Foundation For Universal Responsibility of His Holiness The Dalai Lama Vs ITO (ITAT Delhi)
ITAT Delhi: 115BBI Adjustment Deleted — Pre-2022 Accumulations Still Enjoy 6-Year Utilization Window
In this appeal, Assessee, a trust registered u/s 12A, challenged the adjustment of ₹1,38,45,266 made by CPC u/s 143(1) treating accumulated amounts of FY 2016-17 & FY 2017-18 as deemed income u/s 115BBI on the ground of non-utilization within five years. CIT(A) upheld the adjustment by applying the amendment made by Finance Act 2022 to s.11(3)(c), which removed the sixth-year grace period.
Tribunal observed that the amendment is prospective, applicable only from AY 2023-24 onwards to fresh accumulations, not to accumulations made in earlier years. Relying on the detailed decision of ITAT Mumbai in Dadar Digamber Jain Mumukshu Mandal (176 taxmann.com 661) & Pune Bench ruling in YCMOU, Tribunal held that accumulations pertaining to FYs 2016-17 & 2017-18 continue to enjoy the earlier regime of 5 years + 1 grace year. Since Assessee utilized the accumulations within the permissible sixth year—i.e., by 31.03.2023 & 31.03.2024 respectively—no addition could be made.
Tribunal further held that such a debatable issue cannot be adjusted while processing a return u/s 143(1). Accordingly, the adjustment made by CPC was deleted & the appeal was allowed in full.
