2009 (6) TMI 694 - AT - Income Tax

Summary

Issues:
1. Whether the assessee trust is entitled to accumulation of income under section 11(2) of the Act.
2. Whether the purposes mentioned in Form No. 10 for accumulation of surplus amount were specific.

Analysis:
Issue 1:
The revenue appealed against the order of the learned CIT(A)-V, Bangalore, for the assessment year 2005-06, raising concerns about the charitable activities of the assessee trust. The revenue argued that since only a small amount was spent on charitable activities out of the total collection, accumulation under section 11(2) without specific purposes should not be allowed. The Assessing Officer rejected the claim for exemption under section 11, treating the unspent amount as income from other sources. The CIT(A) disagreed with the Assessing Officer, citing relevant case laws and observing that all conditions for accumulation were fulfilled, and the trust's objects were for charitable purposes. The CIT(A) concluded that the assessee trust was entitled to accumulation under section 11(2) of the Act.

Issue 2:
The crux of the issue revolved around whether the purposes mentioned in Form No. 10 for accumulation of surplus amount were specific. The revenue contended that the purposes listed were a reproduction of the trust deed objects and not specific, citing a case from the Hon'ble Calcutta High Court. However, the learned Authorised Representative argued that the trust's objects were clear, and the accumulation was for legitimate charitable activities. The CIT(A) analyzed the trust's objects and Form No. 10, finding that the purposes specified were within the trust's objectives. Relevant case laws were cited to support the argument that specificity beyond the trust's objects was not necessary for accumulation under section 11(2). Ultimately, the Tribunal confirmed the CIT(A)'s decision, dismissing the revenue's appeal.

In conclusion, the Appellate Tribunal upheld the decision that the assessee trust was entitled to accumulate income under section 11(2) of the Act, and the purposes mentioned in Form No. 10 were considered specific within the trust's charitable objectives. The Tribunal's ruling favored the assessee trust, dismissing the revenue's appeal.