M/S.SREE CHITRA THIRUNAL COLLEGE OF ENGINEERING,TRIVANDRUM vs. THE ACDIT(EXEMPTION), TRIVANDRUM

Per GEORGE GEORGE K.,JUDICIAL MEMBER:

This appeal, at the instance of the assessee, is directed against the order of the CIT(A), Trivandrum dated 25/01/2016. The relevant assessment year is 2007-08. 2. In its grounds of appeal, the assessee has raised three grounds. The third

ground is general in nature and no specific adjudication is required, h ence the same is rejected. The Ld. Counsel for the assessee in the course of hearing,

submitted that he is not pressing Ground No. 1, hence this ground is also dismissed as not pressed. The solitary ground which requires adjudication is Ground No. 2 which reads as follows:

“Without prejudice to the above ground, learned Commissioner of Income- tax(Appeals) should have permitted accumulation of the surplus as per clause(a) of third proviso to section 10(23c), since the appellant is eligible for such accumulation as per the approval obtained u/s. 10(23c)(vi), subsequent to the completion of the original assessment, with retrospective effect from asst. year 1999-2000.”

The assessee is a charitable institution registered u/s. 12A of the Income

Tax Act, 1961. Assessment u/s. 143(3) r.w.s. 147 of the Act was completed vide

order dated 12/03/2014 determining the taxable income at Rs.1,30,18,236/. In the re-assessment proceedings u/s. 143(3) r.w.s. 147 of the Act, the Assessing

Officer did not allow certain revenue expenditure and restricted the surplus to be carried forward to the extent claimed in the original return filed.

preferred an appeal to the first appellate authority. Before the CIT(A), it was contended that the amount of Rs.1,30,18,236/- should be allowed to be accumulated u/s. 11(2) of the Act in addition to Rs.94,38,002/- already allowed.

It was submitted before the CIT(A) for the year under consideration, that the assessee had originally claimed the amount of Rs.94,38,002/- to be accumulated

by furnishing Form No. 10 as required under Rule 17 of the I.T. Rules. It was submitted that the additional accumulation was required on account of disallowance of depreciation made by the ITAT vide its order dated 16/02/2009. It was further submitted that the assessee was granted approval u/s. 10(23C)

(vi) of the I.T. Act by the CIT’s order dated 18/08/2010 and was given

retrospective effect from the assessment year 1999-2000 onwards. It was stated

that as per clause (a) of the third proviso to section 10(23C) of the Act, the assessee was entitled to accumulation for a period of 5 years, without the permission of the Assessing Officer.

not grant accumulation of disallowed depreciation both u/s. 11(2) and also as per clause (a) of the third proviso to section 10(23C) of the Act.

for the assessee reiterated the submissions made before the CIT(A) whereas the Ld. DR relied on the findings/conclusions of the Assessing Officer and the CIT(A).

onwards. The case of the assessee is that it may be permitted to accumulate

surplus as per clause (a) of the third proviso to section 10(23C) of the Act. This plea of the assessee was rejected by the CIT(A). by observing as under:

“Another argument of the appellant that they are also entitled to accumulate the surplus u/s. 10(23C)(vi) of the Act, cannot be entertained since no such claim was made in the return originally filed and any claim made without filing the requisite audit report from the accountant as specified in section 288(2) need not be entertained.”

to the completion of the assessment made by the Assessing Officer. Therefore,

the assessee could not claim accumulation of surplus as per clause (a) of the third proviso to section 10(23C) of the Act in the original return. Since the approval has been granted with retrospective effect from assessment year 1999-

2000 onwards which covers the current Assessment Year, we are of the view, in the interest of justice and equity, this issue requires to be re-considered by the Assessing Officer. Accordingly, we restore the issue of accumulation under clause

(a) of the third proviso to section 10(23C) of the Act to the file of the Assessing

Officer. The Assessing Officer shall dispose of the matter as expeditiously as possible after giving a reasonable opportunity of hearing to the assessee. It is ordered accordingly.

Place: Kochi Dated: 24th March, 2017 GJ Copy to:

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