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Amendment to s.11(3) Prospective: Old Accumulations Retain 6-Year Window

Case Law Details

TaxGuru Citation
2025 taxguru.in 8645
Case Name
Taldhwaja Jain Swetamber Tirth Committee Vs ITO (Exemption) (ITAT Ahmedabad)
Date of Judgement/Order
Only available for paid members
Related Assessment Year
2023-24
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Taldhwaja Jain Swetamber Tirth Committee Vs ITO (Exemption) (ITAT Ahmedabad)

Amendment to Section 11(3) Prospective – Old Accumulations Still Get 6-Year Window- ITAT Ahmedabad

Assessee trust registered u/s 12AB, filed NIL return for AY 2023-24 claiming exemption u/s 11. CPC, while processing the return u/s 143(1), accepted accumulation of ₹58.62 lakh but treated ₹30 lakh, accumulated in FY 2016-17 u/s 11(2) & utilised in FY 2022-23, as deemed income taxable u/s 115BBI, relying on the amended s.11(3) inserted by Finance Act, 2022.

CIT(A) upheld CPC’s action, holding that accumulation made in FY 2016-17 had to be utilised by FY 2021-22 (within 5 years) & since it was applied in FY 2022-23, beyond the period, the adjustment was valid.

Before Tribunal, Assessee argued that the Finance Act, 2022 amendments were prospective, applying only to fresh accumulations from AY 2023-24 onwards & not to past accumulations. Under the unamended law, utilisation in the 6th year was permissible, hence the adjustment was bad in law.

The Tribunal relied on recent precedents – Meshri Mahajan Vanda v. ITO (2025, ITAT Ahmedabad), Dadar Digamber Jain Mumukshu Mandal v. CIT(E) (2025, ITAT Mumbai) & Yashwantrao Chavan Maharashtra Open University v. CIT(E) (2025, ITAT Pune) – which consistently held that the 2022 amendment to s.11(3) is prospective & accumulations made in earlier years continue to enjoy the extended window up to 6 years. Accordingly, ITAT set aside CIT(A)’s order and directed deletion of the addition of ₹30 lakh taxed u/s 115BBI.

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Author Info

CA Vijayakumar Shetty
Qualification: CA in Practice
Company: Shetty & Co, Chartered Accountants, Mangalore
Location: Mangalore, Karnataka
Articles Published: 6,879

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