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2009 (12) TMI 50 - HC - Income TaxAccumulation of income u/s 11(2) Charitable Trust - purpose of accumulation of the income - The assessing officer while deciding the application of income in Form No.10 was of the opinion that the purpose of accumulation mentioned therein are vague and not specific and hence declined the benefit of accumulation under Section 11(2) of the Act by following the decision of the jurisdictional High Court in the case of CIT Vs. M.Ct.M.Chettiar Family Trust 2008 -TMI - 14945 - MADRAS High Court held that - , the assessee was allowed to adduce fresh evidence to show the specific purpose for which the trust requires accumulation of the income - the order of the Tribunal is hereby set aside and the matter is remitted back to the assessing officer
Issues Involved:
1. Appeal under Section 260-A of the Income Tax Act against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, dated 20.7.2007. 2. Interpretation of conditions for availing the benefit of accumulation of income under Section 11(2) of the Income Tax Act. 3. Requirement of specifying purposes for accumulation of income under Section 11(2) of the Income Tax Act. 4. Validity of reasons stated in Form 10 for accumulation of income. Detailed Analysis: Issue 1: The appeal was filed against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, dated 20.7.2007. The substantial questions of law formulated included the interpretation of conditions for availing the benefit of accumulation of income under Section 11(2) of the Income Tax Act. The Tribunal's decision was challenged by the revenue, leading to the present appeal. Issue 2: The case involved a Charitable Trust filing its return of income for the assessment year 1997-98 under Section 11 of the Income-tax Act. The Trust applied for accumulation of income under Section 11(2) for contributions to poor feeding and charity donations. The assessing officer rejected the application citing vagueness and lack of specificity in the purposes mentioned in Form 10, following a precedent. The Trust contended that the purposes specified were valid and charitable in nature, managed by the Administrator General and Official Trustee of Tamil Nadu. Issue 3: The Tribunal's decision was based on a previous case where it allowed the appeal filed by the Department regarding accumulation of income. The counsel for both parties referred to a decision of the Court in a similar case involving the specification of purposes for accumulation of income. The Court observed the need for specifying purposes clearly in Form 10 and remanded the matter back to the assessing officer for proper consideration, emphasizing the importance of clarity in purpose specification. Issue 4: Considering the submissions made by both counsels, the Court set aside the Tribunal's order and remitted the matter back to the assessing officer in line with the directions given in a previous case. The Court emphasized the importance of proper purpose specification in Form 10 for accumulation of income under Section 11(2) of the Income Tax Act. The tax case was disposed of accordingly, with the connected miscellaneous petition closed. This detailed analysis covers the interpretation of legal issues and the Court's decision in the judgment, providing a comprehensive understanding of the case.
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