INCOME TAX ACT, 1961

Section 11

Charitable trust - Exemption under section 11 - Surplus accumulated was not applied for charitable purposes -

The only issue that arose for consideration in this appeal as to whether revenue authorities were justified in bringing to tax a sum on the ground that the said sum which was surplus and allowed to be accumulated in assessment year 2008-09 had not been applied for charitable purposes within a period of 5 years, as contemplated under section 11(3)(c). Held: A reading of clause (c) of section 11(3) would show that the time allowed for applying accumulation for charitable purpose is 5 year and one year following the expiry of 5 years. Assessee filed copy of the order of assessment for assessment year 2014-15 wherein AO had accepted the utilization of accumulated surplus in assessment year 2008-09 for charitable purpose in assessment year 2014-15. Assessee drew attention to the fact that he had spent a sum and to this extent, application of income for charitable purposes was accepted by AO in assessment year 2014-15 in the order of assessment. Since this aspect was not examined either by AO or by CIT(A), therefore, matter was remanded back to AO for fresh consideration in the light of order of assessment for assessment year 2014-15.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2013-14

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