9911796707
TMI Blog2024 (3) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been made having regard to the benevolent provisions contained in the section 11 of the Act and that such adjustment will have to be excluded from the income of the trust u/s 11(1)(a) of the Act. Our view is also supported by the judgment of CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal [ 1993 (11) TMI 17 - GUJARAT HIGH COURT Thus we hereby direct the AO to allow the claim of the assessee regarding set off of the excess utilization of funds and accumulation of income. Assessee appeal allowed. - Shri Shamim Yahya, Accountant Member, And Shri Yogesh Kumar Us, Judicial Member For the Appellant : Shri Shailendra Bajaj, CA For the Respondent : Shri Anuj Garg, Sr. DR. ORDER PER SHAMIM YAHYA, AM : This appeal filed by the assessee for the assessment year 2015-16 is directed against the Order of Ld. CIT(A), Karnal dated 22.10.2018 on the following grounds :- 1. That the order of the Ld. CIT (A), Karnal, is bad in law and against the facts of the case. 2. That the Ld. CIT (A) has erred both in facts and in law in confirming the addition made by the AO by not adjusting earlier year excess utilization/deficit of Rs. 53,89,039/- from current year surplus for computing the income u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee preferred appeal before Ld.CIT(A), who after considering the submissions, dismissed the appeal of the assessee. 4. Now, the assessee is in appeal before us. 5. We have heard the rival contentions and perused the material available on record and also gone through the orders of the authorities below. 5.1 As regards Ground No. 1 is concerned, the same is general in nature, hence, not required adjudication. 5.2 At the time of hearing, Ld. AR submitted that Hon ble ITAT, Delhi Tribunal in assessee s own case for AY 2016-17 in ITA No.8899/Del/2019 vide order dated 12.4.2022 has dealt the exactly similar and identical issues and decided the same in favour of the assessee, hence, the Grounds No. 2 to 6 raised in the instant appeal are squarely covered by the decision of the aforesaid order dated 12.04.2022. Therefore, he requested to follow the same ratio and accordingly allow the Grounds No. 2 to 6 raised by the assessee in the present appeal. 5.3 Ld. Sr. DR did not controvert the aforesaid proposition made by the Ld. AR, but he supported the orders of the authorities below. 5.4 At the time of hearing, it was a common point between the parties that the Ground No. 2 to 6 involved in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, any claim for giving the benefit of section 11 on the basis of information supplied subsequent to the completion of assessment would mean that the assessment order will have to be reopened. I find that the Assessing Officer did not consider this part of the judgement hence, the order of the assessing authority is erroneous. It is also noticed that Ld.CIT(A) on this issue has merely affirmed the view of the AO without adverting to the submissions of the assessee. This approach of the authorities below is contrary to the binding precedents. Undisputedly, the assessee had filed Form No.10 before the completion of assessment. 10. Now, coming to the issue regarding setting off of the earlier year excess utilization of funds. Ld. Counsel for the assessee placed reliance on the judgement of the Hon ble Delhi High Court rendered in the case of Director of Income Tax vs Raghuvanshi Charitable Trust 197 Taxman 170 (Delhi). The Hon ble High Court answered the question in favour of the assessee that whether a trust can be allowed to carry forward the deficit of current year and to set off of same against the income of subsequent years; in favour of the assessee and further question whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 11, which provides that the income should have been applied for charitable or religious purposes 'only' in the year in which the income has arisen. This, according to the learned counsel, was a wrong premise and contrary to the expression of provision contained in section 11(1)(c) read with Explanation and section 11(1)(c) categorically suggests to the contrary, viz., the income has to be applied for charitable or religious purposes 'only' in the year in which it has arisen. However, we find that the Gujarat High Court has discussed this issue in greater detail and relying upon the Circular No. 100, dated 24-1-1973 Issued by the Central Board of Direct Taxes and the judgment of the Rajasthan High Court in the case of CIT v. Maharana of Mewar Charitable Foundation [1987] 164 ITR 439. We may also point out at this state that the aforesaid view of Rajasthan High Court and Gujarat High Court has been consistently followed by other High Courts in the following judgments: (i) CIT v. Institute of Banking Personnel Selection (IBPS) [2003] 264 ITR 110 (Bom.); (ii) Siddaramanna Charities Trust v, CIT [1974] 96 ITR 275 (Mys.); and iii) CIT v. Matriseva Trust [2000] 242 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal [1995] 211 ITR 293. Accordingly, we answer question No.3 in the affirmative, i.e., in favour of the assessee and against the Department. 9. It is clear from the above that as many as five High Courts have interpreted the provision in an identical and similar manner. Learned counsel for the revenue could not show any judgment where any other High Court has taken contrary view. Since we are in agreement with the view taken by the aforesaid High Court, we answer these questions in favour of the assessee and against the revenue. 11. In view of the above-mentioned binding precedents, I hereby direct the AO to allow the claim of the assessee regarding set off of excess utilization of funds and accumulation of income. Thus, Ground Nos.2 to 6 raised by the assessee are allowed in terms indicated above. 12. In the result, the appeal of the assessee is partly allowed. 6. We find that the facts and circumstances are identical in the instant year as well. The Revenue has not pointed any change into facts and circumstances of the present case. We therefore, respectfully following binding precedent (Supra), hereby direct the AO to al ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
