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2015 (9) TMI 128 - AT - Income TaxAddition of accumulated income of trust - as per AO appellant trust had not filed the requisite application as contemplated u/s.11 - operation of the injunction of the District Court - whether the period in which the order of the Jt.Dist.Judge was in operation to be excluded for reckoning the period of 10 years as mentioned in section 11(2)(a) of the Act under the facts of the present case? - Held that:- Affairs of the assesseetrust were taken over by the Court appointed Receiver and, therefore, it can be inferred from the material available on record that the trustees of the assessee-trust were restrained from managing the affairs. Sub-section(3A) of section 11 contemplates a situation where due to circumstances beyond the control of the person in receipt of the income, any income invested or deposited in accordance with the provisions of clause(b) of sub-section (2) could not be applied for the purpose for which it was accumulated or set apart. In that situation, the Assessing Officer may, on an application made to him in this behalf, allow such person to apply such income for such other charitable or religious purpose in India as is specified in the application by such person and as is in conformity with the objects of the trust; and thereupon the provisions of sub-section(3) shall apply as if the purpose specified by such person in the application under this sub-section for a purpose specified in the notice given to the Assessing Officer under clause (a) of sub-section(2). In the present case, no such application was made by the assesseetrust or the Court appointed Receiver. However, there is no dispute with regard to the fact that the trustees were restrained from managing the affairs. For the omission on the part of the Court appointed Receiver would not, in our considered, view disentitle the assessee-trust for seeking condonation of delay, if any, in notifying the AO in the terms of provision of section 11(2) of the Act. Therefore, we hereby set aside the orders of the authorities below and restore the issue to the file of AO for decision afresh. The AO would verify the period during which the affairs of the assessee-trust were managed by the Court appointed receiver. He would exclude such period in the light of first proviso to section 11(2) of the Act and would verify whether the money so accumulated or set apart was invested or deposited in the forms or modes specified in Section 11(5) of the Act. - Decided in favour of assessee for statistical purposes.
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