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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SHRI RAJPAL YADAV & SHRI PRADIP KUMAR KEDIA
आदेश/O R D E R
PER PRADIP KUMAR KEDIA - AM:
The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of Income Tax (Appeals)-9, Ahmedabad (‘CIT(A)’ in short), dated 03.07.2018 arising in the assessment order dated 31.10.2017 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2015-16.
(ACIT(Exemp.) vs. Blind People’s Association India) A.Y. 2015-16 - 2 - 2. The ground of appeal raised by Revenue reads hereunder:
“1. Whether the facts and in law the Ld. CIT(A) was justified in allowing the carry forward of deficit which has arisen due to claim of deemed application of income u/s 11(1)(a) of the Act and, not on real application of income for the objects of the trust?”
When the matter was called for hearing, the learned AR for the assessee submitted that the issue is covered in favour of the assessee in DCIT vs. Shree Bhartimaiya Memorial Foundation order dated 29.05.2019.
As stated on behalf of the assessee, identical issue has been arisen in (supra) and the co-ordinate bench of Tribunal after considering rival submissions, has adjudicated the issue in favour of assessee and against the Revenue. The relevant operative para of the order of the Tribunal in ITA No. 2619/Ahd/2017 (supra) reads as under:
“7. We have carefully considered the rival submissions. The solitary question that arises for adjudication whether the trust has incurred deficit due to excess spending on the object of the trust during the particular year and whether excess expenditure incurred in earlier years by the trust could be allowed to be set off against the income of subsequent year by invoking Section 11 of the Act. The issue is no longer res integra. The Hon’ble Gujarat High Court in CIT vs. Shri Plot Shwetamber Murti Pujak Jain Mandal (1995) 211 ITR 0293 (Guj) has rendered decision favourable to the assessee on the very issue. The Hon’ble Gujarat High Court has held that there is nothing in the language of Section 11(1)(a) of the Act to indicate that the income from trust property should have been applied for charitable or religious trusts only in the year in which such income has arisen. The expenditure incurred in the earlier year can be met out of the income of the subsequent year and utilization of such income for meeting the expenditure of the earlier year would amount to such income being applied for charitable or religious trusts. The Hon’ble Gujarat High Court further held that income derived from Trust property has to be computed on commercial principles and consequently deficit arising out of expenditure over income for the previous year should, therefore, be set off against surplus of income over expenditure relating to the subsequent year. Similar view has been expressed in CIT vs. Maharana of Mewar Charitable Foundation (1987) 164 ITR 439 (Raj) and CIT vs. Matriseva Trust (2000) 242 ITR 20 (Mad). Whatever little controversy might be existing has been put to rest by the recent decision of the (ACIT(Exemp.) vs. Blind People’s Association India) A.Y. 2015-16 - 3 - Hon’ble Supreme Court in the case of CIT(Exemption) vs. Subros Education Society (2018) 303 CTR 1 (SC). Hence, the CIT(A) in our view has correctly applied the law as evolved by the judicial precedents. In the absence of any infirmity in the order of the CIT(A), we decline to interfere therewith.”
In consonance with the view already taken in (supra), we decline to interfere with the order of the CIT(A).
In the result, the appeal of the Revenue is dismissed.
This Order pronounced on 04/03/2021
Sd/- Sd/- (RAJPAL YADAV) (PRADIP KUMAR KEDIA) VICE PRESIDENT ACCOUNTANT MEMBER Ahmedabad: Dated 04/03/2021 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।