TaxTMI 
TaxTMI 
2025 (7) TMI 1496
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....w, Ld. CPC has erred in disallowing the claim of Rs. 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 ....
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....trust registered u/s. 12A of the Act and is accumulating the funds as per the provisions 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 : ....
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....shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, namely:- (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), rea....
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....year i.e. financial year 2022-23. The assessee in the instant case undisputedly has utilized the amount before 31.03.2023. 18. We find the relevant provisions of Memorandum explaining provisions of the Finance Bill, 2022 read as under: "4. 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 ....
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....ed five years; (b) the money so accumulated or set apart is invested or deposited in the forms or modes specified in sub-section (5) of section 11; and (c) the statement referred to in clause (a) of Explanation 3 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; 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....
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....bsequent assessment years. [Clauses 4 and 5]" 19. We find the Hon'ble Supreme Court in the case of CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466 (SC) on the issue of interpretation of taxing statutues about retrospective amendment and prospective amendment, has held as under: "30. A legislation, be it a statutory Act or a statutory Rule or a statutory Notification, may physically 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. ....
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.... the public generally, and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. In Government of India & Ors. v. Indian Tobacco Association[5], the doctrine of fairness was held to be relevant 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 ....
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.... or in the year immediately following the expiry thereof, (d) is credited or paid to any trust or institution registered under section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub- clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, shall be deemed to be the income of such person of the previous year in which it is so applied 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 t....
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....This aspect has been highlighted by the assessee in ground Nos.2 to 4 in its appeal before the Tribunal, which reads as follows:- "2. That the learned CIT( A) ought to have appreciated that u/s 11(3)(c) of the Income Tax Act, 1961 provides that accumulated income should be utilized during the 5 years period of accumulation or in the year immediately following the expiry thereof. That means, in the facts & circumstances of this case, the assessee at liberty to utilize the accumulated surplus up to 31-03- 2014. Now in this case, the assessee has utilized 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....