Prior to 01/04/2022, excess charitable expenditure from earlier years can be set off against subsequent year income u/s 11(1)(a), constituting application in adjustment year; no Form 9A required; amendment prospective.

ORDER

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instant of the assessee is directed against the order of ld. Addl/JCIT(A)-7, Kolkata dated 2.4.2025 vide DIN and Order No. ITBA/APL/S/250/2025-26/1075426187(1) passed u/s. 250 of the Income Tax Act, 1961 (in short “the Act”) for the AY 2017-18.

2. The Assessee has raised the following grounds of appeal: -

3. At the outset, the ld. A.R. of the assessee submitted that there is a delay of 21 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention on an application for condonation of delay dated 21.7.2025, which is reproduced below for ease of reference and record:

3.1. On going through the above application for condonation, we find that the assessee could not file the appeal within the prescribed period for the reason that the assessee’s counsel took time to analyze and take steps for further course of action & hence, there is a delay. The ld. A.R. also submitted that the delay is unintentional and no benefit can be attributed to the assessee in filing the appeal belatedly. He thus prayed to condone the delay and requested to consider the issues raised by the assessee on merits.

3.2 Perused the record and having heard ld. Counsel for the assessee as well as the ld. D.R., it is perceived that the explanation offered in the application dated 21.07.2025 is plausible and sufficient cause being shown by the assessee, which prevented them from filing the appeal within the prescribed period and accordingly, we inclined to condone the short delay of 21 days and admit the appeal for adjudication on merits.

4. Now the brief facts of the case are that the assessee trust being registered u/s 12A of the Act filed its return of income for the assessment year 2017-18 on 14.9.2017 declaring total income of Rs. Nil. The said return was thereafter processed and accordingly intimation u/s 143(1) of the Act was passed on 16.3.2019 disallowing a sum of Rs.76,29,084/- on the ground that the assessee had claimed exemption under “Amount deemed to have been applied to charitable purposes in India during the previous year as per clause (2) of explanation to section 11(1)” but did not exercised his option by e- filing Form-9A before due date as per Rule-17 of the Income Tax Rules.

4.1 The AR of the assessee by way of written submission stated that the assessee trust filed its return of income disclosing gross receipts of Rs.1,73,68,412/- and claimed application of Rs.86,31,373/- towards the revenue expenditure and Rs.11,07,955/- towards the capital expenditure. It is submitted that the entire surplus of Rs.76,29,084/- was inadvertently claimed as amount deemed to have been applied to charitable or religious purposes in India during the previous year as per clause (2) of explanation to section 11(1) of the Act. The assessee trust should have claimed deduction on account of permissible amount of accumulation or set apart for application to charitable or religious purposes to the extent it does not exceed 15% of income derived from property amounting to Rs.26,05,262/- & therefore, the Form No.9A had to be filled for the balance amount of Rs.50,23,822/- [Rs.76,29,084 (-) Rs.26,05,262]. It is also submitted that since the assessee was not aware and was not suggested about the new compliances of filing Form 9A, the assessee could not file the Form 9A along with the return of income. The assessee on becoming aware of the fact also filed an application for condonation of delay in filing form 9A on 20/04/2021 along with the copy of Form 9A, however the ld. CIT(E) rejected the condonation application vide order dated 04/01/2024.

4.2 Without prejudice, the assessee submitted that the sur