TaxTMI 
TaxTMI 
1989 (6) TMI 111
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....s. 2,45,612 and the same had been spent towards charitable purposes. In view of the above, the assessee claimed exemption under section 11 of the Act as in earlier years. But the Income-tax Officer denied exemption under section 11 of the Act because the funds of the assessee-Trust invested or deposited before 1st March, 1983 otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 continued to remain so invested or deposited after 30th day of November, 1983 and, therefore, as per section 13(1)(d) of the Act as substituted by the Finance Act, 1983 with effect from 1-4-1983, the assessee-Trust forfeited the exemption under section 11, which was otherwise admissible to it. According to the Income-tax Officer, the Finance Act, 1983 had amended the provisions of section 13(1)(d) and the amended provision came into force with effect from 1-4-1983 and was applicable to the assessment year 1983-84 and the investments, which were not in order as on 28-2-1983, should not be continued in the same mode of investment after 30-11-1983 in case the assessee was not to forfeit the exemption under section 11. But, in the case of the assessee, the investment....
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.... the funds of the trust in the forms and modes specified in section 11(5) by 30-11-1983 and therefore the exemption under section 11 cannot be granted to the assessee. 4. In further appeal before us, it was vehemently contended that Commissioner (A) erred in not adverting to all the contentions of the assessee. It was vehemently argued by the learned representative of the assessee that the amended provisions of section 13(1)(d) took effect only from the assessment year 1984-85 and therefore the assessee should not have been denied the exemption under section 11 (for the assessment year under consideration viz. 1993-84). In this connection, it was stressed that there could not have been a contravention of section 13(1)(d) by the assessee in so far as the assessment year under consideration viz., assessment year 1983-84 was concerned because the relevant previous year for the same ended on 31-3-1983 and section 13(1)(d) allowed time to the assessee up to 30-11-1983 to change over to the prescribed pattern of investment. Without prejudice to the above, it was submitted that even on the view that the amended provisions of section 13(1)(d) were applicable to assessment year 1983-84, fo....
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....of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof, if for any period during the previous year-- (i) any funds of the trust or institution are invested or deposited after the 28th day of February, 1983 otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 ; or (ii) any funds of the trust or institution invested or deposited before the 1st day of March, 1983 otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 continue to remain so invested or deposited after the 30th day of November, 1983 ; or (iii) any shares in a company [not being a Govt. company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act] are held by the trust or institution after the 30th day of November, 1983 : Provided that nothing in this clause shall apply in relation to-- (i) any assets held by the trust or institution where such assets form part of the corpus of the trust or institution as on the 1st day of June, 1973 and such assets were not purchased by the trust or inst....
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....r consideration by the Economic Administration Reforms Commission, the date for the commencement of the new pattern of investment was again extended by a further period of one year by the Finance Act, 1982. Consequently, if any funds of a trust or institution were invested or deposited or continued to be invested or deposited in any mode or form other than the one specified in section 13(5) at any time during any previous year commencing on or after 1-4-1982, the trust or institution would not be entitled to exemption under section 11 for the assessment year 1983-84 and subsequent years. But then, by Finance Act, 1983, yet another amendment was made to section 13(1)(d) by introducing a cut-off date for changing the investment in line with the pattern laid down in section 11(5) of the Act and that cut-off date was 30-11-1983. In other words, in order not to forfeit the exemption under section 11 of the Act, the investments, which on 28-2-1983 were not in conformity with the pattern of investment laid down in section 11(5) of the Act, should be converted into the investments specified in section 11(5) of the Act on or before 30-11-1983. In this connection, it would be advantageous to....
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....efore 30-11-1983 to avoid disentitlement of the exemption under section 11, should be noted very carefully. If the first part of section 13(1)(d) or more precisely the words "if for any period during the previous year" occurring in the beginning of section 13(1)(d) and the cut-off date laid down in section 13(1)(d)(ii) and (iii) are to be harmoniously reconciled, it would be clear that section 13(1)(d)(ii) and (iii) could apply for the first time only to an assessment year, in the relevant previous year of which the cut-off date actually falls. It would be next to impossibility to change the investments, which were not in conformity with the prescribed pattern of investment as on 28-2-1983, to the prescribed pattern of investment before 30-11-1983, when the accounting year itself had ended earlier to 30-11-1983 and applicability of section 13(1)(d) had to be considered with reference to the position obtained during the relevant previous year. Therefore, having regard to the words "if for any period during the previous year" occurring at the beginning of section 13(1)(d), section 13(1)(d)(ii) and (iii) can never apply to the assessment year 1983-84 in the case of any trust because t....