TMI Blog2016 (7) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... rrant any interference by this court. - Decided against revenue - D.B. Income Tax Appeal Nos. 47, 48, 50 & 51 of 2013 - - - Dated:- 26-4-2016 - Sangeet Lodha And Kailash Chandra Sharma, JJ. For the Petitioner : K. K. Bissa For the Respondent : Rajesh Choudhary ORDER Sangeet Lodha, J. 1. These appeals arising out of the common order dated 4.12.12 passed by the Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, Jodhpur, allowing the appeals preferred by the assessees, questioning the legality of the orders passed by the Commissioner of Income Tax (Appeals) [CIT (A)], affirming the order passed by the Assessing Officer (A.O.), rejecting the claim of assessees for exemption under Section 11(1)(a) of the Income Tax Act, 1961 (for short the Act ), involving identical substantial question of law, were heard together and are being disposed of by this common order. 2. The relevant facts in nutshell are that assessees, Agriculture Produce Market Committees, filed Return of Income for the assessment year 2008-09, claiming the status as Charitable Trust. Indisputably, the income derived during the previous year relevant to assessment year 2008-09, was applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited to the powers of assessing authority and does not impinge on the power of the tri u/s 254 of the I.T.Act. Following this ratio, we are satisfied that when the appellate authority including the ld. CIT(A), entertains a new claim as such, the judgement rendered by the Hon'ble Apex Court in Goetze [India] Ltd [supra] does not impinge his power to entertain the claim for deduction otherwise than by filing revised return before the assessing authority. The ld. CIT(A),therefore, cannot be said to have committed any error in entertaining the claim for deduction made before him as such. Hence, these appeals by the Revenue. 6. These appeals were admitted by a coordinate Bench of this court on the following substantial questions of law arising for consideration out of the order impugned passed by the ITAT: D.B.INCOME TAX APPEAL NO.47/13 Whether on the facts and in the circumstances of the case, the ITAT has been justified in allowing the claim of ₹ 2,76,65,446/- as application of income under section 11 (1)(a) of the Income Tax Act, 1961? D.B.INCOME TAX APPEAL NO.48/13 Whether on the facts and in the circumstances of the case, the ITAT has been j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent submitted that the controversy involved in these appeals stand covered by decision of this Court in Maharana Mewar Charitable Foundation's case (supra), the decision of Gujarat High Court in Shri Plot Swetamber Murti Poojak Jain Mandal's case (supra), a decision of Delhi High Court in 'Director of Income Tax Vs. Raghuvanshi Charitable Trust' and other connected matters, [2011] 197 TAXMAN 170 [Del] and a decision of Bombay High Court in the matter of 'CIT Vs. Institute of Banking Personnel' (2003) 131 Taxman 386. Learned counsel would submit that the conclusion arrived at by this court in Shri Akhey Ram Ishwari Prasad Trust's case (supra), is not supported by any reasons. Learned counsel submitted that in the said case, while arriving at the conclusion that the assessee having incurred expenses during the previous year relevant to the assessment year in excess of the income earned, from the charity fund, is not entitled to exemption, the relevant provisions of Section 11(1)(a) of the Act have not been considered and earlier Bench decision of this court in Maharana Mewar Charitable Foundation's case (supra), which is a binding precedent, has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to the Oxford Dictionary, the word applied means to make use or to put to practical use . When the income of a trust is used or put to use to meet the expenses incurred for religious or charitable purposes, it is applied for charitable or religious purposes. The said application of the income for charitable or religious purposes takes place in the year in which the income is adjusted to meet the expenses incurred for charitable or religious purposes. In other words, even if the expenses for charitable and religious purposes have been incurred in the earlier year and the said expenses are adjusted against the income of a subsequent year, the income of that year can be said to have been applied for charitable and religious purposes in the year in which the expenses incurred for charitable and religious purposes had been adjusted. 9. In this context, it may be mentioned that the Central Board of Direct Taxes has issued a Circular dated January 24, 1973, wherein the Central Board of Direct Taxes has considered the question as to whether where a trust incurs a debt for the purpose of the trust, the repayment of the debt would amount to an application of income for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it will create an anomalous situation inasmuch as, if the Trust takes a loan for the purposes of incurring expenses for charitable and religious purposes in a particular year and the said loan is repaid out of the income of subsequent year, the said repayment would be entitled for exemption under Section 11(1)(a) but if the Trust instead of taking a loan incurs expenditure for charitable and religious purposes out of the corpus of the Trust and seeks to reimburse the said amount out of income of subsequent year, the Trust would not be entitled to claim exemption in respect of such reimbursement under Section 11(1)(a) of the Act. The court opined that a construction which leads to such an anomaly must be avoided. 13. It is pertinent to note that the view taken by this court in Maharana of Mewar Charitable Foundation's case (supra), has been consistently followed by different High Courts as well. 14. Keeping in view the law laid down by this court in Maharana of Mewar Charitable Foundation's case (supra), this court is of the considered opinion that if the assessees are entitled to claim set off of the expenditure incurred in excess of the income in the earlier years a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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