Yashwantrao Chavan Maharashtra Open University Vs CIT (ITAT Pune)
ITAT Pune held that adjustment under section 11(3) of the Income Tax Act as deemed income cannot be sustained as accumulated surplus funds are utilized within stipulated time period and the amendment to the provisions of section 11(3) are held to be prospective in nature.
Facts- The assessee Yashwantrao Chavan Maharashtra Open University (YCMOU) is established by Yashwantrao Chavan Maharashtra Open University Act, 1989. The sole object of the assessee is education, more particularly described as ‘to advance and disseminate learning and knowledge by a diversity of means’. During F.Y. 2016-17, the trust had accumulated an amount of Rs.90,70,20,511/- which was required to be utilized within 5 years and if not utilized then unutilized amount, if any, was taxable in 6th year. The CPC in the Intimation u/s 143(1) of the Act added an amount of Rs.90,70,20,511/- u/s 11(3) of the Act as deemed income.
CIT(A) dismissed the appeal of the assessee. Being aggrieved, the present appeal is filed.
Conclusion- It is an admitted fact that when the trust accumulated an amount of Rs.90,70,20,511/-during the financial year 2016-17 it was required to utilize the same within a period of 5 years from the end of the relevant assessment year or in the year immediately following the expiry thereof. In other words, the assessee was required to utilize the same before the end of the 6th year i.e. financial year 2022-23. The assessee in the instant case undisputedly has utilized the amount before 31.03.2023.
