contend. Section 11(l)(a) reads thus : 11. (l)(a) Income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India ; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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