I.T.O. - (EXEMPTIONS) - 1(1), MUMBAI vs. EMPIRE FOUNDATION, MUMBAI

सुनवाई की तारीख/ : 05/12/2019 Date of Hearing घोषणा की तारीख / 05/12/2019 : Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2014-15 contest the order of Ld. Commissioner of Income- Tax (Appeals)-3, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-3/IT-10600/2017-18 dated 22/06/2018 on following grounds of appeal: - 2 Empire Foundation Assessment Year :2014-15 1.1 Whether, on the facts of the case and in law, the Ld. CIT(A) erred in allowing the claim of accumulation or setting apart of Rs.2,47,99,652/- u/s11(1)(a) of the IT. Act, 1961 being 15% of the total income of Rs.16,53,31,012/- of the assesses trust ignoring the fact that after application of income of Rs.16,12,57,930/- towards objects of the trust, only income of Rs.40,73,082/- was left unspent for accumulation? 1.2 Whether, on the facts of the case and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying on the decision of the Hon'ble ITAT, Mumbai in the case of Lalji Velji Charitable Trust Vs. ITO(E)-II(1), Mumbai in for A.Y,2010-11 and TTA No.5323/Mum/2016 for A.Y.2011-12 dated 28.02.2018 wherein the order of the Ld.CIT(A) confirming the disallowance of accumulation of 15% of the total income made by AO was set aside and allowed the appeal of the assessee ignoring the fact that on the same issue of accumulation of 15% of total income, the Hon'ble ITAT bench 'G' ,Mumbai in the case of Dawat Institute of Dawoodi Bohra Community [2008] 22 SOT 359 (Mumbai) for A.Y.2001-02 has held in a detailed judgment based on findings on judgment of Hon'ble Bombay High Court in the case of Institute of Banking Personnel Selection (2003) 264 ITR 110 (Born.) that the income can be accumulated u/s.11(1)(a) if something remained unspent but if the entire income has already been spent , the same is fully exempt from tax and there is nothing left to be accumulated? 2 The appellant prays that the order of the Commissioner of Income Tax (Appeals)-I, Mumbai be set aside and that of the Assessing Officer be restored.´

2. None appeared for assessee and no valid adjournment application has been placed in record. Keeping in view the grounds of appeal, the matter was proceeded with ex-parte qua the assessee. 3.1 Brief facts are that the assessee being registered trust u/s 12A was assessed for year under consideration u/s 143(3) on 23/11/2016 wherein the income of the assessee was determined at Rs. Nil as against deficit of Rs.207.26 Lacs clamed by the assessee in its return of income filed on 22/09/2014. 3.2 The assessee claimed carry forward of deficit / loss of Rs.207.26 Lacs which was denied, inter-alia, on the reasoning that there was no provision which allow such carry forward and further, there shall be no deficit in case of trusts since it was supposed to incur expenditure limited 3 Empire Foundation Assessment Year :2014-15 to its receipts since the trusts are not running on expectation of future profits / income.

2. 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.

3. The miscellaneous application is dismissed. Therefore, finding no infirmity in the impugned order, we dismiss the appeal.