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2023 (7) TMI 1269 - AT - Income TaxExemption u/s 11 - Accumulation of income - Carry forward of deficit - Carry forward of excess expenditure carried forward from the earlier assessment years - CIT(A) held excess expenditure in the earlier years is to be allowed to be carried over in the subsequent years - HELD THAT:- In case of CIT Vs. Market Committee, Karnal [2010 (7) TMI 1223 - PUNJAB AND HARYANA HIGH COURT] has held that the excess of expenditure incurred could also be adjusted against the income of the following years and requirement of Section 11 was only to apply the income which could also cover adjustment of the income for the expenditure for charitable purposes. In view of the submissions made by both the parties and given the admitted position that the matter is squarely covered against the Revenue by the decision of Subros Educational Society [2018 (4) TMI 1622 - SC ORDER] as well as that of the Hon’ble Punjab and Haryana High Court in decisions referred supra, we affirm the findings of the ld CIT(A) allowing the carry forward of excess expenditure which has been carried forward from the earlier assessment years as well as for the year under consideration for set off in the subsequent assessment years. Explanation 5 to Section 11 has been inserted by the Finance Act 2021 w.e.f 1/04/2022 which provides that “For the purpose of this sub-section, it is hereby clarified that the calculation of income required to be applied or accumulated during the previous year shall be made without any setoff or deduction or allowance of any excess application of any of the year preceding the previous year.” is made effective from 1/04/2022, thus, it won’t any bearing for the impugned assessment year 2015-16. Appeal of the Revenue is dismissed.
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