TaxTMI 
TaxTMI 
2018 (2) TMI 1087
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....s 12A of the Income-tax Act, 1961 (in short 'the Act') vide order dated 11/9/1985, field its return of income for asst. year 2013-14 on 22/8/2013 declaring NIL income after claiming exemption u/s 11 of the Act. The return was processed u/s 143(1) of the Act and the case was subsequently taken up for scrutiny. The assessment was concluded u/s 143(3) of the Act vide order dated 11/6/2015 wherein the assessee's income was determined at Nil, but after (i) disallowance of depreciation and (ii) disallowance of claim for carry forward of excess expenditure for adjustment against income of years where surplus income would be available, by holding that exemption u/s 11(1)(a) of the Act is allowable only for application of the current years income. ....
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....set-off of loss from one source against the income from another source, set-off of I from one head against income from another head and carry forward and set-off of loss against the income of subsequent years as envisaged u/s 70 to 79 are also not applicable to the charitable trusts/institutions. c) The CIT (A) has failed to discuss the issue in detail bringing out the facts and applying the relevant provisions of the Act, but came to a conclusion that excess expenditure/excess application shall be allowed to be carried forward and set-off against the income of the future assessment years and, thereby, rendering the order perverse." 3.2 Ground No.1(a)( to (c) - Carry forward of excess expenditure of Rs. 98,87,901/- for adjustment again....
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....6 dated 7/4/2017. In the case of Shraddha Trust (Supra) the Co-ordinate bench at para 8 of its order has held as under:- "8. The final grounds of appeal relates to carry forward of excess application of income to subsequent years This issue is covered against the revenue by coordinate bench of Tribunal in the case of Deputy Director of Income-tax vs. Jyothy charitable Trust (60 taxmann.com 165). The relevant part of the order is reproduced below: 14. We have considered his submission. Section 11(1)(a) does not contain any words of limitation to the effect that the income should have been applied for charitable or religious purpose only in the year in which the income has arisen. The application for charitable purposes as contemplated i....
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....rust has to be arrived at having due regard to the commercial principles, that s. Ii is a benevolent provision, and that the expenditure incurred on religious or charitable purposes in earlier year or years can be adjusted against the income of the subsequent ear. The principle that the loss incurred under one head can only be set off against the income from the same head is not of any relevance, if the expenditure incurred was for religious or charitable purposes, and the expenditure adjusted against the income of the trust in a subsequent year, would not amount to an incidence of loss of an earlier year being set off against the profit of a subsequent year. The object of the religious and charitable trust can only be achieved by incurring....