Finance Act 2022 Amendment to Sec.11(3) Prospective – ITAT Ahmedabad Allows 6th Year Utilization

Sarangpur Talia’s Pole Punch Trust Vs ITO (Exemption) (ITAT Ahmedabad)

Background

• Assessee: Sarangpur Talia’s Pole Punch Trust (public trust).
• Issue: Exemption u/s 11 denied in respect of ₹2,00,000 accumulated income u/s 11(2).
• CPC disallowed, holding that accumulation from FY 2016-17 had to be used within 5 years (i.e., by FY 2021-22).
• Since spent only in 6th year (FY 2022-23), CPC taxed it u/s 115BBI @ 30%.
• Demand raised: ₹78,660.
• CIT(A) confirmed disallowance.

Assessee’s Arguments

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