Assessee, a charitable trust registered under section 12A, claimed exemption under section 11(1)(a) for ` 27,05,219 [15% of total income] as accumulated\/set-apart funds, despite incurring total expenditure of ` 4,88,80,927 against receipts of ` 1,80,34,791. AO disallowed the claim, reasoning that the assessee had no surplus to justify accumulation. Assessee argued that the excess expenditure was met from accumulated funds of earlier years and the 15% set-apart under section 11(1)(a) was unconditional. Section 11(1)(a) permits accumulation of up to 15% of income irrespective of whether current-year expenditure exceeds receipts. A charitable trust cannot be denied exemption under section 11(1)(a) merely because it utilised accumulated funds to cover excess expenditure. The provision is unambiguous and does not require a surplus in the relevant year for the 15% set-apart. Accordingly, the assessee’s claim was valid. (AY. 2016-17)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 11 : Property held for charitable purposes-Excess expenditure over income-Accumulation of income-Applied charitable purpose-Denial of exemption is not valid. [S.11(1)(a), 12A] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-61299","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fWH","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61299","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=61299"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61299\/revisions"}],"predecessor-version":[{"id":61300,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61299\/revisions\/61300"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=61299"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=61299"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=61299"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}