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Income Tax Appellate Tribunal, DELHI BENCHES (CAMP AT MEERUT
Before: SHRI N.S. SAINI & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER : The appellant, Shri Shiv Venkateshwar Educational and Social Welfare Trust (hereinafter referred to as ‘the Assessee’) by filing the present appeal, sought to set aside the impugned order dated 13.02.2017 passed by Ld. CIT (Appeals), Aligarh qua the Assessment Year 2012-13 on the grounds inter alia that :-
“1. That the ld. Commissioner of Income Tax (Appeals) has erred in not allowing the claim of the assessee on account of carry forward of loss emanating from surplus application of funds. He has failed to observe judicial discipline in terms of brushing aside case laws of various courts cited before him.
2. The Ld. Commissioner of Income Tax (Appeals) has erred in holding that the issue of carry forward of loss of Rs.(-) 1,22,19,945/- emanating from surplus application of funds is not relevant to the year under consideration since the assessee has not claimed the losses to be set off against the income of the impugned year and only claimed them to be carried forward. To this extent, his order is erroneous and prejudicial to the interest of the assessee.”
Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee being a Trust registered u/s 12AA of the Income-tax Act, 1961 (for short ‘the Act’) has been accorded registration under section 12A of the Act. In the return of income filed on 28.09.2012, assessee declared nil income. AO has not allowed the carry forward and set off of losses as claimed by the assessee on the ground that the losses in question are not the losses as required u/s 72 of the Act, the losses being claimed by the assessee are essential in the nature of excess application of fund during the year under assessment.
Assessee carried the matter by way of an appeal before the ld. CIT (A) who has dismissed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
The ld. CIT (A) has declined to decide the issue in controversy on the ground that since no such issues are involved in the relevant year as, during the year under assessment, application of income is more than the actual income and this controversy is relevant in the year when the assessee has set off of the excess amount applied, this issue need not be decided.
However, we are of the considered view that the claim of the assessee to carry forward losses emanating from surplus application of fund is required to be set off against the income of the impugned year, as the identical issue has been decided by the Hon’ble Apex Court in the case cited as CIT (E) vs. Subros Educational Society – (2018) 303 CTR 0001 (SC) by dismissing the Misc. Application No.941/2018 in Civil Appeal no.5171/2016 filed by the Revenue by returning following findings :-
“1. In this application filed by the Income Tax Department it is stated that Civil Appeal No.5171 of 2016 arises out of Special Leave petition (c)..CC No.8982/2016 was tagged with other appeals and the batch matters were decided by this Court on 13.12.2017. However, the following question was also raised in the instant appeal which was not the subject matter of those appeals : (a) Whether any excess expenditure incurred by the trust/ charitable institution in earlier assessment year could be allowed to be set off against income of subsequent years by invoking Section 11 of the Income Tax Act, 1961?”
To this extent, Mr. K. Radhakrishnan, learned senior counsel appearing on behalf of the applicant / appellant is correct. Therefore, we have heard him on the aforesaid question of law as well but did not find any merit therein. The miscellaneous application is dismissed.” 7. So, following the decision rendered by the Hon’ble apex Court in case cited as CIT (E) vs. Subros Educational Society, we are of the considered view that the assessee is allowed for relief sought for and AO is directed to allow the claim of the assessee for carry forward losses emanating from surplus application of funds against the current year and the remaining amount to be set off against the next year’s income. Consequently, the appeal filed by the assessee is hereby allowed. Order pronounced in open court on this 16th day of January, 2019.