MESHRI MAHAJAN VANDA,BHAVNAGAR vs. THE ITO (EXEMP), BHAVNAGAR

ITA 1261/AHD/2025Status: DisposedITAT Ahmedabad02 September 2025AY 2023-248 pages
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What did the Tribunal hold?

The Tribunal held that the amendment to Section 11(3) by the Finance Act, 2022, is prospective and does not apply to accumulations made prior to its effective date. Therefore, the assessee was entitled to utilize the accumulated income in the year immediately following the five-year period.

What were the facts?

The assessee trust accumulated income in FY 2016-17 under Section 11(2). The CPC treated an amount utilized in FY 2022-23 as deemed income under Section 11(3) due to an amendment by the Finance Act, 2022, which removed the additional year for utilization. The assessee argued the amendment was prospective.

What were the issues?

Whether the amendment to Section 11(3) by the Finance Act, 2022, removing the additional year for utilization of accumulated income, applies retrospectively to prior accumulations. Whether the utilization in the year immediately following the expiry of the five-year period is permissible.

Which sections of the Income-tax Act were involved?

Section 11(2),Section 11(3),Section 115BBI

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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Mehul Thakkar, AR
For Respondent: Shri Prateek Sharma, Sr. DR
Pronounced: 02.09.2025

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), ADDL/JCIT(A)-6, Mumbai vide order dated 31.03.2025 passed for A.Y. 2023-24. 2. The assessee has raised the following grounds of appeal:

“1. The Ld. ADDL/JCIT (A)-6, Mumbai has erred in law and on facts in confirming the action of Ld. AO-CPC refusing to consider the utilization of Rs. 1,58,301 for specified purpose in the FY 2022-23 out of the income accumulated in the FY 2016-17 U/s 11(2) of Income Tax Act.

2.

Without prejudice to the above, order confirming

The order continues below.

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