TMI Blog2020 (11) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... Y 2013-14. This appeal relates to AY 2013-14 in which the AO sought to apply the provisions of section 11(3)(c). The Assessee did not raise such a plea regarding the applicability of the aforesaid provisions in AY 2014-15 only. There is a reference to section 11(3)(d) in the order of AO, which in our opinion, is not the correct provision of law. Since the assessee did not give any explanation in not utilising the surplus funds accumulated, the AO brought to tax a sum of ₹ 1,93,54,000. CIT(Appeals), the plea of assessee was that it had utilised the accumulated surplus for construction of a hostel building and products accounts evidencing income expenditure towards the same. Period of 5 years for spending the accumulated surp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,93,64,000 in FY 2007-08 relevant to AY 2008-09 on account of sale of immovable property of the assessee trust. The objects of the trust, we may notice, was to run schools, colleges, dispensaries, Dharmashalas, etc. The assessee could not apply the aforesaid surplus for charitable purposes in AY 2008-09 and had applied for accumulation of such surplus in terms of section 11(2) of the Act. As per the provisions of section 11(2), accumulation is allowed for a period of 5 years. It is not in dispute that such accumulation was allowed by the AO for the AY 2008-09. 4. In AY 2013-14 which is the Assessment year in appeal, the AO held that since the five years period expires in AY 2013-14, and since the assessee did not utilize the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid. 5. A reading of Clause (c) of Sec. 11(3) of the Act would show that the time allowed for applying accumulation for charitable purpose is 5 year and one year following the expiry of 5 years. This is clear from the expression used or in the year immediately following the expiry thereof . The previous year following the expiry of period of 5 years from AY 2008-09 will be AY 2014-15 and not AY 2013-14. This appeal relates to AY 2013-14 in which the AO sought to apply the provisions of section 11(3)(c). The Assessee did not raise such a plea regarding the applicability of the aforesaid provisions in AY 2014-15 only. 6. There is a reference to section 11(3)(d) in the order of AO, which in our opinion, is not the correct provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above, I do not hesitate in concluding that the action of the AO was correct and the addition was made rightly. The grounds 1 to 4 and 6 are hereby dismissed. 8. The Assessee did not raise plea regarding the applicability of the aforesaid provisions of Sec. 11(3)(c) of the Act only in AY 2014-15 only. Aggrieved by the order of CIT(Appeals), the assessee has preferred the present appeal before the Tribunal. 9. As we have already noticed, the period of 5 years for spending the accumulated surplus for AY 2008-09 or in the year immediately following the expiry thereof is only AY 2014-15. This aspect has been highlighted by the assessee in ground Nos. 2 to 4 in its appeal before the Tribunal, which reads as follows:- 2. That th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered and accepted by the AO. 10. The ld. counsel for the assessee has also filed before us a copy of the order of assessment for AY 2014-15 wherein the AO has accepted the utilization of accumulated surplus in AY 2008-09 for charitable purpose in AY 2014-15. The ld. Counsel for the assessee drew our attention to the fact that the assessee had spent a sum of ₹ 1,67,47,400 and to this extent, the application of income for charitable purposes has been accepted by the AO in AY 2014-15 in the order of assessment dated 26.12.2016 passed u/s. 143(3) of the Act. 11. The ld. DR while relying on the order of CIT(Appeals) submitted that this aspect has not been examined either by the AO or the CIT(Appeals) and therefore the issue should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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