TaxTMI 
TaxTMI 
2022 (3) TMI 711
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....d not real application of income for the objects of the trust? Revenue craves to add, alter amend modify, substitute delete/or rescind all or any Grounds of appeal on or before the final hearing if necessary so arises. 3. Brief facts of the case are that the assessee is a public charitable trust enjoying exemption under section 12A from the year 2010 as well as granted approval under section 80G(5) of the Act from 2012 onwards. For the Asst. Year 2015-16, the assessee filed its return of income on 24.2.2016 claiming deficit of Rs. 5,71,98,746/-. The reasons for deficit was that the assessee claimed accumulation amounting to Rs. 1,94,34,107/- at 15% on total income which was towards capital expenditure. The AO held that section 11(1)(a) of the Act talks about accumulation to the extent of 15%. Nowhere in the section flat rate at 15% deduction or accumulation is allowed. Thus, it was concluded that accumulation under section 11(1)(a) of the Act is allowed to the extent of only available surplus funds/income or maximum 15% of income whichever is less. The AO further held that the income of the trust was not computed on principles of business income, which contained provisions of ca....
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.... 15% of amount u/s. 11(1)(a) of the Act and thereafter reduce the amount applied for the objects of the trust. Thus, ground No. 1 of appeal is allowed. 4.1. On the second issue of carry forward of excess expenditure for set off in the subsequent years, the Ld. CIT(A) followed judgment of Hon'ble jurisdictional High Court in the case of CIT Vs. Shri Plot Shwetambar Murtipuja Jain Mandal, 211 ITR 293 (Guj.) wherein, Hon'ble Court held as follows: "A. bare perusal of section 11 of the Income-tax Act, 1961, shows that the income derived from property held under trust wholly for charitable or religious purposes to the extent to which such income is applied to such purposes in India is to be excluded for the purposes of computing the income of the trust for the purpose of assessment. There are no words of limitation in this section providing that the income should have been applied for charitable or religious purposes only in the year in which the income had arisen. The word "apply" means "to put to use" or "to turn to use" or "to make use" or "to putt practical use". Having regard the provision of section 11 of the Act, it is clear that when the income of a trust is used or p....
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..... year 2012-13 is as follows: "... 9. We find that the identical issue cropped up in assessee's own case in AY 2010-11 as well, wherein no error was found in the action of the CIT(A) for granting accumulation or set apart of income already applied in this year to the extent of 15% of the receipt and consequently, the deficit was suitably enhanced. The relevant operative para of the order of the co-ordinate bench in assessee's own case is reproduced hereunder: "3. With the assistance of the Ld. representative, we have gone through the record carefully. The Ld. counsel for the assessee has placed on record a copy of the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Programme for Community Organisation, 248 ITR 1 : 166 CR 401 (SC). We find that this decision has silenced the controversy. It is very small decision. It read as under: 1. The questions that were referred to the High Court for consideration, at the instance of the revenue, read thus: "1. Whether, on the facts and in the circumstances of the case and on an interpretation of the relevant provisions of the Income-tax Act, 1961, the assessee is entitled to exemption at 25 per cent on Rs. 2,57....
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....t it was entitled to accumulate only twenty-five per cent of Rs. 87,010. 5. For the aforesaid reasons, the civil appeal is dismissed. 6. No order as to costs." 4. In view of the above decision, we do not find any error in the order of the CIT(A). The appeal of the Revenue is dismissed." 10. In parity with the view already taken by the co-ordinate bench in assessee's own case in the earlier assessment year, the CIT(A) was justified in admitting the claim of the assessee for accumulation of income. The CIT(A) has rightly viewed that exemption under s. 11(1)(a) of the Act i.e. 15% of the income is unfettered and not subject to any conditions. Hence, we do not see any perceptible reason for our indulgence with the order of the CIT(A). We thus decline to interfere." 11. In the result, appeal of the Revenue is dismissed." 7. On the second issue of carry forward of excess expenses and set off of the same in the subsequent year, the Ld. Counsel for the assessee relied upon the decision of jurisdictional High Court in the case of CIT Vs. Shri Plot Shwetambar Murtipuja Jain Mandal (supra). In this case, the Hon'ble jurisdictional High Court based on the well settled positi....