TaxTMI 
TaxTMI 
2026 (1) TMI 1112
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....7,99,090/- without considering the settled legal position that the law as it stands on the first day of April must apply to the assessment for that year. 5. That the Ld. CIT(A) has erred in interpreting the applicability of the amended provisions under section 11(3) with effect from FY 2022-23." 2. Brief facts of the case are, assessee is a Trust set up by Ministry of Corporate Affairs in partnership with Confederation of Indian Industry, Institute of Company Secretaries of India and Institute of Chartered Accountants of India to promote good corporate governance practices both at the level of individual corporate and industry as a whole. The assessee is duly registered Trust under section 12A and 80G of the Income-tax Act, 1961 (for short 'the Act') and continuous to claim exemption u/s 11 since inception. 3. Assessee filed its return of income for the impugned year under consideration which was processed u/s 143(1) of the Act by the CPC. The CPC observed that assessee had accumulated funds exceeding 15% of the total receipt in the year relevant to Assessment Year 2017-18 but failed to utilised it for charitable activities within next five years. While processing th....
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....rom AY 2023-24 onwards whereas this issue is already dealt with by the coordinate Benches in the case of Sarangpur Talia's Pole Punch Trust (supra) wherein it was held as under :- "6. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. We are of the considered view 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 th....
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....tely following the expiry thereof' shall be omtt. by the Act No. 6 of 2022, w.e.f. 1-4- 2023. 7.1 As per the sub-clause (c) of Section 11(3), the accumulated amount shall be deemed to be the income of the assessee if it was not utilised within the period of five years as mentioned in Section 11(2)(a) of the Act, or "in the 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 u....
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....lia's Pole Punch Trust vs. ITO(E) Asst.Year- 2023-24 2022 with effect from 1-4-2023 which omitted extra period of one year following expiry of initial period of accumulation of five years is prospective in nature and, thus, same would be applicable only to fresh accumulations from assessment year 2023-24 onwards. Therefore, as far as accumulation relating to financial years 2016-17 and 2017-18 were concerned, assessee had 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 Uni....