TaxTMI 
TaxTMI 
2026 (4) TMI 633
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....ssment years. Each of the above grounds is without prejudice to one another and the appellant herein seeks the leave of the Learned Commissioner of Income Tax (Appeals) to add, delete, amend or otherwise modify the above grounds either before or at the time of hearing of this appeal. 3. At the outset, the ld. A.R. of the assessee submitted that there is a delay of 21 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention on an application for condonation of delay dated 21.7.2025, which is reproduced below for ease of reference and record: 3.1. On going through the above application for condonation, we find that the assessee could not file the appeal within the prescribed period for the reason that the assessee's counsel took time to analyze and take steps for further course of action & hence, there is a delay. The ld. A.R. also submitted that the delay is unintentional and no benefit can be attributed to the assessee in filing the appeal belatedly. He thus prayed to condone the delay and requested to consider the issues raised by the assessee on merits. 3.2 Perused the record and having heard ld. Counsel for the assess....
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....4/01/2024. 4.2 Without prejudice, the assessee submitted that the surplus of Rs. 76,29,084/- was inadvertently claimed as deduction under the amount deemed to have been applied to charitable or religious purposes in India during the previous year as per clause (2) of explanation to section 11(1) of the Act instead of Rs. 26,05,262/- towards permissible amount of accumulation or set apart for application to charitable or religious purposes to the extent it does not exceed 15% of income derived from property & balance of Rs. 50,23,822/- towards set off the brought forward expenditure/application over income/Receipts with the current year's income as per the provision contained in section 11(1) of the Act for which no such form 9A was required to be filed. The assessee has also submitted the detailed chart of excess of Applications over the receipts beginning from AY 2010-11 to AY 2017-18. (Placed at Pg.44 of the PB). 5. Aggrieved by the aforesaid intimation dated 16/03/2019 passed u/s 143(1) of the Act, the assessee preferred an appeal before the ld. CIT(A)/Addl/JCIT(A). 6. The ld. Addl/JCIT(A) on the one hand held that the reasons for the delay of 726 days in filing the app....
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.... year as per clause (2) of explanation to section 11(1)" but did not exercised its option by e- filing Form-9A before due date as per Rule-17 of the Income Tax Rules. 10. We have heard the rival submissions & perused the materials available on record. It is an undisputed fact that the assessee trust is registered u/s 12A/12AA of the Act since 17/08/1978. The claim of the assessee is that while filing the return of income the entire surplus of Rs. 76,29,084/- was inadvertently claimed as exemption under "Amount deemed to have been applied to charitable purposes in India during the previous year as per clause (2) of explanation to section 11(1) of the Act". The assessee by way of written submission is now claiming that this surplus of Rs. 76,29,084/- shall be reduced by an amount of Rs. 26,05,262/- towards permissible amount of accumulation or set apart for application to charitable or religious purposes to the extent it does not exceed 15% of income derived from property & balance of Rs. 50,23,822/- towards set off the brought forward expenditure/application over income/Receipts with the current year's income as per the provision contained in section 11(1) of the Act for which no....
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....that the income should have been applied for charitable or religious purpose only in the year in which the income has arisen. We are, therefore, of the opinion that the adjustment of the excess expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year would amount to applying the income of the trust for charitable and religious purposes in the subsequent year in which such adjustment has been made and will have to be excluded from the income of the trust under section 11(1)(a) of the Act. The form 9A is not required to be filed when the charitable trust is setting off the excess applications of previous years to the current year's income/receipts. We are also of the opinion that the issue involved in this appeal is no more res integra. 10.2 We also take note of the fact that the above issue is covered against the revenue by co-ordinate bench of this Tribunal in the case of Deputy Director of Income Tax(E) vs. Jyothy Charitable Trust reported in [2015] 60 taxmann.com 165 (Bangalore - Trib.). The relevant paragraph is reproduced below for ease of reference & convenience- "14. We ....
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....being set off against the profit of a subsequent year. The object of the religious and charitable trust can only be achieved by incurring expenditure and in order to incur that expenditure, the trust should have an income. So long as the expenditure incurred is on religious or charitable purposes, it is the expenditure properly incurred by the trust, and the income from out of which that expenditure is incurred, would not be liable to tax. The expenditure, if incurred in an earlier year is adjusted against the income of a later year, it has to be held that the trust had incurred expenditure on religious and charitable purposes from the income of the subsequent year, even though the actual expenditure was in the earlier years, if in the books of account of the trust such earlier expenditure had been set off against the income of the subsequent year. The expenditure that can be so adjusted can only be expenditure on religious and charitable purposes and no other. The High Court relied on the decision in the case of Society of Sisters of ST. Anne (supra )." 10.3 Further, the Hon'ble High Court of Delhi in the case of Director of Income-tax v. Raghuvanshi Charitable Trust reported i....
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....se and contrary to the expression of provision contained in section 11(1)(c) read with Explanation and section 11(1)(c) categorically suggests to the contrary, viz., the income has to be applied for charitable or religious purposes 'only' in the year in which it has arisen. However, we find that the Gujarat High Court has discussed this issue in greater detail and relying upon the Circular No. 100, dated 24-1-1973 issued by the Central Board of Direct Taxes and the judgment of the Rajasthan High Court in the case of CIT v. Maharana of Mewar Charitable Foundation [1987] 164 ITR 439. We may also point out at this state that the aforesaid view of Rajasthan High Court and Gujarat High Court has been consistently followed by other High Courts in the following judgments : (i) CIT v. Institute of BankingPersonnel Selection (IBPS) [2003] 264 ITR 110 (Bom.); (ii) Siddaramanna Charities Trust v. CIT [1974] 96 ITR 275 (Mys.); and (iii) CIT v. Matriseva Trust [2000] 242 ITR 20 (Mad.); 8. It would be fruitful to refer to the discussions contained in Institute of Banking Personnel Selection (IBPS)'s case (supra ), Per Hon'ble Mr. Justice S.H. Kapadia, w....
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....ainst the Department." 9. It is clear from the above that as many as five High Courts have interpreted the provision in an identical and similar manner. Learned counsel for the revenue could not show any judgment where any other High Court has taken contrary view. Since we are in agreement with the view taken by the aforesaid High Court, we answer these questions in favour of the assessee and against the revenue." 10.4 The Apex Court in the case of Commissioner of Income Tax (Exemption) vs. Subros Educational Society reported in [2018] 96 taxmann.com 652 (SC) has also approved the same by dismissing the Misc. application of the Revenue which is reproduced below- "ORDER 1. In this application filed by the Income-tax Department it is stated that Civil Appeal No. 5171 of 2016 arises out of Special Leave Petition (C) . . . CC No. 8982/2016 was tagged with other appeals and the batch matters were decided by this Court on 13-12-2017. However, the following question was also raised in the instant appeal which was not the subject matter of those appeals: "(a) Whether any excess expenditure incurred by the trust/charitable institution in earlier assess....