Unregistered educational trust assessed as an AOP may claim set-off of brought-forward excess expenditure, tribunal holds

5-Second Takeaway

An unregistered educational trust assessed as an association of persons may claim set-off of brought-forward excess expenditure against current-year income. The Commissioner’s revisionary disallowance, made solely because the trust lacked registration under section 12A or section 10(23C), was therefore unjustified.

The dispute concerned whether the assessee could set off excess expenditure carried forward from earlier years against its income for the year under consideration. The trust was not registered under section 12A and was also ineligible for exemption under section 10(23C)(iiiad) because its annual receipts exceeded the statutory limit.

Even so, the assessee had been assessed as an association of persons. On that footing, it was entitled to the ordinary benefits available under the Act, including the statutory provisions governing carry forward and set-off.

The revisionary authority had disallowed the claim only on the basis that the assessee lacked registration under section 12A or section 10(23C). The published holding rejects that approach, stating that registration status alone did not justify denial of set-off where the assessee was assessed as an association of persons.

The appeal was allowed, and the Assessing Officer was directed to allow the set-off, subject to compliance with section 72.