The Tax Publishers2019 TaxPub(DT) 7843 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 11(1)(a)

Having regard to the plain language of the provision of section 11(1)(a), it is clear that a charitable or religious trust is entitled to accumulate twenty-five per cent of its income derived from property held under trust. The donations which the assessee received, would constitute its property and it is entitled to accumulate twenty-five per cent of said income, and not the 25% of income left after application, therefore, assessee was entitled for carry forward of deficit @ 15%.

Charitable trust - Exemption under section 11 - Application of income - Income derived from property held under trust

Issue arose for consideration was that CIT (A) had erred in directing the AO to verify and allow quantum of deficit to be set off against income of the impugned assessment year. Held: Having regard to the plain language of the provision of section 11(1)(a), it is clear that a charitable or religious trust is entitled to accumulate twenty-five per cent of its income derived from property held under trust. The donations which the assessee received, would constitute its property and it is entitled to accumulate twenty-five per cent of said income and not the 25% of income left after application. Therefore, assessee was entitled for carry forward of deficit @ 15%.

Followed:CIT v. Programme for Community Organisation (2001) 248 ITR 0001 (SC) : 2001 TaxPub(DT) 0854 (SC)

REFERRED : Escorts Ltd. v. UOI & Ors. (1993) 199 ITR 43 (SC) : 1993 TaxPub(DT) 0785 (SC), Lissie Medical Institutions v. CIT (2012) 348 ITR 344 (Ker) : 2012 TaxPub(DT) 2440 (Ker-HC), CIT v. Plot Swetamber Murti Pujak Jain Mandal (1995) 211 ITR 293 (Guj) : 1995 TaxPub(DT) 0204 (Guj-HC), CIT v. Sheth Manilal Ranchhoddas Vishram Bhavan Trust (1992) 198 ITR 598 (Guj) : 1992 TaxPub(DT) 1166 (Guj-HC), Southern India Mills Association v. ITO (2017) 77 taxmann.com 36 (Chennai-Trib.), DIT v. Vile Parle Kelavani Mandal (2015) 63 taxmann.com 326 (SC)

FAVOUR : In assessee's favour

A.Y. : 2014-15

IN THE ITAT, AHMEDABAD BENCH

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