9911796707
TMI Blog2025 (2) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... Research Centre[2012 (12) TMI 611 - DELHI HIGH COURT]
We set aside the order passed by the CIT(A) and direct the Assessing Officer to reduce the addition by the aggregate amount of accumulated income utilized in the Assessment Years 2009-2010 and 2011-2012 after carrying out necessary verification of the assessment records for the Assessment Years 2009-10 and 2011-12. X X X X Extracts X X X X X X X X Extracts X X X X ..... 105/- in the hands of the Appellant vide Assessment Order, dated 26/03/2015, passed under Section 143(3) of the Act. 4. Being aggrieved the Appellant preferred appeal before the CIT(A) which was dismissed vide order dated 10/06/2024. 5. The Appellant has now preferred the present appeal challenging the order passed by the CIT(A) before the Tribunal on the grounds reproduced in paragraph 2 above. 6. We have given thoughtful consideration to the rival submissions, perused the material on record and examine the position in law in light to the submission advanced by both the sides. 7. Section 11(1) of the Act provides for exemption of income derived from property held for charitable purpose to the extent such income is either applied or accumulated for charitable objects. Section 11(2) of the Act provides that subject to certain conditions the income accumulated or set-apart for specified purpose shall not be included in the total income of the previous year of receipt provided the person receiving such income furnishes a statement in the prescribed form and in the prescribed manner to the Assessing Officer stating the purpose for which receipt is being accumulated or set-apart alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charitable or religious purpose in India as is specified in the application by such person and as is in conformity with the objects of the trust; and thereupon the provisions of sub-section (3) shall apply as if the purpose specified by such person in the application under this sub-section were a purpose specified in the notice given to the [Assessing] Officer under clause (a) of subsection (2):] [Provided that the Assessing Officer shall not allow application of such income by way of payment or credit made for the purposes referred to in clause (d) of sub-section (3) of section 11:] [Provided further that in case the trust or institution, which has invested or deposited its income in accordance with the provisions of clause (b) of sub-section (2), is dissolved, the Assessing Officer may allow application of such income for the purposes referred to in clause (d) of sub-section (3) in the year in which such trust or institution was dissolved.]" 8. A perusal of Section 11(3) of the Act shows it is divided into 2 parts. The first part of Section 11(3) of the Act contains Clause (a), (b) (c), and (d) each dealing with a particular default; while the second part of Section 11(3) co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Escorts Heart Institute & Research Centre Vs. Commissioner of Income Tax, Centre: [2013] 30 taxmann.com 4 (Delhi) wherein identical issue of interpretation of provisions contained in Section 11(3) of the Act had come up for consideration before the Hon'ble Delhi High Court in a writ petition challenging the initiation of re-assessment proceedings under Section 147 of the Act. While quashing the reassessment proceedings, the Hon'ble Delhi High Court held that the provisions contained in Section 11(3) of the Act clearly provided that accumulated income shall be deemed to the income of the Assessee of the previous year in which the breach of the condition or contingency had occurred. Since, the statute had fixed the assessment year in which the income was to be brought to tax, it was impressible in law for the Assessing Officer to entertain the belief that such income was liable to tax in a different assessment year. The relevant extract of the aforesaid judgments of the Hon'ble Delhi High Court reads as under: "2. Section 10(21) provides for exemption of any income of a scientific research association which is approved under section 35(1)(ii) The first proviso, however, makes t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income shall be deemed to be the income of the assessee of the previous year in which the breach of the conditions or the contingency occurs. The statute having thus fixed the assessment year in which the entire past accumulated income falls to be taxed, it is impermissible in law for the assessing officer to entertain a reason to believe that income chargeable to tax for the assessment years 1998-99 to 2000-01 had escaped assessment. The statute has imposed a fetter on the power of the assessing officer to consider the accumulated income, as the income of the respective earlier years and has mandated it to be the income of the previous year commencing on 01.04.2000 and ending on 31.03.2001 relating to the assessment year 2001-02 which is the year in which the petitioner was amalgamated with Escorts Hospital. Chandigarh and transferred all its assets to the Chandigarh Hospital which is looked upon as a breach of the statutory provisions subject to which the exemption under section 10(21) was allowed. The consequences of the breach having been provided by the statute itself, it is not open to the assessing officer to consider the accumulated income as having escaped assessment in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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