9911796707
TMI Blog2022 (4) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... er perusal of Form No.10B as placed on record, it could be seen that the assessee has applied an amount for the purpose of charitable trust. However, as per Explanation-3 to Sec.11(1), the disallowance u/s 40(a)(ia) would not be considered as application of income. Thus, the amount which has been applied for charitable purposes would be differential amount. The assessee has earned income of ₹ 5,17,39,216 out of which an amount of ₹ 5,06,87,511/- (as computed above) has been applied for charitable purpose. The balance i.e., ₹ 10,51,705/- would be the income of the assessee since as per Form No.10B, the assessee has not set-apart any amount for application is subsequent years. This income is the same which has been comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submissions and after due consideration of orders of lower authorities, our adjudication would be as given in succeeding paragraphs. The assessee trust is duly registered u/s 12AA of the Act and is eligible to claim deduction as applicable to a charitable trust. 3. From computation of income (page 37 of paper-book), it could be seen that the assessee trust earned income of ₹ 517.39 Lacs and incurred expenditure of ₹ 555.57 Lacs for the object of the trust. The excess application of income, thus was ₹ 38.17 Lacs. However, the assessee disallowed an amount of ₹ 48.69 Lacs u/s 40(a)(ia) and computed net income of ₹ 10.51 Lacs which has been offered to tax and due taxes have been paid thereon. The CPC, vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income derived by the trust from property held under trust for charitable or religious purposes would not be included in its total income to the extent to which such income has been applied for charitable purposes in India. This sub-section also provide that the income accumulated or set apart for the charitable purposes which is not in excess of 15% of income shall also not be included in its total income. The Explanation-3 to Sec.11(1) as inserted by Finance Act, 2018 w.e.f. 01.04.2019 provide as under: - For the purposes of determining the amount of application under clause (a) or clause (b), the provisions of sub-clause (ia) of clause (a) of section 40 and subsections (3) and (3A) of section 40A, shall, mutatis mutandis, apply as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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