TaxTMI 
TaxTMI 
2025 (7) TMI 1496
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.... 22,86,213/- being unspent amount out of accumulation of FY 2016-17 by relying on omission of particular sentence from clause (c) of Subsection (2) of section (11), of IT Act, it is your appellants contention that said omission amounts to substantive amendment and therefore it cannot be applied retrospectively and such debatable issue cannot be considered as prima facie adjustment u/s. 143(1) of IT Act. Your appellant prays for allowing such deduction of unspent amount. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice." 4. In ITA No.1288/PUN/2025 assessee has raised following grounds of appeal : "1. On the facts and in the circumstances of the case and in law, Ld. CPC has erred in disallowing the claim of Rs. 26.03,230/- being unspent amount out of accumulation of FY 2016-17 by relying on omission of particular sentence from clause (c) of Subsection (2) of section (11), of IT Act, it is your appellants contention that said omission amounts to substantive amendment and therefore it cannot be applied retrospecti....
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....ons of section 11(2) of the Act. Details for A.Y. 2017-18 to 2023-24 are as under : Details of Accumulation u/s. 11(2) Amount Set off C/F A.Y.2017-18 18,82,665 18,82,665 - A.Y. 2018-19 24,33,548 1,47,335 22,86,213 A.Y. 2019-20 24,50,201 - 24,50,201 A.Y. 2020-21 26,95,164 - 26,95,164 A.Y. 2021-22 13,85,953 - 13,85,953 A.Y. 2022-23 24,78,168 - 24,78,168 A.Y. 2023-24 25,69,983 - 25,69,983 Total 1,33,25,699 20,30,000 1,12,95,699 10. Now as per the above details of accumulation of funds, it has been claimed from the assessee's side that for the accumulation during A.Y.2018-19 assessee could have applied the funds upto A.Y. 2024-25 relevant to F.Y. 2023-24 whereas ld.CIT(A) has held that the assessee was required to apply the accumulated funds within five years from the F.Y. 2018-19, i.e. upt A.Y. 2023-24. Now the very same issue has been dealt by this Coordinate Bench in the case of Yashwantrao Chavan Maharashtra Open University (supra) and the finding of this Tribunal reads as under : "15. We have heard the rival arguments made by both the sides, perused the order passed by the CPC and the Ld. Addl / JCIT(A) and the pape....
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....ly:- (a) such person furnishes a statement in the prescribed form and in the prescribed manner to the Assessing Officer, stating the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed five years; (b) the money so accumulated or set apart is invested or deposited in the forms or modes specified in sub-section (5); (c) the statement referred to in clause (a) is furnished on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year: Provided that in computing the period of five years referred to in clause (a), the period during which the income could not be applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded. Explanation.-Any amount credited or paid, out of income referred to in clause (a) or clause (b) of sub-section (1), read with the Explanation to that sub-section, which is not applied, but is accumulated or set apart, to any trust or institution registered under section 12AA [or section 12AB] or to any fund or in....
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....Bringing consistency in the provisions of two exemption regimes As mentioned earlier, there is a requirement for alignment of certain provisions of the two regimes as they both intend to grant similar benefit. 4.1 Accumulation provisions i) Under the existing provisions of the Act, a trust or institution is required to apply 85% of its income during any previous year. However, if it is not able to apply 85% of its income during the previous year, it is allowed to accumulate such income for a period not exceeding 5 years as per the following provisions, namely: (I) sub-section (2) of section 11 of the Act for the trusts or institution under the second regime; and (II) third proviso to clause (23C) of section 10 of the Act for trusts or institution under the first regime. ii) However, the accumulation of income, as per the provisions of sub-section (2) of section 11 of the Act is allowed subject to the fulfilment of certain conditions while there are no such conditions specifically provided under the third proviso to clause (23C) of section 10 of the Act; iii) Similarly, sub-section (3) of section 11 of the Act provides for the specific previous year in which the accumu....
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....ome for the previous year; C) It is proposed to insert a proviso to the proposed Explanation 3 to the third proviso to clause (23C) of section 10 of the Act to provide that in computing the period of five years referred to in sub-clause (a), the period during which the income could not be applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded. D) It is also proposed to insert an Explanation (Explanation 4) to third proviso to clause (23C) of section 10 to provide that any income referred to in the proposed Explanation 3 shall be deemed to be the income of the previous year in which the following takes place- (a) the income is applied for purposes other than wholly and exclusively to the objects for which the trust or institution under the first regime is established or ceases to be accumulated or set apart for application thereto, or (b) the income ceases to remain invested or deposited in any of the forms or modes specified in subsection (5) of section 11, or (c) the income is not utilised for the purpose for which it is so accumulated or set apart during the period referred to in clause (a) of the p....
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.... consists of words printed on papers. However, conceptually it is a great deal more than an ordinary prose. There is a special peculiarity in the mode of verbal communication by a legislation. A legislation is not just a series of statements, such as one finds in a work of fiction/non fiction or even in a judgment of a court of law. There is a technique required to draft a legislation as well as to understand a legislation. Former technique is known as legislative drafting and latter one is to be found in the various principles of 'Interpretation of Statutes'. Vis-à-vis ordinary prose, a legislation differs in its provenance, lay-out and features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof. 31. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today....
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....evant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in the case of Vijay v. State of Maharashtra & Ors.[6] It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are confronted with any such situation here. 34. In such cases, retrospectively is attached to benefit the persons in contradistinction to the provision imposing some burden or liability where the presumption attaches towards prospectivity. In the instant case, the proviso added to Section 113 of the Act is not beneficial to the assessee. On the contrary, it is a provision which is onerous to the assessee. Therefore, in a case like this, we have to proceed with the normal rule of presumption against retrospective operation. Thus, the rule against retrospective operation is a fundamental rule of law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, ....
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....ed or ceases to be so accumulated or set apart or ceases to remain so invested or deposited or credited or paid or], as the case may be, of the previous year immediately following the expiry of the period aforesaid." 5. A reading of Clause (c) of Sec.11(3) of the Act would show that the time allowed for applying accumulation for charitable purpose is 5 year and one year following the expiry of 5 years. This is clear from the expression used "or in the year immediately following the expiry thereof". The previous year following the expiry of period of 5 years from AY 2008-09 will be AY 2014-15 and not AY 2013-14. This appeal relates to AY 2013-14 in which the AO sought to apply the provisions of section 11(3)(c). The Assessee did not raise such a plea regarding the applicability of the aforesaid provisions in AY 2014-15 only. 6. There is a reference to section 11(3)(d) in the order of AO, which in our opinion, is not the correct provision of law. Since the assessee did not give any explanation in not utilising the surplus funds accumulated, the AO brought to tax a sum of Rs. 1,93,54,000. 7. Before the CIT(Appeals), the plea of assessee was that it had utilised the accumulated s....
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....of Rs,1,67,47,400/- as investment in poor student hostel in the year 2013-14. Therefore, there is no contravention of section 11(3) and the accumulated surplus up to 31- 3-2013 cannot become deemed income of the assessee for the assessment year 2013-14. 3. That the learned CIT(A) has failed to take note of the AO assessment order u/s. 143(3) of the Act, dated 26..12,2016 for the A Y 2014-15, Wherein the learned. AO has concluded the assessment after considering the bonafide explanation offered by the assessee and allowed the claim of Rs. 1„67,47,400/- out of total surplus of Rs. 1,93,54,529/- and the remaining balance of Rs:26 07,129 was treated as income u/s. 13(1)(c) of the Act. 4. That the learned CIT(A) has failed to appreciate the fact that the appellant has furnished all the details with regard to claim of expenditure pertaining to construction of hostel building and other advances given for building over the periods have been produced before the AO during the course of assessment proceedings for the A Y 2014-15 and the same was considered and accepted by the AO." 10. The ld. counsel for the assessee has also filed before us a copy of the order of assessment for A....