ORDER

Per Smt. Beena Pillai, JM:

The present appeal filed by the revenue arises out of the order dated 25/08/2025 passed by the Ld. Commissioner of Income Tax, (Appeals) Addl./JCIT (A)-7 Kolkata [hereinafter the “Ld.CIT(A)”] for A.Y. 2015-16 on following grounds of appeal:-

1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 29,04,39,083/- made as per intimation u/s. 143(1) of the Act by holding that the assessee was entitled to utilize the accumulation made u/s 11(2) of the Act during AY 2017-18 in AY 2023-24 (the 6th year), despite the express amendment made by Finance Act, 2022 to section 11(3) of the Act with effect from AY 2023-24 withdrawing the benefit of utilization in the sixth year.

2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the amendment to section 11(3) made by the Finance Act, 2022 could not apply to accumulations made in AY 2017-18, though the assessment year in question is AY 2023-24, which is expressly covered by the amended law and governs the taxability of accumulations remaining unutilised as on that year.

3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred by ignoring that the action of CPC in deeming such unutilised accumulation as income for A.Y. 2023-24 is strictly within the framework of the law and does not impose any retrospective burden on the assessee.

4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in applying the doctrine of "impossibility of performance" to override the clear statutory mandate of section 11(3) of the Act as amended, particularly when the amendment to section 11(3) made vide the Finance Act, 2022 expressly applied in relation to Assessment Year 2023-24 and subsequent Assessment Year as per the memorandum to Finance Act, 2022.

5. The appellant craves leave to add, amend, alter vary and/or withdraw any of the grounds of appeal.”

2. The assessee is a charitable trust registered with the Charity Commissioner, Mumbai and also registered u/s 12A of Act. It is engaged in the field of medical relief and runs “Holy Spirit Hospital” at Andheri (East), Mumbai, a 300-bed multi-specialty hospital catering to a large population. The assessee provides free and concessional medical facilities to economically weaker sections and also operates community health centres and a nursing institute.

2.1. For the year under consideration, the assessee filed its return of income within the prescribed time declaring total income of Rs. 35,94,350/- after claiming exemption u/s 11 of the Act. The assessee also furnished audit report in Form 10B and exercised the option for accumulation of income by filing Form 9A u/s 11(1) and Form 10 u/s 11(2) of the Act. The return of income was processed by CPC u/s 143(1) of the Act, wherein total income was determined at Rs. 29,40,33,430/- by making addition u/s 11(3) of the Act in respect of accumulation of earlier years alleged to have remained unutilised within the prescribed period.

3. Aggrieved by the said adjustment, the assessee preferred appeal before the Ld. CIT(A).

3. The Ld. CIT(A) deleted the addition by holding that the assessee was entitled to utilise the accumulation made u/s 11(2) of the Act relating to A.Y. 2017-18 even in the sixth year i.e., A.Y. 2023-24, and further held that the amendment brought in by the Finance Act, 2022 to section 11(3) of the Act would not apply to such past accumulations.

Being aggrieved by the relief granted by the Ld. CIT(A), the Revenue is in appeal before this Tribunal.

4. The Ld. DR vehemently supported the order passed by the CPC u/s 143(1) of the Act and submitted that the same is in accordance with the statutory provisions governing charitable trusts. It was submitted that, the assessee accumulated income in A.Y. 2017-18 u/s 11(2) of the Act, which was required to be utilised within the prescribed period as per law.

4.1. The Ld.