Deemed application of trust income allowed without Form 9A or Form 10 for the relevant year

For A.Y. 2015-16, deemed application of trust income under Explanation 2(ii)(b) to section 11(1) required only a written exercise of option before the due date under section 139(1). The later prescription to file the option in a specified form applied only from A.Y. 2016-17 and could not operate retrospectively. On the stated facts, the assessee had disclosed the claim and supporting particulars before assessment, and later use of the amount for charitable purposes was also shown, so non-filing of Form 9A or Form 10 did not defeat the claim.

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Issues: Whether the assessee-trust was entitled to claim deemed application of income under Explanation 2(ii)(b) to section 11(1) for the assessment year 2015-16 without filing Form 9A or Form 10.

Analysis: The assessee's claim was under the separate mechanism in Explanation 2(ii)(b) to section 11(1), not under section 11(2). For A.Y. 2015-16, the statutory requirement was only that the option be exercised in writing before the due date under section 139(1). The later requirement of filing the option in a prescribed form was introduced from A.Y. 2016-17 and could not be applied retrospectively. The material on record showed that the assessee had disclosed the claim and the supporting particulars before completion of assessment, and the subsequent application of the amount towards charitable purposes was also demonstrated.

Conclusion: The non-filing of Form 9A or Form 10 did not disentitle the assessee to deemed application of income for A.Y. 2015-16, and the disallowance was unsustainable.

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