TaxTMI 
TaxTMI 
2018 (1) TMI 1105
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....al are as under:- 2.1 The assessee is a trust, registered u/s. 12A of the Income Tax Act, 1961 (in short 'the Act') vide order dated 24.11.2011 formed with, inter alia, the object of running an educational institution. For Assessment Year 2012-13, the assessee filed its return of income on 24.09.2012 declaring Nil income after claiming exception u/s 11 of the Act. The case was taken up for scrutiny and the assessment was completed u/s. 143(3) of the Act vide order dated 26.03.2015; restricting the accumulation upto the extent of 15% of net receipts only and disallowing depreciation claimed. 2.2 Aggrieved by the order of assessment for Assessment Year 2012-13 dated 26.03.2015, the assessee preferred an appeal before the CIT(A)-14, LTU,....
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....5% should be allowed in respect of gross income of the appellant trust. 3.1 Prayer:- In view of the above and other grounds to be adduced at the time of hearing, the appellant prays that the order passed under section 143(3) be quashed (I) Accumulation u/s 1 1(1)(a) be allowed at 15% of Gross Income of the appellant;" 3.2 The ld. AR for the assessee contended that the impugned order of the ld. CIT(A) was erroneous in holding that accumulation / set apart of income u/s. 11(1)(a) of the Act is to be allowed at 15% on net receipts as held by the AO and not on gross receipts as claimed by the assessee. It is submitted that this very issue has been considered by a co-ordinate bench of this Tribunal in the case of Mary Immacu....
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....itable purposes u/s. 11(1)(a) of the Act is to be allowed at 15% of gross receipts or net receipts i.e.; gross receipts less Revenue expenditure. We find that the issue in question was considered and adjudicated by a co-ordinate bench of the Tribunal in the case of Mary Immaculate Society and in its order in ITA Nos. 240 & 241/Bang/2015 dated 23.06.2015 held that the assessee is to be allowed accumulation of income for application for charitable purposes u/s. 11(1)(a) of the Act at 15% of gross receipts following the decision of the ITAT Special Bench in the case of Bai Sonabai Hirji Agiary Trust v ITO, 93 ITD 0070 (SB). In its order (supra), the co-ordinate bench has held as under at paras 15 and 16 thereof:- "15. The issue to be ....
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....learly covered by the decision of the Hon'ble Supreme Court in the case of CIT vs. Programme for Community Organization (supra). In the decision, their Lordships, after taking note of provisions of s. 11(1)(a), have held as under: "Having regard to the plain language of the above provision, it is clear that a charitable or religious trust is entitled to accumulate twenty-five per cent of its income derived from property held under trust. For the present purposes, the donations the assessee received, in the sum of Rs. 2,57,346/- would constitute its property and it is entitled to accumulate twenty-five per cent thereout. It is unclear on what basis the Revenue contended that it was entitled to accumulate only twenty five per cent of....
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....tory provision." This means that, when it is established that trust is entitled to full benefit of exemption under s. 11(1), the said trust is to get the benefit of twenty-five per cent and this twenty five per cent has to be understood as income of the trust under the relevant head of s. 11(1), In other words, income that is not to be included for the purpose of computing the total income would be the amount expended for purposes of trust in India. Their Lordships in the above case have emphasized on the clear and unambiguous language of s. 11(1)(a) and decided the matter on the basis of the same. It has been held that as per the statutory language of the above section the income which is to be taken for purpose of accumulation is....