TaxTMI 
TaxTMI 
2026 (4) TMI 1395
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.... 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 29,04,39,083/- made as per intimation u/s. 143(1) of the Act by holding that the assessee was entitled to utilize the accumulation made u/s 11(2) of the Act during AY 2017-18 in AY 2023-24 (the 6th year), despite the express amendment made by Finance Act, 2022 to section 11(3) of the Act with effect from AY 2023-24 withdrawing the benefit of utilization in the sixth year. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the amendment to section 11(3) made by the Finance Act, 2022 could not apply to accumulations made in AY 2017-18, though the assessment year....
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....nder consideration, the assessee filed its return of income within the prescribed time declaring total income of Rs. 35,94,350/- after claiming exemption u/s 11 of the Act. The assessee also furnished audit report in Form 10B and exercised the option for accumulation of income by filing Form 9A u/s 11(1) and Form 10 u/s 11(2) of the Act. The return of income was processed by CPC u/s 143(1) of the Act, wherein total income was determined at Rs. 29,40,33,430/- by making addition u/s 11(3) of the Act in respect of accumulation of earlier years alleged to have remained unutilised within the prescribed period. Aggrieved by the said adjustment, the assessee preferred appeal before the Ld. CIT(A). 3. The Ld. CIT(A) deleted the addition by ho....
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....herefore governs all cases where the period of accumulation expires in A.Y. 2023-24 or thereafter. The Ld. DR also contended that the CPC rightly treated the unutilised accumulation as deemed income u/s 11(3) of the Act and such action is strictly within the framework of law. It was submitted that there is no question of any retrospective taxation, as the taxability arises only in the year under consideration when the statutory conditions stand violated. 4.2. The Ld. DR further submitted that the Ld. CIT(A) erred in invoking the doctrine of "impossibility of performance" to override the clear mandate of the amended statutory provisions. It was argued that when the law expressly provides for taxability in a particular year, equitable cons....
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.... 30/03/2022, leaving practically no effective time for the assessee to utilise the accumulated income of A.Y. 2017-18 within the truncated period, thereby creating a situation of impossibility. In this regard, reliance was placed on the settled legal principle that, the law does not compel a person to perform an impossible act, as laid down by the Hon'ble Supreme Court in Life Insurance Corporation of India v. CIT reported in 219 ITR 410 and Krishnaswamy S. Pd. v. Union of India reported in 281 ITR 305 (SC). 4.2. It was further submitted that the issue involved is highly debatable and, therefore, falls outside the limited scope of adjustment permissible u/s 143(1) of the Act. The Ld. AR contended that CPC could not have made such an addi....
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.... had validly accumulated income u/s 11(2) of the Act in A.Y. 2017-18 after complying with all statutory requirements, including filing of Form 10 within the prescribed time. It is also not in dispute that such accumulated income has been applied by the assessee in F.Y. 2022-23 relevant to A.Y. 2023-24. 6.1. The primary contention of the Revenue is that by virtue of the amendment brought in by the Finance Act, 2022 to section 11(3) of the Act, the benefit of utilisation in the sixth year stands withdrawn and, therefore, the unutilised accumulation becomes taxable in A.Y. 2023-24. On the contrary, the case of the assessee is that the said amendment cannot be applied to accumulations made in earlier years and that the assessee was entitled ....