Commissioner Of Income Tax (Exemptions v. Olive International Education Foundation==========================================================

C/TAXAP/484/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 484 of 2018 ========================================================== COMMISSIONER OF INCOME TAX (EXEMPTIONS) Versus OLIVE INTERNATIONAL EDUCATION FOUNDATION========================================================== Appearance:MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHIandHONOURABLE MR.JUSTICE B.N. KARIA Date : 09/05/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1.Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 18.12.2017 raising following questions for our consideration. “[A] Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal was right in allowing for set-off of brought forward excess expenditure incurred over and above the income i. e. deficit in earlier year against the income of the subsequent year though there is no such provision to claim such deficit in the case of trust claiming exemption u/s.11 & 12 of the Act? [B]Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal was right in allowing the claim of the assessee for carry forward of the said deficit by relying upon the judgment of Hon'ble Delhi High Court in the case of Raghuvanshi Charitable Trust, ignoring the facts that the Department has not accepted the said decision of the High Court and hence the issue has not yet attained finally? [C]Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal was right in allowing the claim of the assessee for carry forward of the said deficit, ignoring the fact that there was no express provision in the the Income Tax Act, 1961 permitting allowance of such claim ?” 2.Though three questions are raised, issue is common and covered by judgment of this Court in case of Commissioner of Income-Tax v. Shri Plot Swetamber Murti Pujak Jain Mandal reported in [1995] 211 ITR 293 (Guj), in which, similar question was considered in following manner. “A bare perusal of the above-referred provisions of the Act shows that the income derived from property held under trust wholly for charitable or religious purposes to the extent to which such income is applied to such purposes in India is to be excluded for the purposes of computing the income of the trust for the purpose of assessment. There are no words of limitation in this section providing that the income should have been applied for charitable or religious purposes only in the year in which the income had arisen. The word "applied" means "to put to use" or "to turn to use" or "to make use" or "to put to practical use". Having regard to the provisions of Section11of the Act, it is clear that 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 C/TAXAP/484/2018 ORDER 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 expenses for charitable and religious purposes have been incurred for 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.” C/TAXAP/484/2018 ORDER 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 expenses for charitable and religious purposes have been incurred for 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.” 3.In the result, Tax Appeal is dismissed. (AKIL KURESHI, J) ANKIT SHAH (B.N. KARIA, J)