ITO (E) 2(3), MUMBAI vs. LALJI VELJI CHARITABLE TRUST, MUMBAI

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ITA 3214/MUM/2017Status: DisposedITAT Mumbai13 September 2017AY 2012-132 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) was correct in allowing the carry forward of the deficit as it followed a binding decision of the jurisdictional High Court. The revenue's appeal was dismissed.

What were the facts?

The assessee, a charitable trust, sought to carry forward a deficit in its income to subsequent years for setting off. The Assessing Officer rejected this claim, but the CIT(A) allowed it by following a jurisdictional High Court decision.

What were the issues?

Whether a deficit in application of income by a charitable trust can be carried forward and set off against future income, and if a CIT(A) order following a jurisdictional High Court precedent is binding on the Tribunal.

Which sections of the Income-tax Act were involved?

Section 11

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

Before: Shri B.R. Baskaran (AM)

For Respondent: Shri S.K. Bepari
Hearing: 13.9.2017Pronounced: 13.9.2017

The appeal filed by the revenue is directed against the order dated 22- 02-2017 passed by Ld CIT(A)-1, Mumbai and it relates to the assessment year 2012-13. The revenue is aggrieved by the decision of Ld CIT(A) in holding that the assessee is entitled to carry forward the deficit amount of current year and the earlier years for setting them off against income of subsequent years as application of income u/s 11 of the Act.

2.

None appeared on behalf of the assessee. However I notice that the Ld CIT(A) has followed the decision rendered by Hon’ble jurisdictional Bombay High Court rendered in the case of Institute of Banking Personnel (264 ITR 110). Hence I proceed to dispose of the appeal ex-parte, without the presence of the assessee.

3.

I heard Ld D.R and perused the record. The assessee is a public charitable trust registered with DIT(E), Mumbai u/s 12A of the Act. The assessee had applied funds in excess of its income and accordingly declared

2 Shri Lalji Velji Charitable Trust deficit of Rs.109.11 lakhs and sought to carry forward the same to the succeeding year. The assessee also claimed carry forward of deficit declared in AY 2008-09 to 2011-12. The AO rejected the same. However, the Ld CIT(A) allowed the claim of the assessee by following the decision rendered by the Hon’ble jurisdictional High Court in the case of Institute of Banking Personnel (supra). The revenue is aggrieved by the said decision.

4.

The Ld D.R submitted that the revenue has not accepted the decision rendered by the Bombay High Court in the case of Institute of Banking Personnel (supra) and it has filed appeal before Hon’ble Supreme Court. However, decision rendered by the jurisdictional High Court is binding upon all the authorities below it and hence the same is required to be followed till the time it is reversed by the higher Court. Since the Ld CIT(A) has followed the binding decision of jurisdictional High Court, I do not find any reason to interfere with his order.

5.

In the result, the appeal of the revenue is dismissed. Order has been pronounced in the Court on 13.9.2017.

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