TaxTMI 
TaxTMI 
2026 (9) TMI 1240
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....r 2019-20. The Assessee has raised the following grounds of appeal: 1) On fact and in law, the learned Commissioner of Income tax (Appeals) (hereinafter referred to as Ld. CIT-A) had failed to appreciate that the learned assessing officer (hereinafter referred to as LAO) had erred in disallowing of Rs. 52,90,000/- which claimed by the appellant as deemed application of income as per clause 2 of explanation to section 11(1). Under the facts and circumstance of the matter, the Ld. CIT-A ought to have directed the LAO not to disallow the said amount. 2) On fact and in law, the Ld. CIT-A had failed to appreciate that the LAO had erred in disallowing of income accumulated OR set-off of Rs. 9,34,116/- u/s. section 11(1)(a). Unde....
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.... processing the return, the CPC did not allow the assessee's claim of Rs. 52,90,000/- towards deemed application of income under Explanation 1 to section 11(1) of the Act. The CPC also disallowed the assessee's claim of Rs. 9,34,116/- towards accumulation or set apart of income under section 11(1)(a) of the Act. Thus, the CPC denied exemption in respect of the aggregate amount of Rs. 62,24,116/-, comprising of Rs. 52,90,000/- which was claimed as deemed application and Rs. 9,34,116/- which was claimed as permissible accumulation. 4. The assessee thereafter filed an application under section 154 of the Act on 13.01.2025 seeking rectification of the intimation issued under section 143(1) of the Act. The assessee submitted that it h....
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....hat the assessee had exercised the option only on 01.10.2019 and, therefore, according to him, the assessee had not complied with the time requirement prescribed in Explanation 1 to section 11(1). On this reasoning, the learned CIT(A) upheld the deemed application of income of Rs. 52,90,000/-. 6. The learned CIT(A) further observed that the assessee itself did not disputed that there was a shortfall in application of 85% of its income for charitable purposes during the relevant previous year. According to the learned CIT(A), the assessee could obtain the benefit of treating such shortfall as deemed application only by strictly satisfying the conditions prescribed in Explanation 1 to section 11(1). Since the learned CIT(A) held that the a....
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....the time allowed under section 139(1) of the Act. Since the CBDT had extended the due date for filing the return for A.Y. 2019-20 from 30.09.2019 to 31.10.2019 and the assessee had filed Form No.9A as well as its return on 01.10.2019, the assessee had fulfilled the statutory requirement. As regards the amount of Rs. 9,34,116/- accumulated under section 11(1)(a) of the Act, the learned Counsel submitted that the learned CIT(A) had not given any reason whatsoever for upholding the disallowance. 10. We find merit in the submissions of the learned Counsel. Clause (2) of Explanation 1 to section 11(1) of the Act, as it stood applicable to A.Y. 2019-20, allowed a charitable or religious trust, where application of income fell short of 85%, to ....
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....see exercised the option well before the extended due date of 31.10.2019. Once the law applicable to A.Y. 2019-20 required the assessee to exercise the option before expiry of the time allowed under section 139(1) of the Act, we find no basis for denying the claim merely because Form No.9A was not furnished two months before the due date. 14. We accordingly set aside the finding of the learned CIT(A) on this issue and direct the Assessing Officer/CPC to allow the assessee's claim of Rs. 52,90,000/- as deemed application of income, subject to the other conditions of section 11 being satisfied. 15. Coming to the second component of Rs. 9,34,116/-, we find that the assessee claimed the said amount as accumulation or setting apart of ....