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Issues involved: Interpretation of accumulation of income for multiple purposes by a trust.
Summary: The High Court of Delhi, in a judgment delivered by T. S. Thakur J., addressed the appeal challenging the decision of the Income-tax Appellate Tribunal regarding the accumulation of income by a trust for various purposes. The Tribunal had allowed the accumulation based on a Division Bench decision of the court. The Revenue argued that the accumulation was made for six out of 22 objects for which the trust was established, including publication of books, providing monetary assistance to educational institutions, establishing schools and libraries, and acquiring property. The Revenue contended that allowing accumulation for acquisition of property without specifying the purpose was incorrect. The Court disagreed with the Revenue's contention, stating that the trust had accumulated income for six charitable purposes, five of which were undisputedly charitable. The criticism was focused on the sixth purpose, which allowed acquisition of property for other charitable objects of the trust. The Court clarified that the reference to any purpose of the society for acquisition of property must align with the charitable objects specified in the trust's memorandum. It was emphasized that the accumulation for property acquisition should be limited to purposes listed in the memorandum, not additional purposes the trust may have in mind. Ultimately, the Court found no merit in the appeal, as it did not raise any substantial legal question for consideration. The appeal was dismissed, upholding the Tribunal's decision on the permissibility of accumulating income for multiple charitable purposes by the trust.
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