The ITO, (Exemptions), Ward-2, Ahmedabad V. Utthan Seva Sansthan, Ahmedabad

ITA 2017/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6083 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 02-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: PRAMOD B KEDIA
• Keywords: Charitable institution
• Section: 143(3); 11

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE JUSTICE SHRI P. P. BHATT, PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 2017/AHD/2016 ( ASSESSMENT YEAR : 2012-13) INCOME TAX OFFICER (EXEMPTIONS) WARD 2, AHMEDABAD / VS. UTTHAN SEWA SANSTHAN 26, SURDHARA BUNGLOWS, OPP. TV TOWER, NEAR GOYAL INTERCITY, THALTEJ, AHMEDABAD-380054 ./ ./ PAN/GIR NO. : AAATU0363J ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI LALIT P. JAIN, SR. D.R. / RESPONDENT BY : SHRI PRAMOD B. KEDIA, CA DATE OF HEARING 11/01/2019 !'# / DATE OF PRONOUNCEMENT 24/01/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)-9, AHMEDABAD (CIT(A) IN SHORT), DATED 1 5.06.2016 ARISING IN THE ASSESSMENT ORDER DATED 06.03.2015 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMENT YEAR 2012-13. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: ITA NO. 2017/AHD/16 [ITO(EXEMP.) VS. UTTHAN SEWA SANSTHAN] AY 2012-13 - 2 - (I) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) H AS ERRED IN LAW AND ON FACTS IN ALLOWING THE ASSESSEES CLAIM O F 15% ACCUMULATION OF INCOME U/S.11(1)(A) OF THE I.T. ACT , ALTHOUGH THERE WAS NO INCOME LEFT AFTER ALLOWING VARIOUS EXP ENSES INCURRED FOR THE OBJECT OF THE TRUST. (II) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) H AS ERRED IN LAW AND ON FACTS IN HOLDING THAT EXEMPTION AVAILABL E U/S.11(1)(A) I.E. 15% OF INCOME IS UNFETTERED AND T O BE GIVEN EVEN WHEN NO INCOME IS AVAILABLE. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE IDENTIC AL ISSUE HAS CROPPED UP IN AY 2010-11 IN ASSESSEES OWN CASE AND ADJUDIC ATED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE LEARNED A R THUS SUBMITTED THAT THE ISSUE IS NO LONGER RES INTEGRA IN THE LIGHT OF THE DECISION OF THE CO-ORDINATE BENCH IN ITS OWN CASE IN ITA NO.220 8/AHD/2013 ORDER DATED 29.09.2015. 4. LEARNED DR RELIED UPON THE ORDER OF THE AO BUT C OULD NOT CONTROVERT THE ASSERTIONS MADE ON BEHALF OF THE ASS ESSEE FOR THE ISSUE ALREADY COVERED IN FAVOUR OF THE ASSESSEE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE ASSESSEE TRUST FILED THE RETURN OF INCOME DECLARING DEFICIT (EXCESS EXPENDITURE INCURRED OVER INCOME) TO THE EXTENT OF RS.1,52,31,341/-. THE AO HOWEVER DENIED ENTITLEMENT TOWARDS GENERAL A CCUMULATIONS TO THE EXTENT OF 15% CONTEMPLATED UNDER S.11(1)(A) OF THE ACT AS THE AMOUNT APPLIED FOR THE OBJECT OF TRUST (RS.7,99,18, 102) ALREADY SURPASSED INCOME DERIVED FROM PROPERTY HELD UNDER T RUST. THE DEFICIT WAS THUS RESTRICTED TO RS.38,16,030/- BY THE AO. 6. THE RELEVANT FACTS AS PRESENTED BY THE ASSESSEE IN THE STATEMENT OF FACTS PLACED BEFORE THE CIT(A) ARE NOTICED HEREU NDER: 3. THE RELEVANT PORTION OF THE WRITTEN SUBMISSION DATED 23-02- 2015 IS REPRODUCED BELOW ITA NO. 2017/AHD/16 [ITO(EXEMP.) VS. UTTHAN SEWA SANSTHAN] AY 2012-13 - 3 - FURTHER TO OUR EARLIER WRITTEN SUBMISSION DATED 30/ 01/2015 AND 20/02/2015, WE MOST RESPECTFULLY SUBMIT THE FOLLOWI NG INFORMATION / EXPLANATIONS CALLED FOR DURING THE COURSE OF ASSESS MENT PROCEEDINGS HELD ON 20/02/2015 SIR, YOUR HONOUR HAS SOUGHT EXPLANATION AS TO WHY T HE GENERAL ACCUMULATION OF 15% U/S 11(1)(A) BE NOT RESTRICTED TO THE EXTENT OF INCOME NOT UTILIZED FOR THE OBJECTS OF THE TRUST. SIR, IN THIS CONNECTION, IT IS MOST RESPECT FULLY S UBMITTED - (I) THAT THE TRUST HAS BEEN ADVISED THAT TWO INDEPE NDENT ITEMS ARE COVERED IN THE SCOPE OF SECTION 11 (1)(A)- (A) ACTUAL AMOUNT APPLIED FOR THE OBJECTS OF THE TR UST (RS. 7,99,18,102) AND (B) GENERAL ACCUMULATION OF NOT MORE THAN 15% OF THE INCOME (RS. 1,14,15,311 BEING 15% OF RS. 7,61,02,07 2); (II) THAT FROM THE PLAIN LANGUAGE OF THE PROVISIONS OF SECTION 11(1)(A) IT WOULD BE CLEAR THAT : THE INCOME THAT I S NOT TO BE INCLUDED FOR THE PURPOSE OF COMPUTING THE TOTAL INC OME WOULD BE THE AMOUNT APPLIED FOR CHARITABLE / RELIGIOUS PU RPOSE AND 15 PER CENT OF THE TOTAL RECEIPTS (NET OF CORPUS DO NATION) WHICH IS ALLOWED TO BE CARRIED FORWARD. ACCORDINGLY, THE ASSESSES IS OF THE VIEW THAT SINCE THE TOTAL RECEIPTS (NET OF C ORPUS DONATION) ARE RS.7,61,02,072/-, IN ACCORDANCE WITH THE STATUTORY PROVISIONS OF SECTION 11(1)(A), 15 PER CE NT THEREOF IS NOT TO BE TREATED AS THE INCOME OF THE TRUST AND IT IS ONLY AFTER DEDUCTING SUCH 15 PER CENT (RS.1,14,15,311) ONE HAS TO PROCEED FURTHER TO DETERMINE THE TOTAL TAXABLE INCO ME AND DEDUCT RS.7,99,18,102/- BEING THE AMOUNT APPLIED TO CHARITABLE / RELIGIOUS PURPOSE. THE ASSESSEE HAS, THEREFORE, F ILED THE RETURN OF INCOME AS PER THIS CONTENTION AND AS PER THE STATEMENT OF COMPUTATION ATTACHED WITH THE ITR, THE TRUST HAS RETURNED AN EXCESS EXPENDITURE OF CURRENT YEAR OF R S. 1,52,31,341/-. (III) THAT THERE IS NOTHING IN THE LANGUAGE EMPLOYE D IN SECTION 11(1)(A) WHICH RESTRICTS THE GENERAL ACCUMULATION U /S 11(1)(A) TO A LOWER AMOUNT. (IV) THAT THE COURTS (INCLUDING HON. SUPREME COURT) HAVE HELD THAT GENERAL ACCUMULATION OF 15% U/S 11(1)(A) IS UNFETTE RED AND NOT SUBJECT TO ANY CONDITIONS (V) THAT IN THE ASSESSEE'S OWN CASE, FOR AY: 2010-1 1, THE HON. CIT(A) HAS HELD THAT THE A.O. WAS NOT JUSTIFIED IN DENYING THE CLAIM OF 15% U/S 11(1)(A); IT IS MOST RESPECTFULLY SUBMITTED THAT THE ASSESSEE -TRUST IS A LAW ABIDING PERSON ENGAGED IN EDUCATIONAL ACTIVITIES AN D WOULD LIKE TO ADHERE TO THE PROVISIONS OF THE LAW AS ELUCIDATED B Y THE AVAILABLE JUDICIAL RULINGS. HOWEVER, WITHOUT PREJUDICE TO WHA T IS STATED ABOVE, IF IT WERE TO BE INTERPRETED THAT ACCUMULATION U/S 11(1)(A) WERE TO BE RESTRICTED TO THE EXTENT OF INCOME NOT UTILIZED FOR THE OBJECTS OF THE TRUST, THEN THE COMPUTATION WOULD BE AS UNDER ITA NO. 2017/AHD/16 [ITO(EXEMP.) VS. UTTHAN SEWA SANSTHAN] AY 2012-13 - 4 - GROSS INCOME INCLUDING DONATION TO CORPUS 7,72,02 ,072 LESS: EXEMPTED U/S 11(1)(D) - DONATION TO CORPUS -11,00,000 GROSS INCOME AFTER DEDUCTING THE DONATION TO CORPUS 7,61,02,072 LESS: AMOUNT APPLIED FOR THE OBJECTS OF THE TRUST -ON EDUCATIONAL OBJECT - REVENUE EXP AS PER I & E A/C (6,90,33,010 LESS: LOSS ON SALE OF ASSETS RS. 15,44 5) 6,90,17,565 -ON EDUCATIONAL OBJECT - CAPITAL EXP AS PER FIX ED ASSET SCHEDULE (ADDITION RS.1,53,80,156 LESS SALE RS.44,7 9,619) 1,09,00,537 -7,99,18,102 -38,16,030 LESS: U/S 11(1)(A): @ 15% OF GROSS INCOME OF RS. 7, 61,02,072 = RS. 1,14,15,311 BUT RESTRICTED TO...... NIL TOTAL INCOME -38,16,030 7. AS NOTED EARLIER, THE AO DENIED THE RELIEF CLAIM ED UNDER S.11(1)(A) OF THE ACT BEING 15% OF THE GROSS RECEIP T AMOUNTING TO RS.1,14,15,311/- AND REDUCED THE TOTAL DEFICIT TO R S.38,16,030/- AGAINST THE CLAIM OF DEFICIT OF RS.1,52,31,341/-. 8. IN THE FIRST APPEAL, THE CIT(A) HOWEVER FOUND ME RIT IN THE CASE OF ASSESSEE AND HELD THAT THE ASSESSEE IS CORRECTLY APPLIED THE PROVISIONS OF SECTION 11(1)(A) OF THE ACT AND THE A O WAS NOT JUSTIFIED IN DENYING 15% OF INCOME OUT OF RECEIPT DURING THE YEAR FOR ACCUMULATION. FOR THE SAKE OF READY REFERENCE, THE RELEVANT OPERATIVE PARAS OF THE ORDER OF THE CIT(A) IS REPRODUCED HERE UNDER: 4.3 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE APPELLANT AND THE OBSERVATIONS OF THE A.O. IT IS OBSERVED TH AT THE A.O HAS RESTRICTED THE EXCESS EXPENDITURE INCURRED FOR THE YEAR UNDER CONSIDERATION (-) RS.38,16,030/- AS AGAINST (-) RS. 1,52,31,341/- AS DECLARED IN THE RETURN OF INCOME. THE APPELLANT IS AGGRIEVED BY THE WRONG APPLICATION OF SEC-11(1)(A) OF THE ACT BY THE A.O. ACCORDING TO APPELLANT THE TOTAL RECEIPTS DURING THE YEAR INCLUDING THE CORPUS DONATION IS RS.7,72,02,072/-. OUT OF THIS, AN AMOUN T OF RS.11,00,000/- WAS RECEIVED AS CORPUS WHICH IS EXEM PTED U/S.11(1)(D) OF THE ACT, LEAVING BEHIND INCOM E OF RS.7,61,02,072/-. ON THIS INCOME FROM THE PROPERTY HELD UNDER THE TRUST THE APPELLANT CLAIMED 15% FOR THE PURPOSE OF ACCUMULATION U/S.11(1)(A) OF THE ACT AMOUNTING TO RS. 1,14,15,31 1/-. OUT OF THE REMAINING AMOUNT OF RS. 6,46,86,761/- THE APPELLANT HAD APPLIED RS.7,99,18,1027- TOWARDS THE OBJECTS OF THE TRUST R ESULTING INTO THE DEFICIT OF (-) RS.1,52,31,341/-. IN MY CONSIDERED O PINION THE APPELLANT HAS CORRECTLY APPLIED THE PROVISION OF SE C.11(1)(A)AND A.O WAS NOT JUSTIFIED IN DENYING 15% OF INCOME OUT OF T HE RECEIPTS DURING THE YEAR FOR ACCUMULATION. THUS, THE A.O IS DIRECT ED TO REDUCE RS.1,14,15,311/- AS 15% OF AMOUNT U/S.11(1)(A) OF T HE ACT AND ITA NO. 2017/AHD/16 [ITO(EXEMP.) VS. UTTHAN SEWA SANSTHAN] AY 2012-13 - 5 - THEREAFTER REDUCE THE AMOUNT APPLIED FOR THE OBJECT S OF THE TRUST. THUS, GROUND OF APPEAL NO.1 IS ALLOWED. 5. GROUND NO.2 RAISED BY THE APPELLANT IS AGAINST N OT ALLOWING THE CARRY FORWARD OF EXCESS EXPENSES FOR SET OFF IN THE SUBSEQUENT YEAR BY THE A.O. 5.1 ON THIS ISSUE THE APPELLANT DURING THE APPELLAT E PROCEEDINGS SUBMITTED AS UNDER :- 'THE GROUND - 2 RELATES TO WHETHER THE ASSESSES IS ENTITLED TO THE CARRY FORWARD OF THE EXCESS EXPENSES FOR SET OF F IN THE SUBSEQUENT YEAR OR NOT. YOUR HONOUR, IT IS THE WELL-SETTLED POSITION THAT I NCOME DERIVED FROM THE TRUST PROPERTY HAS TO BE DETERMINED ON COM MERCIAL PRINCIPLES AND IF COMMERCIAL PRINCIPLES FOR DETERMI NING THE INCOME ARE APPLIED, IT IS BUT NATURAL THAT THE ADJU STMENT OF THE EXPENSES INCURRED BY THE TRUST FOR CHARITABLE AND R ELIGIOUS PURPOSES IN THE EARLIER YEAR AGAINST INCOME EARNED BY THE TRUST IN THE SUBSEQUENT YEAR WILL HAVE TO BE REGARDED AS APPLICATION OF INCOME OF THE TRUST FOR CHARITABLE AND RELIGIOUS PURPOSES IN THE SUBSEQUENT YEAR HAVING REGARD TO THE BENEVOLENT PROVISIONS CONTAINED IN SECTION 11 OF THE ACT AND WILL HAVE TO BE EXCLUDED FROM THE INCOME OF THE TRUST UNDER SECTION 11(1)(A) OF THE ACT IN THAT SUBSEQUENT YEAR. ACCORDINGLY, THE DEFICIT / NEGATIVE INCOME DETERMINED IN YEAR- 1 WILL BE CARRIED FORWAR D FOR SET OFF AGAINST THE INCOME OF THE YEAR - 2 AND SO ON. A CCORDINGLY, IN THIS CASE, THE APPELLANT IS ENTITLED TO CARRY FO RWARD THE NEGATIVE INCOME DETERMINED FOR AY: 2012-1301 TO THE SUBSEQUENT YEAR(S). THE MATTER IS SQUARELY COVERED BY THE JUDGMENT OF T HE HON. MADRAS HIGH COURT IN THE CASE OF CIT V/S MAITRISEVA TRUST [242 ITR 20 (MAD) AS WELL AS THE JUDGMENT OF THE HO N. GUJARAT HIGH COURT (JURISDICTIONAL HIGH COURT) IN THE CASE OF CIT V. SHRI PLOI SWETAMBER MURTI PUJAK JAIN MANDAL [1995] 211 ITR 293 (GUJ.). IN THIS CASE THE HON. COURT WAS CONSIDE RING THE FOLLOWING QUESTION 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSEE IS ENTITLED TO THE CARRY TON-SARD OF T HE EXPENSES FOR SET OFF IN THE SUBSEQUENT YEAR?' THE HON. COURT RULED AS UNDER .. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE OPIN ION THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSEE IS ENTITLED TO CARRY FORWARD EXPENSES FOR SET OFF IN T HE SUBSEQUENT YEAR. THE QUESTION REFERRED TO US IS, THEREFORE, AN SWERED IN THE ITA NO. 2017/AHD/16 [ITO(EXEMP.) VS. UTTHAN SEWA SANSTHAN] AY 2012-13 - 6 - AFFIRMATIVE, I.E., IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE.' THE PHOTOCOPY OF THE SAID JUDGMENT OF HON. GUJARAT HC IS ATTACHED HEREWITH. THE APPELLANT THEREFORE MOST HUMBLY PRAYS THAT THIS GROUND OF APPEAL MAY PLEASE BE ALLOWED.' 5.2 IT IS OBSERVED THAT THE A.O HAS NOT ALLOWED THE CARRY FORWARD OF DEFICIT OF THE APPELLANT AMOUNTING TO RS. 1,52,3 1,351/- BEING THE EXCESS APPLICATION OVER INCOME AND ELIGIBLE FOR SET OFF IN THE FUTURE YEARS. THE APPELLANT HAS RELIED UPON THE ORDER OF J URISDICTIONAL HIGH COURT IN THE CASE OF CIT VS SHRI PLOT SHWETAMBAR MU RTIPUJAK JAIN MANDAL 211 ITR 293(GUJ.), CIT VS MAHARANA OF MEWAR CHARITABLE FOUNDATION 29 TAXMAN 476 (RAJ) AND GOVINDU NAICKER ESTATE V. ASSTT.DIT [2001] 248 ITR 368 (MAD). HON'BLE GUJARAT HIGH COURT IN THE CASE OF SHRI PLOT SHWETAMBAR MURTIPUJAK JAIN MA NDAL HAS HELD AS FOLLOWS :- 'A BARE PERUSAL OF SECTION 11 OF THE INCOME-TAX ACT , 1961, SHOWS THAT THE INCOME DERIVED FROM PROPERTY HELD UN DER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN IN DIA IS TO BE EXCLUDED FOR THE PURPOSES OF COMPUTING THE INCOME O F THE TRUST FOR THE PURPOSE OF ASSESSMENT. THERE ARE NO WORDS O F LIMITATION IN THIS SECTION PROVIDING THAT THE INCOME SHOULD HA VE BEEN APPLIED FOR CHARITABLE OR RELIGIOUS PURPOSES ONLY I N THE YEAR IN WHICH THE INCOME HAD ARISEN. THE WORD 'APPLY' MEANS 'TO PUT TO USE' OR 'TO TURN TO USE' OR 'TO MAKE USE' OR 'TO PUT T PRACTICAL USE'. HAVING REGARD THE PROVISIONS OF SEC TION 11 OF THE ACT, IT IS CLEAR THAT WHEN THE INCOME OF A TRUS T IS USED OR PUT TO USE TO MEET THE EXPENSES INCURRED FOR RELIGI OUS OR CHARITABLE PURPOSES, IT IS APPLIED FOR CHARITABLE O R RELIGIOUS PURPOSES. THE APPLICATION OF THE INCOME FOR CHARITA BLE OR RELIGIOUS PURPOSES TAKES PLACE IN THE YEAR IN WHICH THE INCOME IS ADJUSTED TO MEET THE EXPENSES INCURRED FOR CHARI TABLE OR RELIGIOUS PURPOSES. IN OTHER WORDS, EVEN IF EXPENSE S FOR CHARITABLE AND RELIGIOUS PURPOSES HAVE BEEN INCURRE D FOR THE EARLIER YEAR AND THE SAID EXPENSES ARE ADJUSTED AGA INST THE INCOME OF A SUBSEQUENT YEAR, THE INCOME OF THAT YEA R CAN BE SAID TO HAVE BEEN APPLIED FOR CHARITABLE AND RELIGI OUS PURPOSES IN THE YEAR IN WHICH THE EXPENSES INCURRED FOR CHARITABLE AND RELIGIOUS PURPOSES HAD BEEN ADJUSTED . THERE IS NOTHING IN THE LANGUAGE OF SECTION 11(1)(A) OF T HE ACT TO INDICATE THAT THE EXPENDITURE INCURRED IN THE EARLI ER YEAR CANNOT BE MET OUT OF THE INCOME OF THE SUBSEQUENT Y EAR AND UTILIZATION OF SUCH INCOME FOR MEETING THE EXPENDIT URE OF THE EARLIER YEAR, WOULD NOT AMOUNT TO SUCH INCOME BEING APPLIED FOR CHARITABLE OR RELIGIOUS PURPOSES. INCOME DERI VED FROM TRUST PROPERTY HAS TO BE DETERMINED ON COMMERCIAL P RINCIPLES ITA NO. 2017/AHD/16 [ITO(EXEMP.) VS. UTTHAN SEWA SANSTHAN] AY 2012-13 - 7 - AND IF COMMERCIAL PRINCIPLES FOR DETERMINING THE IN COME ARE APPLIED, IT IS BUT NATURAL THAT THE ADJUSTMENT OF T HE EXPENSES INCURRED BY THE TRUST FOR CHARITABLE AND RELIGIOUS PURPOSES IN THE EARLIER YEAR AGAINST INCOME EARNED BY THE TRUST IN THE SUBSEQUENT YEAR WILL HAVE TO BE REGARDED AS APPLICA TION OF INCOME OF THE TRUST FOR CHARITABLE AND RELIGIOUS PU RPOSES IN THE SUBSEQUENT YEAR IN WHICH SUCH ADJUSTMENT HAS BEEN M ADE HAVING REGARD TO THE BENEVOLENT PROVISIONS CONTAINE D IN SECTION 11 OF THE ACT AND WILL HAVE TO BE EXCLUDED FROM THE INCOME OF THE TRUST UNDER SECTION 11(1)(A).' 5.3 I AGREE WITH THE CONTENTION OF THE APPELLA NT AS WELL AS THE RELIANCE PLACED ON THE DECISION OF JURISDICTIONAL G UJARAT HIGH COURT AS ABOVE AND HEREBY DIRECT THE A.O TO ALLOW THE BEN EFIT OF THE DEFICIT OF EARLIER YEARS AGAINST THE FUTURE INCOMES. ACCORD INGLY, GROUND OF APPEAL NO.2 IS ALLOWED. 9. WE FIND THAT THE IDENTICAL ISSUE CROPPED UP IN A SSESSEES OWN CASE IN AY 2010-11 AS WELL, WHEREIN NO ERROR WAS FO UND IN THE ACTION OF THE CIT(A) FOR GRANTING ACCUMULATION OR SET APAR T OF INCOME ALREADY APPLIED IN THIS YEAR TO THE EXTENT OF 15% OF THE RE CEIPT AND CONSEQUENTLY, THE DEFICIT WAS SUITABLY ENHANCED. T HE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CO-ORDINATE BENC H IN ASSESSEES OWN CASE IS REPRODUCED HEREUNDER: 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVE, W E HAVE GONE THROUGH THE RECORD CAREFULLY. THE LD.COUNSEL FOR TH E ASSESSEE HAS PLACED ON RECORD A COPY OF THE JUDGMENT OF THE HON' BLE SUPREME COURT IN THE CASE OF CIT VS. PROGRAMME FOR COMMUNIT Y ORGANISATION, 248 ITR 1 = 166 CR 401 (SC). WE FIND THAT THIS DECISION HAS SILENCED THE CONTROVERSY. IT IS VERY S MALL DECISION. IT READ AS UNDER: 1. THE QUESTIONS THAT WERE REFERRED TO THE HIGH COU RT FOR CONSIDERATION, AT THE INSTANCE OF THE REVENUE, READ THUS : 'I. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND ON AN INTERPRETATION OF THE RELEVANT PROVI SIONS OF THE INCOME-TAX ACT, 1961, THE ASSESSEE IS ENTITL ED TO EXEMPTION AT 25 PER CENT ON RS. 2,57,376 OR ONLY ON RS. 87,010 ? 2. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, SHOULD NOT THE TRIBUNAL HAVE ACCEPTED THE VIE W OF THE REVENUE EXPRESSED IN THE CIRCULAR, THE SAME BEI NG ITA NO. 2017/AHD/16 [ITO(EXEMP.) VS. UTTHAN SEWA SANSTHAN] AY 2012-13 - 8 - CONSISTENT WITH THE RELEVANT PROVISIONS OF THE INCO ME-TAX ACT, 1961 ? 3. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, AND ALSO CONSIDERING THE SCOPE OF THE EARLIER ORDER OF THE COMMISSIONER (APPEALS) DATED 18-11- 1983 THE TRIBUNAL IS RIGHT IN LAW IN HOLDING THAT THE COMMISSIONER (APPEALS) HAS RIGHTLY INTERFERED WITH THE ORDER OF THE INCOME-TAX OFFICER ?' 2. THE ANSWERS BEING IN FAVOUR OF THE ASSESSEE, THE REVENUE IS IN APPEAL BY SPECIAL LEAVE. 3. THE QUESTION THAT REALLY REQUIRES CONSIDERATION IS WHETHER, FOR THE PURPOSES OF SECTION 11(1)(A) OF THE INCOME- TAX ACT, 1961 ('THE ACT'), THE AMOUNT FOR THE GRANT OF EXEMP TION OF TWENTY-FIVE PER CENT SHOULD BE THE INCOME OF THE TR UST OR IT SHOULD BE ITS TOTAL INCOME DETERMINED FOR THE PURPO SES OF ASSESSMENT TO INCOME-TAX. THIS QUESTION HAS TO BE A NSWERED IN THE LIGHT OF THESE FACTS: THE ASSESSEE-TRUST RECEIV ED DONATIONS IN THE AGGREGATE SUM OF RS. 2,57,376. IT APPLIED TH EREOUT FOR ITS CHARITABLE PURPOSES THE AGGREGATE SUM OF RS. 1, 70,369 LEAVING A BALANCE OF RS. 87,010. THE QUESTION IS WH ETHER THE ASSESSEE IS ENTITLED TO ACCUMULATE TWENTY-FIVE PER CENT OF RS. 2,57,376, AS IT CONTENDS, OR TWENTY- FIVE PER CENT OF RS. 87,010, AS THE REVENUE APPEARED TO CONTEND. SECTION 11(1) (A) READS THUS : '11 INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES.-(1)(A ) INCOME DERIVED FROM PRO PERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APP LIED TO SUCH PURPOSES IN INDIA; AND WHERE ANY SUCH INCOM E IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOM E SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF TWENTY -FIVE PER CENT OF THE INCOME FROM SUCH PROPERTY;' 4. HAVING REGARD TO THE PLAIN LANGUAGE OF THE ABOVE PROVISION, IT IS CLEAR THAT A CHARITABLE OR RELIGIOUS TRUST IS ENTITLED TO ACCUMULATED TWENTY-FIVE PERCENT OF INCOME DERIVED F ROM PROPERTY HELD UNDER TRUST. FOR THE PRESENT PURPOSES THE DONATIONS THE ASSESSEE RECEIVED, IN THE SUM OF RS. 2,57,376, WOULD CONSTITUTE ITS PROPERTY AND IT IS ENTITLED TO ACCUMULATE TWENTY FIVE PER CENT THEREOUT. IT IS UNCLEAR ON WHA T BASIS THE REVENUE CONTENDED THAT IT WAS ENTITLED TO ACCUMULAT E ONLY TWENTY-FIVE PER CENT OF RS. 87,010. 5. FOR THE AFORESAID REASONS, THE CIVIL APPEAL IS D ISMISSED. ITA NO. 2017/AHD/16 [ITO(EXEMP.) VS. UTTHAN SEWA SANSTHAN] AY 2012-13 - 9 - 6. NO ORDER AS TO COSTS.' 4. IN VIEW OF THE ABOVE DECISION, WE DO NOT FIND AN Y ERROR IN THE ORDER OF THE CIT(A). THE APPEAL OF THE REVENUE IS D ISMISSED. 10. IN PARITY WITH THE VIEW ALREADY TAKEN BY THE CO -ORDINATE BENCH IN ASSESSEES OWN CASE IN THE EARLIER ASSESSMENT YEAR, THE CIT(A) WAS JUSTIFIED IN ADMITTING THE CLAIM OF THE ASSESSEE FO R ACCUMULATION OF INCOME. THE CIT(A) HAS RIGHTLY VIEWED THAT EXEMPTI ON UNDER S.11(1)(A) OF THE ACT I.E. 15% OF THE INCOME IS UNF ETTERED AND NOT SUBJECT TO ANY CONDITIONS. HENCE, WE DO NOT SEE AN Y PERCEPTIBLE REASON FOR OUR INDULGENCE WITH THE ORDER OF THE CIT (A). WE THUS DECLINE TO INTERFERE. 11. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. SD/- SD/- (JUSTICE P. P. BHATT) (PRADIP KU MAR KEDIA) PRESIDENT ACCOUNTANT MEMBER AHMEDABAD: DATED 24/01/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 24/01/2 019