JAIN SWETAMBER MURTIPUJAK TAP GACHHYA UPASHRYA AND OTHER PROPERTY,BANASKANTHA V. THE ITO (EXEMP), PALANPUR

ITA 1724/AHD/2025

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The case involves Jain Swetamber Murtipujak Tap Gachhya Upashrya, a religious trust, which appealed against the order of the Addl. Commissioner of Income Tax/JCIT (Appeals)-5, Delhi. The dispute arose from an intimation under section 143(1) of the Income Tax Act, 1961, for the Assessment Year 2023-24, where the CPC disallowed an exemption claimed under section 11 of the Act. The trust had declared a total income of Rs.90,00,000, after claiming an exemption and accumulating funds from previous years, which were partially spent in the current assessment year. The Tribunal's decision was influenced by precedents that supported the assessee's interpretation of the applicable provisions at the time of accumulation, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789211 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 11-09-2025
• Other Referred Cases: Dadar Digamber Jain Mumukshu Mandal vs CIT(E), Yashwantrao Chavan Maharashtra Open University vs CIT(E)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Time period of passing order
• Section: 11; 234B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member Jain Swetamber Murtipujak Tap Gachhya Upashrya And Other Property At N Post Palanpur, Palanpur Dist., Banaskanth-385001 Gujarat PAN: AAATJ1476F (Appellant) Vs The ITO (Exemption) Palanpur, Palanpur Gujarat (Respondent) Assessee Represented: Shri M. K. Patel, A.R. Revenue Represented: Shri Rohit Aasudani, Sr. D.R. Date of hearing : 12-11-2025 Date of pronouncement : 24-11-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 16.07.2025 passed by the Addl. Commissioner of Income Tax/JCIT (Appeals)-5, Delhi arising out of the intimation passed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2023-24. ITA No: 1724/Ahd/2025 Assessment Year: 2023-24 Printed from counselvise.com I.T.A No. 1724/Ahd/2025 A.Y. 2023-24 Page No Jain Swetamber Murtipujak Tap Gachhya Upashrya And Other Property vs. ITO (E) 2 2. Brief facts of the case is that the assessee is a Religious Trust filed its Return of Income for the Asst. Year 2023-24 on 29-11-2023 declaring total income of Rs.90,00,000/- after claiming exemption u/s. 11 of the Act. The assessee has accumulated a sum of Rs.6,75,000/- by filing Form No. 10 for Financial Year 2017-18 and spent Rs. 5,85,000/- in A.Y. 2023-24 and balance sum of Rs.90,000/- as income in A.Y. 2023-24. The assessee claimed the commencement of six years for spending accumulated amount start from immediate succeeding previous year. For Financial Year 2016-17, the limitation period will start from Financial Year 2017- 18 to 2022-23. While processing the return, the CPC disallowed the said exemption and assessed the extra income of the assessee at Rs.6,75,000/- and demanded tax thereon. 3. Aggrieved against the intimation, the assessee filed an appeal before Ld. Addl.CIT(A). The assessee claimed that it had spended Rs.5,85,000/- in Financial Year 2022-23 and offered the remaining Rs90,000/- as income in the return filed for the Asst. Year 2023- 24. Thus the accumulated funds were applied within the permissible time and the addition made by CPC was not justified and relied upon various judgments. The assessee also submitted that the amendment brought in by the Finance Act, 2022 cannot override the legal regime which was applicable at the time of accumulated and that such changes were considered to be prospective only. The Ld. Addl.CIT(A) disagreed with the submissions of the assessee thereby confirmed the addition made by the CPC and dismissed the appeal. Printed from counselvise.com I.T.A No. 1724/Ahd/2025 A.Y. 2023-24 Page No Jain Swetamber Murtipujak Tap Gachhya Upashrya And Other Property vs. ITO (E) 3 4. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: (1) That on facts, and in law, the learned Addl/JCIT (A)-5, Delhi ought to have held that the addition made by CPC u /s 11 (2) of the Act is debatable and beyond the scope of powers of adjustment u/s 143 (1) of the Act. (2) That on facts, in law, and on evidence on record, the learned Addl/JCIT (A)-5, Delhi has grievously erred in confirming the addition of Rs. 5,85,000/- by applying amended provisions of section 11 (2) of the Act, which are not applicable to the year under consideration. (3) That on facts, in law, and on evidence on record, the learned Addl/JCIT (A)-5, Delhi has grievously erred in confirming the levy of interest u /s 234B of Rs.39,501/- and 234C of Rs.10,609/- (4) The appellant craves leave to add, alter, amend any ground of appeal. 5. At the outset, Ld. Counsel for the assessee submitted that Amendment to Section 11(3)(c) by Finance Act, 2022 with effect from 1-4-2023 which admitted extra period of one year following expiry of initial period of accumulation of five years is prospective in nature and thus the same would be applicable only to fresh accumulation from assessment year 2023-24 onwards. In this connection, Ld. A.R. placed on record the Co-ordinate Bench decision of Mumbai in the case of Dadar Digamber Jain Mumukshu Mandal – vs- CIT(E) reported in [2025] 176 taxmannm.com 661 (Mumbai – Trib.) and Pune Bench decision in the case of Yashwantrao Chavan Maharashtra Open University –vs – CIT(E) in ITA No. 505/PUN/2025 vide order dated 23-06-2025. Printed from counselvise.com I.T.A No. 1724/Ahd/2025 A.Y. 2023-24 Page No Jain Swetamber Murtipujak Tap Gachhya Upashrya And Other Property vs. ITO (E) 4 6. The Ld. Sr. D.R. appearing for the Revenue could not dispute the above facts, however relied on the orders passed by the lower authorities. 7. We have heard rival submissions and perused the materials available on record. In the case of Dadar Digamber Jain Mumukshu Mandal (cited supra) wherein it was held as follows: “24. In light of the aforesaid discussion, we find merit in the contentions advanced by the Ld.AR that as far as the accumulation relating to the period of FYs. 2016-17 and 2017-18 are concerned, the assessee had the time window till 31-03-2023 and 31-03-2024 respectively by which it has to utilize accumulated income and in that view of the matter, the amendment brought in by the Finance Act, 2022 does not debar the assessee from availing the said time window in respect of existing accumulations and the amendment have to be read prospectively in respect of fresh accumulations for the period pertaining to previous year starting from 1\" April, 2022 onwards. 25. Further, we find that for FY 2016-17, the assessee has utilized Rs. 35,66,540/- during the financial year 2022-23 within the specified time period of six years and thus, the same cannot be brought to tax and the remaining un-utlised amount of Rs 14,33,460/- has been suo-moto offered by the assessee in its return of income. Thus, the whole of the additions pertaining to FY 2016-17 amounting to Rs.35,66,540/- deserve to be setaside and is hereby set-aside. 26. For FY 2017-18, the assessee has time window to utilize the accumulated income till 31-03-2024 and thus, the question of bringing the same to tax during the impugned assessment year 2023-24 doesn't arise at first place and the question of taxability will arise in subsequent assessment year 2024-25 only where the assessee fails to utilize the accumulated income. The assessee has claimed before us that it has utilized Rs. 40,00,000/- in subsequent financial year 2023-24, however, we are not going to examine the same as we are concerned with assessment year 2023-24 and not assessment year 2024-25 and the same is thus not subject matter of present appeal and it is open for the assessee to explain the same before the AO should the need for the same arise in the subsequent assessment year. Therefore, as far as the impugned assessment year is concerned, no addition can be made for accumulation of income pertaining to FY.2017-18 as the assessee continues to be guided by the provisions as existed at the relevant point in time and the time window of six years as so provided and the amendment Printed from counselvise.com I.T.A No. 1724/Ahd/2025 A.Y. 2023-24 Page No Jain Swetamber Murtipujak Tap Gachhya Upashrya And Other Property vs. ITO (E) 5 made by the Finance Act, 2022 cannot curtail the said time window and has to be applied prospectively in respect of fresh accumulations. Thus, the whole of the additions pertaining to FY.2017-18 amounting to Rs 40,00,000/-deserve to be set-aside and is hereby set-aside. 27. In the result, the appeal of the assessee is allowed.” 8. The Mumbai Tribunal has followed the decision of this Pune Bench in the case of Yashwantrao Chavan Maharashtra Open University (cited supra). Respectfully following the judicial precedents, the lower authorities are not correct in making the entire addition 9. Even in the present case, the assessee offered Rs.90,000/- being the unutilized amount pertaining to the Asst. Year 2016-17 and claimed exemption on the amounts spent of Rs. 5,85,000/- during that present Asst. Year 2023-24 which is the sixth year. Therefore the addition of Rs.6,75,000/- made by CPC and confirmed by Ld. CIT(A) is to be modified to the extent of Rs.90,000/-. Thus the grounds raised by the assessee is hereby allowed. 10. In the result, the appeal filed by the Assessee is allowed. Order pronounced in the open court on 24-11-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 24/11/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue Printed from counselvise.com I.T.A No. 1724/Ahd/2025 A.Y. 2023-24 Page No Jain Swetamber Murtipujak Tap Gachhya Upashrya And Other Property vs. ITO (E) 6 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद Printed from counselvise.com "