Section 11, 12 of Income Tax Act, 1961—In the instant case, solitary ground of revenue is against allowing set off of excess expenditure of earlier years amounts to application for the purpose of section 11 of the Act.

Held that—The assessee is a trust for religious purposes & involved in the activity of running hospitals and several charitable activities. The assessee’s trust has been applying more income towards its object then its income earning for the last several years. It is also noticed that the ld.CIT(A) has placed reliance on the judgment of various High Courts including the judgment of jurisdictional High Court of Gujarat, as elaborated (supra) in this order ld.CIT(A) wherein it was held that there is nothing in section 11(1)(a) of the Act, which shall indicate that the expenditure incurred in the earlier years cannot be met out of the income of the subsequent years can be carry forward. We have noticed judgment of various High Courts including jurisdictional High Court wherein the identical issue has been decided in favor of the assessee. After considering the above and judicial pronouncements mentioned in the decision of the ld.CIT(A), we are of the view that the assessee trust is entitled to set off of excess expenditure of earlier years in subsequent assessment years as application of income.
Appeal of revenue dismissed[INCOME TAX OFFICER VERSUS SHREE AMBIKA NIKETAN TRUST] [2018] [7] [ITCD Online] [45] [ITAT AHMEDABAD]