TaxTMI 
TaxTMI 
2025 (7) TMI 317
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....of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). 2. The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2023-24 on 09.10.2023 declaring income of Rs. 5,38,930/-. The assessee is a Trust eligible for deduction under Section 11 of the Act. The assessee had accumulated an amount of Rs. 4,60,000/- in the Financial Year 2016-17 which was required to be utilised within a period of five years as provided under Section 11(2) of the Act. In the return of income for the A.Y. 2023-24, the assessee had shown utilisation of Rs. 2,32,073/- out of the funds accumulated during the Financial Year (F.Y.) 2016-17 and the balance unutilised amount of Rs. 2,27,927/- was offered for tax. The CPC whi....
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....etrospectively effective, and our claim for utilization made in FY 2022-23 is justified and within the law. 2.2. The ld. CIT-A has wrongly held that the amendment in section 11(3)(c) made by Finance Act 2022 w.e.f.1-4-2023 in curtailing one year from the period of utilization of accumulation of income u/s.11(2) does not create a new obligation but merely strengthens the time limit for an existing obligation with an intent to ensure strict compliance with the time limit. 3. The ld. CTT-A erred in holding that the original provision U/s.11(2) r.w.s 11(3) mandated utilization within five years and additional one year was provided as a mere grace period which was only a concession and not a right. 4 The ld. CIT-A has ....
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....ditional one year was omitted vide Finance Act 2022 w.e.f. 01.04.2023. However, as the fund was accumulated by the assessee in this case in the F.Y. 2016-17, the original five year period for utilisation of fund was till the end of F.Y.2021-22. Further, the assessee also had additional one year i.e. F.Y. 2022-23 for the utilization of the accumulated fund. Accordingly, the assessee had utilised the accumulated fund of Rs. 2,32,073/- in the additional year i.e. in F.Y. 2022-23 and had claimed the deduction in the return for A.Y. 2023- 24. According to the Ld. AR, the amendment made in Section 11(3)(c) of the Act by withdrawing the additional one-year period for utilising the accumulated fund was not intended for the funds accumulated in the ....
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....t point of time which is as under:- (3) Any income referred to in sub-section (2) which- (a) is applied to purposes other than charitable or religious purposes as aforesaid or ceases to be accumulated or set apart for application thereto, or (b) ceases to remain invested or deposited in any of the forms or modes specified in subsection (5), or (c) is not utilised for the purpose for which it is so accumulated or set apart during the period referred to in clause (a) of that sub-section 72[or in the year immediately following the expiry thereof]*, (d) is credited or paid to any trust or institution registered under section 12AA ^73[or section 12AB] or to any fund or institution or trust or any univ....
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....r period for utilisation of funds was omitted vide Finance Act 2022 w.e.f. 01.04.2023. The contention of the assessee is that the amended provision would create an impossible and absurd situation as the assessee would be left with no time to utilise the funds accumulated in F.Y.2016-17. The original five years' time period in this case had expired on 31.02.2022. As per the unamended provisions, the assessee had additional one year to utilise the funds. The removal of additional one-year period would create an impossible or absurd situation as the assessee will be left with no time to utilise the accumulated funds. The doctrine of impossibility (lex non cogit ad inpossibilia) would be applicable in the situation when assessee would be left w....