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TMI Blog2022 (1) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... In the facts of the present case, admittedly, the equity shares of Asian Paints Ltd were received by the assessee in the financial year 2014-15. Therefore, as per clause (iia) of proviso to section 13(1)(d) of the Act, the provisions of section 13(1)(d) of the Act would come into play after the expiry of one year from the end of the financial year 2014-15. In other words, the prohibitory conditions of section 13(1)(d) of the Act would be applicable from 01-04-2016, falling in financial year 2016-17 relevant to assessment year 2017-18. Thus, insofar as the impugned assessment year is concerned, there is no breach or violation of the conditions of section 11(5) r.w.s. 13(1)(d) of the Act. That being the case, the assessing officer could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleted under section 143(3) of the Act vide order dated 08-12-2018 determining the total income at ₹ 15,09,615/-. The variation in total income as offered by the assessee and as determined by the assessing officer was due to disallowance of exemption claimed in respect of accumulation of income of ₹ 13 lakh under section 11(2) of the Act. 3. Be that as it may, after completion of the assessment as aforesaid, learned Commissioner of Income Tax (Exemptions), Mumbai, in exercise of powers conferred under section 263 of the Act, called for and examined the assessment records for the impugned assessment year. On examining the assessment records, he noticed that in the financial year 2014-15 assessee had received fully paid up equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, the assessment order is erroneous and prejudicial to the interest of revenue. Accordingly, he set aside the assessment order with a direction to the assessing officer to pass a fresh assessment order keeping in view the issue raised in the proceedings under section 263 of the Act and after conducting proper enquiries after providing due opportunity of being heard to the assessee. 4. The learned authorized representative of the assessee submitted, assessee had received the equity shares of Asian Paints Ltd as gift in the financial 2014-15. He submitted, as per section 11(5) of the Act, the assessee has to invest the shares in the mode and manner prescribed therein. However, drawing our attention to clause (iia) to the Proviso to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative strongly relied upon the observations of learned Commissioner and submitted that since the assessee had violated the conditions of section 11(5) r.w.s. 13(1)(d) of the Act, assessee s claim of exemption could not have been allowed. The assessing officer, having failed to examine the applicability of the relevant statutory provisions, the assessment order is erroneous and prejudicial to the interest of the revenue. 7. We have considered rival submissions and perused materials on record. Undisputedly, assessee is registered as a charitable trust under section 12A of the Act. There is also no dispute even by the revenue that assessee is otherwise eligible for claiming exemption under section 11 of the Act. Learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject of the trust falls short of 85% of the income derived during that year, still, the assessee would be eligible for exemption, if such income is accumulated or set apart for application to such charitable purposes subject to the following conditions:- (i) The person concerned must furnish a statement in the prescribed form and in the prescribed manner stating the purpose and the period for which the income is accumulated or set apart, which in no case shall exceed five years; (ii) The money so accumulated or set apart is deposited in the forms or modes specified in sub section (5); and (iii) The statement has to be furnished before the due date of furnishing of return of income as specified u/s section 139(1) of the Act. 9. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in the financial year 2014-15. Therefore, as per clause (iia) of proviso to section 13(1)(d) of the Act, the provisions of section 13(1)(d) of the Act would come into play after the expiry of one year from the end of the financial year 2014-15. In other words, the prohibitory conditions of section 13(1)(d) of the Act would be applicable from 01-04-2016, falling in financial year 2016-17 relevant to assessment year 2017-18. Thus, insofar as the impugned assessment year is concerned, there is no breach or violation of the conditions of section 11(5) r.w.s. 13(1)(d) of the Act. That being the case, the assessing officer could not have invoked the provisions of section 13(1)(d) r.w.s. 11(5) of the Act to deny assessee s claim of exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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