9911796707
TMI Blog2022 (6) TMI 1512X X X X Extracts X X X X X X X X Extracts X X X X ..... ng any other deduction. From the plain reading of section 11(1)(a) it is clear that 25% of income of the trust should be allowed as a deduction. Hon ble Supreme Court in the case of CIT Vs. Programme for Community Organisation [ 2000 (11) TMI 4 - SUPREME COURT] held that 25% should be calculated on the gross receipts of income and not on the net income. The ratio laid down by the Hon ble Supreme Court in the case of Programme for Community Organisation (supra) is that for the purpose of accumulation of income, the gross receipts of the Trust need to be considered. We notice that the assessee in the computation of income has claimed the deduction u/s. 11(1)(a) on the net income. We also notice that the AO in the computation disallowing depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 11(1)(a) of the Act has to be allowed on gross receipts before application of income and accumulation u/s. 11(2) of the Act. 4. The assessee is a charitable trust running various education institutions. The assessee is registered under section 12A of the Income Tax Act, 1961 (the Act) and is also recognized under section 80G(5)(vi) of the Act. The assessee filed the return of income for the Assessment Year 2013-14 on 30.09.2013, declaring a total income of Nil after claiming deduction under section 11 of the Act as per the computation below: 4. The case was selected for scrutiny. The AO completed the assessment by making additions / disallowances towards (a) Disallowed the depreciation (b) Denied carried forward deficit by subsequent ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: (a) 3 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 accumulated or set apart is not in excess of twenty- five per cent of the income from such property; 7. Though the Act does not specify the chronological order in which the deductions under section 11 are to be allowed, the sequence of the section implies that the deduction under section 11(1)(a) is to be deducted first before considering any other deduction. From the plain reading of section 11(1)(a) it is clear that 25% of income of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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