2016 (6) TMI 133

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....ey filed their return for the assessment year 2005-06 declaring 'NIL' income after claiming exemption under Section 10 (21) of the Act. Assessment, under Section 143 (3) of the Act, was made on 12.12.2007 and it was found that the assessee had not filed Form-10. A notice, under Section 148 of the Act, was issued and a re-assessment order was passed determining the total income of the assessee at Rs. 55,73,560/-. The assessing officer observed that the assessee had declared gross receipts of Rs. 1,50,33,273/-; and had arrived at a surplus of Rs. 55,73,560/- after claiming expenditure under various heads; as per Section 11 (2) (a) of the Act, if the assessee accumulates or sets apart more than 15% of the gross receipts, the assessee has to fi....

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.... of the assessee and, if the claim of deficit of Rs. 46,42,125/- was found to be correct, the surplus should be arrived at after setting off the same from the surplus of Rs. 55,73,560/-. Aggrieved thereby, the Revenue carried the matter in appeal to the Tribunal. The Tribunal, relying on the judgment of the Madras High Court in Govindu Naicker Estate v. ADIT and another and CIT, Tamilnadu-I v. Rao Bahadur Calavala Cunnan Chetty Charities and the judgment of the Gujarat High Court in CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal, confi rmed the order of the Commissioner of Income Tax, directed the assessing officer to verify the records and, if the claim of deficit of Rs. 46,42,125/- was found to be correct, the surplus was directed ....

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....application of income for charitable and religious purposes under Section 11 (1) (a); there is nothing in the language of Section 11 (1) (a) to indicate that the expenditure incurred in the earlier year cannot be met from out of the income of the subsequent year; utilization of such income, for meeting the expenditure of the earlier year, would amount to such income being applied for charitable and religious purposes; the deficit, arising out of excess of expenditure over income, during the previous year, relevant to the assessment year, should be set off against the surplus of income over expenditure relating to subsequent year in computing the taxable income of the later assessment year. As noted hereinabove, the CBDT circular dated 24....