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2021 (8) TMI 1357 - AT - Income TaxExemption u/s 11 - treating unutilized amount of grant received from “Essar Limited” - claim towards actual application of income in the immediately next financial year - HELD THAT:- We find that the law permits availability of deduction u/s 11(1) of the Act where the assessee has successfully demonstrated the application of income in the immediately subsequent financial year. Inconsistency in taking shelter of either Section 11(1) or Section 11(2) of the Act, in our view, is not fatal for the purposes of granting tax relief to a charitable trust engaged in benefit of public at large. The substantial compliance of the conditions laid down in the respective provision is of overriding importance. The assessee, in the instant case, claimed that, on facts, it has complied with the provisions of Section 11(1) of the Act read with Explanation (1)(1)(b) thereto towards utilization of CSR money received and thus entitled to tax benefits available to the charitable trust. We observe that the claim towards actual application of income in the immediately next financial year is a question of fact. The aforesaid fact thus requires suitable examination at the end of the AO to enable him to form a view on entitlement of tax benefits u/s 11 of the Act in accordance with law and in terms of observations made hereinabove. We accordingly consider it expedient to set aside the first appellate order and restore the issue back to the file of the AO to ascertain actual utilization of donation/income received from Essar Steel Ltd. for charitable purposes in immediately next financial year in terms with Explanation 1(b) to Section 11(1) of the Act. In the event, where the AO finds to his satisfaction that the amount has been utilized in the next financial year as pleaded, he shall grant the deduction to the assessee as claimed in accordance with law. Needless to say, proper opportunity shall be granted to the assessee to ascertain the relevant facts and the AO shall pass speaking order.
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