TaxTMI 
TaxTMI 
2017 (8) TMI 169
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....the assessment year (AY) 2011-12. 2. The grievance of the assessee in this appeal is with regard to the taxing an amount of Rs. 3,26,56,820 on the reason that the assessee has not utilised the accumulated fund within prescribed time of five years and the same was treated as deemed income of the assessee as per section 11(3)(c) of the Income-tax Act. The facts of the issue are that the assessee is a public charitable trust constituted by a trust deed dated March 23, 2002. It was granted registration under section 12AA of the Act vide proceedings of the DIT(E), Chennai in DIT(E) No. 2(654)/04-05, dated February 14, 2005. The assessee filed its return for the assessment year 2011-12 on September 30, 2011 admitting "nil" income. The return was....
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....ated August 23, 1969 (see [1969] 74 ITR (St.) 7) for the above proposition and held that the permissible accumulation of 15 per cent./25 per cent. is also not allowable to the assessee. Thus the Assessing Officer brought to tax Rs. 3,26,56,820 (Rs.2,75,81,397 set apart in the assessment year 2005-06+ Rs. 50,75,423 being permissible accumulation of 15 per cent./25 per cent.). 4. Against this the assessee went in appeal before the Commissioner of Income-tax (Appeals). The learned Commissioner of Income-tax (Appeals) observed that as per the provisions of section 11(2) of the Act, the income can be accumulated for a period of five years if the amount is accumulated/set apart on or after April 1, 2001. In this case, the amount was set apart du....
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....tax in the immediate succeeding assessment year after the year. The learned Commissioner of Income-tax (Appeals) observed that the ratio of the judgment in the case of CIT v. Karnataka Urban Infrastructure Development and Finance Corporation [2009] 315 ITR 301 (Karn) and in the case of CIT v U. P. Upbhokta Sahkari Sangh Ltd. [2007] 288 ITR 106 (All) are not applicable. According to him, the assessee's reliance on these cases are misplaced as the nature of receipt in these cases whether subject to tax or not was the question to be decided, whereas in this case, the accumulation of income is the subject matter. He also observed that the assessee's reliance on the decision of the Madras High Court in the case of MR. A. R. Educational S....
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....uld become a restricted exemption as laid down by section 11(2). Section 11(2) does not operate to whittle down or to cut across the exemption provisions contained in section 11(1)(a) so far as such accumulated income of the previous year is concerned." By applying the above decision, the addition made by the Assessing Officer is not tenable. Therefore, he directed the Assessing Officer to delete the addition of Rs. 50,75,423 made in the assessment order. Still aggrieved, the assessee is in appeal before us. 5. The learned authorised representative submitted that the assessee has been spending accumulated money from the assessment year 2005-06 till this assessment year and the accumulated fund outstanding at the end of the assessment year....