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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: HON’BLE SHRI C.N. PRASAD, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
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.
The learned first appellate authority, relying upon the decision of jurisdictional Bombay High Court rendered in CIT Vs. Institute of Banking Personnel [264 ITR 110], opined that deficit could be carry forward for setting off against income of subsequent years. Hence, Ld. AO was directed to allow the carry forward of the deficit. Aggrieved, the revenue is in further appeal before us.
Upon due consideration, we find that learned first appellate authority has merely followed the ratio of stated decision rendered by Hon’ble Bombay High Court. Not only this, the issue is also covered by the recent decisions of Hon’ble Supreme Court rendered in CIT Vs. Rajasthan & Gujarat Charitable Foundation & Others [402 ITR 441] and another decision rendered by Hon’ble Supreme Court, in revenue’s miscellaneous application titled as CIT (E) Vs. Subros Educational Society 166 DTR (SC) 257, observing as under: - 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?”
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.