TMI Blog1991 (4) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is a public charitable trust. The accounting year relevant to the assessment year 1983-84 ended on September 30, 1982. The assessee invested its assets in shares of private companies. The assessee failed to produce evidence that the assets were converted into specified investments before November 30, 1983, as required by the provisions of section 13(1)(d) read with section 11(5) of the Income-tax Act, 1961. Therefore, the Income-tax Officer denied exemption under section 11 of the Income-tax Act. The Income-tax Officer was of the view that the amended provisions of the above section came into force with effect from April 1, 1983, and that the said provision is applicable to the assessment year 1983-84. The assessee, being aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee-trust was allowed time till November 30, 1983, to convert the investments into specific investments in terms of the provisions of section 13(1)(d) read with section 11(5) whereas the previous year of the assessee ended long prior to the material date, i.e., November 30, 1983. In such a case, the question of contravention of any of the provisions in the previous year relevant to the assessment year 1983-84 did not arise. In other words, his contention is that the said provisions were not applicable to the assessment year 1983-84 as the previous year of the assessee ended prior to November 30, 1983. He has also drawn our attention to Circular No. 596, dated March 15, 1991 of the Board where the Board decided that the provisions of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therwise than in any one or more of the forms or modes specified above, continue to remain so invested or deposited after 30th November, 1983 ; or (iii) any shares in a company (other than a Government company as defined in section 617 of the Companies Act, 1956, or a statutory corporation) are held by the trust or institution after 30th November, 1983. It is relevant in this connection to note that the provisions of section 13(1)(d) which would otherwise have come into operation from the assessment year 1983-84 stood superseded by the amendments made by the Finance Act, 1983. It is no doubt true that the aforesaid provisions relating to investment of trust funds in specified forms or modes took effect from April 1, 1983, but the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll for consideration for the assessment year 1984-85 which will be the relevant assessment year, the previous year of the assessee having ended prior to April 1, 1983. The assessee was still having time up to November 30, 1983, to convert its investments in accordance with section 11(5). In our view, in considering the question whether the assessee-trust can be allowed exemption for the assessment year 1983-84, the fact that no conversion has been made as enjoined by section 13(1)(d) read with section 11(5) will be of no relevance. While looking at the facts prevailing during the previous year relevant to the assessment year 1983-84, it cannot be said that the assessee failed to comply with the provisions of section 11(5) by not convertin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sts and institutions, having investments otherwise than in one or more of the forms or modes specified in section 11(5) of the Act, which had been made before March 1, 1983, were allowed to change their pattern of investment to that specified in section 11(5) before November 30, 1983. Many trusts and institutions, who changed their investment pattern between April 1, 1983 and November 30, 1983, were denied the benefit of exemption for the assessment year 1983-84 in view of the provisions of section 13(1)(d). 2. The issue has been considered in the Board and it is decided that the provisions of section 13(1)(d) would be applicable from the assessment year 1984-85 and not from the assessment year 1983-84. It is also decided that appellate d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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