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| The Tax Publishers2020 TaxPub(DT) 1666 (Bang-Trib) INCOME TAX ACT, 1961
Section 11
In case of charitable trust whose income is exempt under section 11, excess of expenditure in the earlier years can be adjusted against income of subsequent years and such adjustment would be application of income for subsequent years.
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Charitable trust - Exemption under section 11 - Allowability - Carry forward of excess application of income from earlier years for setting off against application of income in succeeding years
Assessee-trust claimed carry forward of excess application of income from earlier years for setting off against application of income in succeeding assessment years. According to AO, there was no provision for carry forward of excess expenditure of earlier year to be adjusted against income of the subsequent year and he therefore denied the claim of the assessee. Held: As per section 11(1)(a), the application for charitable purposes takes place in the year in which the income is adjusted to meet the expenses incurred for charitable or religious purposes. Hence, even if the expenses for charitable or religious purposes had been incurred in the earlier years and the said expenses were adjusted against the income of a subsequent year, the income of such subsequent year could be said to be applied for charitable or religious purposes in the year in which such adjustment took place. Accordingly, the assessee's claim of carry forward of excess application of income from earlier years for setting off against application of income in succeeding assessment years, was allowed.
REFERRED : CIT v. Maharana of Mewar Charitable Foundation 164 ITR 439 (Raj), CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal 211 ITR 293 (Guj.), CIT v. Institute of Banking Personnel Selection 264 ITR 110 (Bom), Govindu Naicker Estate v. ADIT 248 ITR 368 (Mad)
FAVOUR : In assessee's favour
A.Y. : 2014-15 & 2009-10
IN THE ITAT, BANGALORE BENCH
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