TMI Blog2023 (7) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... een carried forward from the earlier assessment years as well as for the year under consideration for set off in the subsequent assessment years. Explanation 5 to Section 11 has been inserted by the Finance Act 2021 w.e.f 1/04/2022 which provides that For the purpose of this sub-section, it is hereby clarified that the calculation of income required to be applied or accumulated during the previous year shall be made without any setoff or deduction or allowance of any excess application of any of the year preceding the previous year. is made effective from 1/04/2022, thus, it won t any bearing for the impugned assessment year 2015-16. Appeal of the Revenue is dismissed. - ITA NO. 582/Chd/ 2022 - - - Dated:- 27-7-2023 - Shri. Aakash Deep Jain, VP And Shri. Vikram Singh Yadav, AM For the Assessee : Shri Tej Mohan Singh, Advocate For the Revenue : Smt. Kusum, CIT, DR ORDER PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Revenue against the order of the Ld. CIT(A), NFAC, Delhi dt. 07/06/2022 pertaining to Assessment Year 2015-16. 2. At the outset, it is noted that there is delay of two days in filing the present appeal as pointed ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in case of CIT Vs. Market Committee, Karnal (ITA Nos. 238 of 2010 dt. 28/07/2010), CIT Vs. Ved Parkash Mukand Lal Educational Society (in ITA No. 6 of 2012 dt. 02/05/2012), and the decision of the Hon ble Bombay High Court in case of CIT Vs. Institute of Banking Personnel Selection (IBPS) [2003] 131 Taxman 386(Bom). 7. The application so filed by the assessee was considered but not found acceptable to the AO. As per the AO there is no mistake which is apparent from the record. Further, it was held that the carryover of excess expenditure is not allowed as per the provisions of Section 11 12 of the Act. It was held that where there is a excess utilization over and above the income, the same has to be reflected in the corresponding balance sheet to be claimed in succeeding years and as no claim has been made in the balance sheet, the claim is not tenable and therefore the application filed by the assessee under section 154 was rejected. 8. Against the said findings, the assessee moved in appeal before the Ld. CIT(A) and the submissions made before the AO were reiterated. It was further submitted that the return of income for A.Y 2014-15 has been duly filed with the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as entitled for set off brought forward losses, in other words, excess of expenditure in earlier years against the income of the current year. The Hon ble Punjab Haryana High Court following the decision of Hon ble Gujarat High Court in case of CIT Vs. Shri Plot Swetamber Murti Pujak Jain Mandal as well as decision of Bombay High Court in case of CIT Vs. Institute of Banking Personnel(supra) has upheld the findings of the Tribunal and has held as under: 5. The Tribunal had adjudicated the issue against the revenue in view of the judgment of the Bombay High Court in Commissioner of Income Tax v. Institute of Banking, (2003) 264 ITR 110. The Division Bench of the Bombay High Court in Institute of Banking's case (supra) while relying upon decision of the Gujarat High Court in Commissioner of Income Tax v. Shri Plot Swetamber Murti Pujak Jain Mandal, (1995) 211 ITR 293 had recorded as under- Now coming to question No.3, the point which arises for consideration is : whether excess of expenditure in the earlier years can be adjusted against the income of the subsequent year and whether such adjustment should be treated as application of income in the subsequent year for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT Vs. Market Committee, Karnal (supra), the Hon ble Punjab Haryana High Court has held that the excess of expenditure incurred could also be adjusted against the income of the following years and requirement of Section 11 was only to apply the income which could also cover adjustment of the income for the expenditure for charitable purposes and the relevant findings read as under: 6. Learned counsel for the Revenue submitted that Section 11(1) of the Act only refers to exemption of income of previous year and, therefore, there cannot be any question of adjustment of deficit of excess expenditure of earlier years. The income sought to be exempted must have been applied in the year in question and not earlier. 7. We are unable to accept the submission. 8. Exclusion of income from total income under Section 11 of the Act is to the extent of its application for charitable purposes. Adjustment against excess expenditure of an earlier year is also application of income under the said provision. In CIT v. Maharana of Mewar Charitable Foundation [1987] 164 ITR 439, it was held that it was not necessary that the income should be applied in the year in which it has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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