The Income Tax Appellate Tribunal, Delhi Bench, dismissed the appeal filed by the Revenue and allowed the cross-objection of the assessee, holding that the unutilised accumulated funds pertaining to Assessment Year 2009-10 could not be brought to tax in Assessment Year 2015-16 where the assessee was prevented from utilising the funds due to an injunction order passed by the Hon’ble Delhi High Court. The Tribunal noted that the assessee, a registered charitable society enjoying exemption under Sections 12A, 10(23C), and 80G of the Act, had accumulated funds for construction of hostel facilities and had made substantial payments towards acquisition of property, stamp duty, and court deposits, but could not complete utilisation due to disputes and pending litigation. The Tribunal further held that the assessee was entitled to set off excess application of expenditure over income of earlier years against the alleged unutilised accumulation in view of the binding decision of the Hon’ble Delhi High Court in CIT (Exemptions) v. Subros Educational Society, which stood affirmed by the Hon’ble Supreme Court. It was observed that once such set-off is allowed, no taxable income survives for the year under consideration, thereby vitiating the very assumption of jurisdiction under Section 147 of the Act. Accordingly, the Tribunal upheld the order of the CIT(A) deleting the addition and held the reopening of assessment to be unsustainable in law.


SOURCE LINK

https://itat.gov.in/public/files/upload/1768196443-4SjZmh-1-TO.pdf

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