TMI Blog2015 (9) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r objects of the rust notwithstanding the resolution passed and the trust be allowed to do variations accordingly and the addition of ₹ 1,35,70,420/- made be deleted. 4. The order passed by CIT(Appeals)-VI, Baroda is bad in law and contrary to the provisions of law and facts. It is submitted that the same be held so now. 5. Your appellant craves leave to add, alter and/or to amend all/or any of the grounds before final hearing of the appeal. 2. Briefly stated facts are that the case of the assessee was reopened and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act ) was framed vide order dated 31/03/2014, thereby the Assessing Officer (AO in short) made addition of accumulated income pertaining to AY 2003-04 of ₹ 1,35,70,474/-. Against the said assessment order, assessee preferred an appeal before the ld.CIT(A), who after considering the submissions dismissed the appeal. Aggrieved by the order of the ld.CIT(A), the assessee is now in appeal before us. 3. The ld.counsel for the assessee argued at length and submitted that the authorities below were not justified in making the addition. He submitted that competen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t an exception with respect to the period that needs to be computed as per the provisions of section 11(2)(a) and due to the operation of the injunction of the District Court the case of the appellant squarely falls within this exception. Further, the ld.counsel for the assessee reiterated the submissions as were made before the ld.CIT(A). 3.1. On the contrary, ld.Sr.DR submitted that there is no illegality in the orders of the authorities below. The assessee was required to apply the fund in accordance with the provisions of the Act, but the assesseetrust failed to do so. Therefore, the AO was justified in making the addition. He submitted that the appellant trust had not filed the requisite application as contemplated u/s.11 of the Act. He submitted that the appointment of Receiver would not ipso facto be sufficient to not to comply with the mandatory provisions of the Act. He submitted that the Ld.Court had not restrained the Receiver from applying the fund as per the provisions of the Act. 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The reasons for issuing notice u/s.148 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, it is a fit case to issue notice u/s.148 for A.Y. 2009-10. 4.1. The AO in the assessment order followed the order of the ld.CIT(A) passed in AYs 2010-11 2011-12, wherein similar additions were confirmed by the ld.CIT(A). 4.2. The only question which arises for our consideration is 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. For the sake of clarity, section 11(2) and 11 (3) are reproduced hereinbelow:- Section 11 [(2) [Where [eighty-five per cent] of the income referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, namely :-] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10,] shall be deemed to be the income of such person of the previous year in which it is so applied or ceases to be so accumulated or [set apart or ceases to remain so invested or deposited or credited or paid or], as the case may be, of the previous year immediately following the expiry of the period aforesaid.] [(3A) Notwithstanding anything contained in sub-section (3), 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) cannot be applied for the purpose for which it was accumulated or set apart, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and immoveable properties of the trust. 8. The defendants, their agents, office bearers and servants are hereby restrained from managing the properties and affairs of the public trust known as Kalika Mataji Temple, at Pavagadh, registered under Bombay Public Trust Act No.421/Panchmahals, during the pendency of this appeal. 9. The Receiver is also directed to make an inventory of the trust properties and affairs belonging to the public trust, known as Kalika Mataji Temple. The pltff is directed to pay additional remuneration for the said work of inventory of the trust properties at ₹ 1,000/- (Rupees one thousand only at first instance. Pronounced in the Open Court today this 01st day of October, 1994. (ii) Further, the ld.Jt.District Judge confirmed the Ad-interim injunction granted vide order dated 01/10/1994 by order dated 29/10/1994 in the following terms:- ORDER 1. The ad-interim injunction and the order for the appointment of receiver passed by this court below exh.3 dated 1/10/1994 is hereby confirmed and made absolute till the final decision of the Civil Suit No.2 of 1994. 2. The objections filed by the defendants vide exh.23 are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provision by the Receiver. 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). 4.6. 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 retrained from managing the affairs. For the omission on the part of the Court appointed Receiver would not, in our con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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