TaxTMI 
TaxTMI 
2026 (9) TMI 1803
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....section 143(3) dated 18th March 2025. 2. The Assessee has raised following grounds of appeal before the tribunal: As regards denial of exemption under section 11(1A) of Rs. 51,18,29,565: 1. The learned Commissioner of Income Tax (Appeals) ["CIT(A)"] erred in upholding/sustaining the denial of exemption under section 11(1A) of Rs. 51,18,29,565 by the Assessing Officer ("AO") in respect of reinvestment of capital gains in a capital asset. 2. The CIT(A) was wrong in holding that investing in fixed deposits per se is not treated as application of income for charitable or religious purposes, ignoring the provisions of section 11(1A) which deems such reinvestment of capital gains as an application for charitable or r....
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....he Act. As regards taxation of income of the trust at Maximum Marginal Rate 9. Without prejudice to the above grounds, in addition and in the alternative, the CIT(A) ought to have directed the AO to compute the tax on income at slab rates instead of at the maximum marginal rate as computed by the AO. Your Appellant craves leave to add to, alter, modify or delete any of the above grounds, if and when required. The above grounds of appeal are independent of and without prejudice to one another. 3. Brief relevant facts of the case are that, the Assessee, a charitable trust, registered under section 12A of the Act, having existence of 68 years and engaged in charitable activities. The trust has furnished r....
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.... of the provisions of section 11(1A) of the Act. Apart from that assessee has also claimed Rs. 1,28,479/- as an application of income for write off of irrecoverable TDS. The assessing officer not accepted the investment in FD with bank as an application of income used for purchase of new capital assets, hence, the claim of exemption u/s 11(1A) for Rs. 51,18,29,565/- disallowed. Further, claim of write off of TDS Rs. 1,28,426/- against application of income disallowed being not constituted application for charitable objectives of the trust. 6. The Assessee, being aggrieved by the assessment order, filed an appeal before the Ld. Commissioner Income Tax (Appeals), challenging disallowances and contented that re-investment of Rs. 51.20 crore....
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....nt made in fixed deposits into bank account. That investment has been qualified for exemption against application of income for acquiring another capital asset. The assessee contended that mandate of section 11(1A) for investment in "Another Capital Asset" read with CBDT Instruction Number 883, makes it crystal clear that investment in Fixed Deposit with Bank for exceeding six month qualifies for application of income, exemption u/s 11(1A) of the Act. There is no requirement of furnishing of Form-10 before the assessing officer in the present case, as it has never claimed that net surplus sale consideration is carried forward for application in next specified time period. Rather, the net consideration has already applied for charitable purp....
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..... Per contra, learned DR vehemently relied upon order of lower authority. 12. We have considered the rival submissions, perused the material placed on record, CBDT instructions and relied upon judgments, and observed that for claiming an exemption under section 11(1A) against the capital gains income, assessee needs to make investment in the new capital assets. The expression of term "Another Capital Asset" is widened by the CBDT through clause 2 of Instruction No. 883 dated 24-09-1975, by including the fixed deposit investments for more than 6 month time period. In the instant case, it is an undisputed fact that investment of Rs. 51.20 cr in fixed deposits with HDFC bank have been made by exceeding six months period. 13. The Assessee....
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....instructions widening the meaning of "Another Capital Asset" provided in section 11(1A) by incorporating investment in fixed deposits with the bank. Assessee's investment made in fixed deposit of Rs. 51,20,00,000/- with HDFC bank Limited, being capital asset held for charitable objectives, thus, qualify for exemption u/s 11(1A) of the Act. The findings of Ld. CIT(A) about harmonious reading of section 11(1A) and CBDT Instruction and requirement of furnishing of Form-10 with the assessing officer and subsequently has to acquire new capital asset did not found tenable. As, the investment have already been done in new capital assets, as per CBDT Instructions (supra), consequently, there is no requirement of furnishing Form-10 to assessing offi....