JANMABHOOMI PATRO RAHAT NIDHI ,MUMBAI vs. INCOME TAX OFFICER EXEMPTION WARD 1(4), MUMBAI

Brief facts of the case are that the assessee trust is registered u/s. 12A of the Act and is also registered with the Charity Commissioner, Mumbai under the Maharashtra Public Trust Act, 1950, which was constituted with the object of providing medical relief, advancement of education and advancement of other objects of general public utility for poor without any activity for profit. The assessee trust filed its return of income dated 09.11.2023, declaring total income at Rs. 21,00,147/- after claiming exemption u/s. 11 of the Act and the same was processed u/s. 143(1) of the Act. The assessee vide email communication dated 29.11.2024, received an intimation passed u/s. 143(1)(a) of the Act, where the adjustment to the total income aggregating to Rs. 1 Crore was proposed and the assessee was given 30 days time to respond to the same. The ld. CPC/AO vide intimation dated 23.12.2024 passed u/s. 143(1) of the Act, where addition/disallowance amounting to Rs. 1 crore was made to the total income of the assessee on the accumulation made u/s. 11(2) of the Act for A.Y. 2017-18 which was taxed in the A.Y. 2023-24 i.e., for the year under consideration by complying with the amendment to the provision of Section 11(3) vide Finance Act, 2022, thereby, determining total income at Rs. 121,00,150/-. 4. Aggrieved by the said order, the assessee was in appeal before the first appellate authority challenging the intimation passed by the ld. CPC u/s. 143(1) of the Act. 5. The ld. CIT(A) vide order dated 27.03.2025 upheld the addition/disallowance made by the CPC. 6. The assessee is in appeal before us, challenging the order of the ld. CIT(A). Janmabhoomi Patro Rahat Nidhi

The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the accumulation claimed by the assessee u/s. 11(2) of the Act amounting to Rs. 1 Crore was for A.Y. 2017-18 relevant to F.Y. 2016-17 and Rs. 95,21,493/- for A.Y. 2018-19 relevant to F.Y. 2017-18. The ld. AR further contended that the CPC as well as the first appellate authority has added Rs. 1 Crore to the total income of the assessee by relying on the amendment to Section 11(2) of the Act which has restricted the accumulation for 5 years as against the earlier provisions which was for 5 years plus one more year totaling to 6 years, where the assessee was to utilize the accumulation for the objects of the trust within the said period. The ld. AR further contended that the amendment to Section 11(3) of the Act was w.e.f. 01.04.2024 relevant to A.Y. 2023-24 which the assessee has not anticipated on the first year of accumulation which was for A.Y. 2017-18. The ld. AR further stated that the unspent accumulation, even otherwise, cannot be taxed for A.Y. 2023-24 as it is the 6th year in which the unspent accumulation is to be taxed. Tdhe ld. AR submitted that the assessee has for A.Y. 2018-19 spent Rs. 74,21,346/- towards the object of the trust and had duly offered the remaining Rs. 21,00,147/- to tax. The ld. AR relied on the decision of the Tribunal in the case of Yashwantrao Chavan, Maharashtra Open University vs. CIT, Exemption, ITA No. 505/PUN/2025, dated 23.06.2025, Shri Krishnanagar Vaishnvsamaj vs. Income Tax Officer (Exemption), ITA No. 1096/Ahd/2025, dated 03.07.2025 and also the decision of the Hon'ble Apex Court in the case of [2014] 49 taxmann.com 249 (SC), Commissioner of Income Tax (Central)-I, New Delhi vs. Vatika Township Pvt. Ltd., dated 15.09.2014 along with the memorandum explaining the provision in the Finance Janmabhoomi Patro Rahat Nidhi

From the above submission, we find justification in the argument of the ld. AR for the assessee contending that the assessee has utilized the accumulated fund during the stipulated time. More so, as per the amendment provision of Section 11(3) of the Act the assessee had offered the remaining amount to tax. Further, the issue of utilization of accumulated income prior and post the amendment to Section 11(3) of the Act is also no longer res integra where the coordinate benches have decided this issue in favour of the assessee by holding that the amendment is prospective in nature which pertains to only fresh accumulation for the previous year starting from 01.04.2022 onwards. The ld. AR had relied on the following decisions of the coordinate benches which are cited herein under. a. Dadar Digamber Jain Mumukshu Mandal vs. CIT(E) [(2025) 176 taxmann.com 661 (ITAT, Mumbai)] b. ITO(E)-1(1), Mumbai vs. Basilica of Our Lady of the Mount (in ITA No. 2927/Mum/2025, order dated 14th August, 2025) c. Himalayan Buddhist Cultural Association vs. ITO New Delhi (in ITA No. 2299/Del/2025, order dated 03 June, 2025). 11. On perusal of the said decision, it is observed that in the case of Dadar Digamber Jain Mumukshu Mandal (supra) the juri ictional coordinate bench has held that the amendment to Section 11 as well as 10(23C) of the Act pertains to accumulation of income pertaining to relevant A.Y. 2023-24 and subsequent assessment years as the Janmabhoomi Patro Rahat Nidhi same is applicable prospectively as referred to fresh accumulation and not with respect to the existing accumulation which would continue to be governed by the erstwhile provisions. By respectfully following the above said decision, we deem it fit allow ground no. 3 and 4 raised by the assessee. 12. As there was no arguments enhanced for ground no. 1 by both sides the same is rendered academic in nature. The ld. AR for the assessee stated at the bar that ground no.2 is not pressed and therefore no separate adjudication is required for the same. 13. In the result, the appeal filed by the assessee is hereby allowed. Order pronounced in the open court on 29.09.2025 (OM PRAKASH KANT) JUDICIAL MEMBER

The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,