DCIT (Exemption) Vs Dr. D. Y. Patil (ITAT Pune)
Absolute 15% Exemption Upheld for Charitable Trusts – ITAT Pune Rejects Revenue’s Restriction on Section 11(1)(a); ITAT Rules 15% Deduction under Section 11(1)(a) Applies to Gross Receipts, Not Surplus; Absolute Nature of Section 11(1)(a) Exemption Reaffirmed – ITAT Dismisses Revenue Appeal; Charitable Trusts Entitled to Full 15% Accumulation on Receipts, Rules ITAT Pune; ITAT Dismisses Revenue Appeal, Confirms 15% Exemption on Gross Income for Charitable Trusts; Section 11(1)(a) Exemption is Absolute – ITAT Upholds Deduction on Gross Receipts; No Restriction on 15% Charitable Exemption: ITAT Pune Follows Supreme Court Precedent; 15% accumulation on gross receipts- No link with surplus- Tribunal affirms 11(1)(a) deduction as unconditional relief— Pune ITAT upholds absolute exemption for charitable trusts
Assessee, a charitable trust engaged in education & medical services, filed return declaring loss of ₹10.87 crore. Assessment was completed u/s 143(3) determining income at ₹7.04 crore after disallowing depreciation of ₹4.50 crore. Subsequently, AO reopened assessment u/s 147 on the ground that accumulation u/s 11(1)(a) was wrongly allowed. He noticed that although surplus available was only ₹81.16 lakh, the trust had claimed 15% accumulation on gross receipts amounting to ₹7.85 crore. AO held that accumulation can be claimed only on the surplus after expenditure, not on gross receipts, & accordingly restricted the deduction.
