TaxTMI 
TaxTMI 
2025 (8) TMI 1764
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....ack with the total income of the assessee for impugned assessment year. The Ld.AO made the addition under section 11(3) for differential sum of Rs. 3 crores being the amount applied for specific objects in F.Y. 2022-23 related to A.Y. 2023-24 out of accumulation made under section 11(2) of the Act for A.Y. 2017-18. The Ld. AO considered the amendment to Finance Act, 2022 and held that the amount of Rs. 3 crores cannot be added. The Ld. AR stated that under section 11(3) of the Act for this impugned assessment year as being the sixth year of Accumulation for accumulation of income under section 11(2) of the Act. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) considering the submission of the assessee allowed the appeal by deleting the addition. Being aggrieved, the revenue filed an appeal before us. 3. The Ld. DR argued and filed a written note dated 08/08/2025 which is placed on the record. The relevant paragraphs of the written note is extracted below:- "The Revenue Department respectfully submits that the Commissioner of Income Tax (Appeals) (CIT(A)) erred in allowing the appeal of the Basilica of Our Lady of the Mount and deleting the ad....
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....cepted and accordingly, the addition made by the Ld.AO should be upheld. 4. The Ld. AR argued and fully relied on the order of Ld. CIT(A). The relevant paragraphs of the impugned appellate order is reproduced as below:- "5.4 As per section 11(3) amended by Finance Act, 2022 w.e.f. 2023-24, the accumulated income can be applied within 5 years from year of accumulation and not so applied, it will be taxed in the 5th year self. By applying these amended provisions to the appellant's case, the income accumulated in the FY. 2016-17 and not applied upto F.Y. 2021-22, was taxable in A.Y. 2022-23. This makes clear that the accumulated income pertaining to A.Y. 2017-18 is not taxable in AY. 2009-24 under the post-amended provisions of section 11(3) of the Act also 5.5 The amended provisions of section 15(3) of the Act by the Finance Act, 2012 have been made applicable to Assessment Year 2023-24 and subsequent assessment years. However, the intention of the legislature behand these amendments can not be to curtail the period of accumulation from 5 years done in compliance with the law existing at the relevant time to 5 years and to tax the unutilized accumulated income i....
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....ility of such accumulated income and whether the same can be brought to tax in the impugned assessment year 2023-24. The relevant provisions under consideration are sub-section (2) to Section 11 and sub-section (3) to Section 11. Under the existing provisions of the Act, a trust or institution is required to apply 85% of its income during the relevant previous year. Sub-section (2) to Section 11 provides that where the trust or institution is not able to apply 85% of its income during the previous year, it is allowed to accumulate or set apart either in whole or in part for application to such purposes in India and in such a scenario, income so accumulated or set apart shall not be included in the total income of the previous year of such trust or institution. However, the same is subject to satisfaction of certain conditions, namely, such trust or institution has to furnish a statement as so prescribed to the Assessing officer stating the purpose for which the income is to be 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. Secondly, the money so accumulated or set apart is invested or deposite....
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....ng the date on which the section was introduced into the statute. In rebuttal, the Ld. AR submitted that, for purposes of taxability, the amendment in question cannot be applied retrospectively, as it is not curative or clarificatory but substantive in nature, and hence must operate prospectively. It was further contended that the alleged taxability of Rs. 3 crores in accumulated surplus falls within the permissible six-year period and, therefore, the amendment has no application to the assessee's case. The Ld. AR further submitted that the issue stands squarely covered by the decision of the co-ordinate bench of the ITAT, Pune Bench "B" in Yashwantrao Chavan Maharashtra Open University v. CIT (Exemption), ITA No. 505/PUN/2025, order dated 23.06.2025, wherein it was held that the amendment introduced by the Finance Act, 2022, is not retrospective in nature insofar as it relates to the utilisation of accumulated surplus under Section 11(3) of the Act. The said view has also been followed by the co-ordinate bench of the ITAT, Mumbai Bench "D" in Shri Dadar Digamber Jain Mumukshu Mandal (supra). In addition, reliance has been placed on the judgment of the Hon'ble Supreme Court i....