Clarification regarding applicability of section 13(1)(d) from assessment year 1984-85 and not from assessment year 1983-84
1. Clause (d ) of sub-section (1) of section 13 of the Income-tax Act was substituted by the Finance Act, 1983, with effect from 1-4-1983. The provisions of the new sub-clause were to be applicable from the assessment year 1983-84 onwards. This was also clarified in paragraph 18.7 of Board’s Circular No. 372, dated 8-12-1983. However, under sub-clause (ii) of the said section, religious/ charitable trusts and institutions, having investments otherwise than in one or more of the forms or modes specified in section 11(5) of the Act, which had been made before 1st March, 1983, were allowed to change their pattern of investment to that specified in section 11(5) before 30th November, 1983. Many trusts and institutions, who changed their investment pattern between 1-4-1983 and 30-11-1983, were denied the benefit of exemption for the assessment year 1983-84 in view of the provisions of section 13(1)( d).
2. The issue has been considered in the Board and it is decided that the provisions of section 13(1)(d) would be applicable from the assessment year 1984-85 and not from the assessment year 1983-84. It is also decided that appellate decisions on this issue, hitherto in favour of the assessee, may not be further contested, and pending appeals/references may be withdrawn by the Chief Commissioners of Income-tax, in exercise of the powers delegated to them.
Circular : No. 596, dated 15-3-1991.
JUDICIAL ANALYSIS
EXPLAINED IN – In CIT v. Deoria Public Charitable Trust [1993] 67 Taxman 282/196 ITR 110 (Cal.), it was held that the Board’s Circular No. 596 has laid down that the provisions of section 13(1)(d) would be applicable from the assessment year 1984-85 and not from the assessment year 1983-84.
