TaxTMI 
TaxTMI 
2025 (9) TMI 1035
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.... has been utilised beyond the period of 5 years from the F.Y. of accumulation by virtue of amendment in section 11(1)(c) of the Act applicable from Asst. Year 2023-24. For the sake of convenience, a table showing the "pre and" post amended provision of section 11(1)(c) is appended herewith. The addition of Rs. 2,00,000/- ought not to have been made by virtue of amended section 11(1) (c) of the Act as it was impossible to implement the amended 11(1)(c) from A.Y. 2023-24. The Finance Bill 2022 was tabled in the Parliament on 01-02- 2022. The said bill received the assent of the President of India on 30-03-2022 leaving only one day to spend accumulated income u/s 11(2) of the Act which was otherwise allowable if accumulated income is spent by the end of sixth financial year as per the pre amended provisions of section 11(1)(c) of the Act. The addition of Rs. 2,00,000/- has been made liable to tax @ 30% plus cess @ 4% of 30% u/sll5BBloftheAct. In facts and circumstances of the case as mentioned above, the addition of Rs. 2,00,000/- deserves be deleted." 4. The brief facts of the case are that the assessee, Sarangpur Talia's Pole Punch Trust, was denied exemption un....
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....ew that the present issue is directly covered in favour of the assessee by the Ahmedabad ITAT decision in the case of Meshri Mahajan Vanda vs. Income-tax Officer (Exemption) [2025] 178 taxmann.com 93 (Ahmedabad - Trib.)[02-09-2025] in which ITAT held where assessee trust accumulated income pertaining to financial years 2016-17, assessee had time window till 31-3-2023 by which it could utilize accumulated income. The amendment brought in by Finance Act, 2022, did not debar assessee from availing said time window in respect of existing accumulations and amendment had to be read prospectively in respect of fresh accumulations for period pertaining to previous year starting from 1-4-2022 onwards. While passing the order, ITAT made the following observations: 7. We have heard the rival contentions and perused the material on record. We note that the present issue is directly covered in favour of the assessee in light of the Ahmedabad ITAT decision in the case of Shri Krishnanagar Vaishvsamaj (supra). It would be useful to reproduce the relevant extracts of the Ruling, for ready reference: "7. We have considered the rival submissions. In the present case, the assessee h....
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....e year immediately following the expiry thereof'. Thus, the assessee had time limit of five years and one additional year to utilise the accumulated funds. Since the funds were accumulated in this case in the F. Y. 2016-17, the extended time period for utilisation of fund was till the end of the F.Y. 2022-23. In the present case, the assessee had utilised funds to the extent of Rs. 2,32,073/- in the additional one-year period and accordingly claimed the deduction in the return for A. Y. 2023-24. 7.2 The CPC has disallowed the claim while processing the return for the reason that the additional one-year 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 lef....
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.... time window till 31-3-2023 and 31-3-2024 respectively by which it had to utilize accumulated income and in that view of matter, amendment brought in by Finance Act, 2022 with effect from 14-2023, does not debar assessee from availing said time window in respect of existing accumulations and amendment has to be read prospectively in respect of fresh accumulations for period pertaining to previous year starting from 1-4-2022 onwards. Therefore, where assessee had accumulated income during financial years 2016-17 and 2017-18 and utilized same within period of six years, same could not be brought to tax in assessment year 2023-24 and, thus, addition made by Assessing Officer was to be deleted. 9. Further, in the case of Yashwantrao Chavan Maharashtra Open University v. CIT(E) [2025] 175 taxmann.com 988 (Pune - Trib.)/ITA No. 505/pun/2025 vide order dated 23.06.205, the Pune ITAT while dealing with similar set of facts and issue for consideration, made the following observations: "21. In light of the above discussion, we are of the considered opinion that since the assessee in the instant case has utilized the accumulated surplus funds in the year immediately followin....