Dismissing the appeal of the revenue the Court held that expenses incurred in earlier years which are adjusted against income earned by trust in subsequent year will have to be regarded as application of income of trust for charitable and religious purposes in subsequent year. A trust can bring forward and set off expenses of earlier years as application of income in subsequent year. (AY. 2013-14)
PCIT v. Karnataka Jesuit Educational Society (2021) 281 Taxman 478 (Karn.) (HC)
S. 11 : Property held for charitable purposes – Application of income – Expenses of earlier years can be adjusted against income earned in subsequent year . [ S. 11(4) ]