DCIT (Exemptions) Vs State Examination Board (ITAT Ahmedabad)
The appeal before the ITAT Ahmedabad concerned the allowability of exemption claimed by the assessee on an amount of ₹3.32 crore in Assessment Year (A.Y.) 2017–18, which formed part of ₹5.60 crore accumulated under Section 11(2) of the Income Tax Act in A.Y. 2012–13. The Assessing Officer (AO) had disallowed the claim on the ground that allowing exemption in the impugned year would amount to double deduction, as the entire ₹5.60 crore had already been claimed as exempt in A.Y. 2012–13. The Commissioner of Income Tax (Appeals) [CIT(A)] deleted the disallowance, accepting the assessee’s contention that the amount was applied during the year.
The Tribunal examined the facts in detail. It was undisputed that the assessee had accumulated ₹5.60 crore in A.Y. 2012–13 under Section 11(2), as reflected in Form 10B, and had claimed exemption in that year. The accumulated funds were invested in specified modes as required under the Act. In the impugned year, the assessee credited ₹3.32 crore from the accumulated funds to its income and expenditure account, claiming that it had been applied for charitable purposes, partly towards capital expenditure and partly towards revenue expenditure.
However, the Tribunal found that the assessee failed to establish that the ₹3.32 crore had not already been claimed as exempt in A.Y. 2012–13. In the absence of any evidence to the contrary, it held that the entire ₹5.60 crore had been treated as exempt in the earlier year. Therefore, claiming exemption again in A.Y. 2017–18 on utilisation of a portion of the same amount constituted double deduction.
