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TMI Blog1975 (10) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... o understand the nature of the controversy between the assessee and the Department the provisions of s. 11 will have to be adverted to. Sec. 11(1)(a) exempts the income of a charitable trust to the extent it is applied for charitable purposes. It also says that 25 per cent for the income or Rs. 10,000 (which ever is higher figure) would also be exempt if it is accumulated for charitable purpose. Then, in respect of the income not spent for charitable purposes but accumulated. Sec. 11(2) provides an exemption. In order to avail of this exemption the trustees should by a notice given in writing to the ITO in the prescribed manner specify the purpose and the period for which the income is accumulate and such monies should be invested in Govt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -71 the corresponding figures were Rs. 2,23,558 Rs. 2,10,500, and Rs. 67,500. In respect of the Padmanabhaswani Temple Trust, out of the unspent balance of Rs. 2,50,337 the assessee invested in Fixed Deposits with Banks Rs. 2,22,120 within four months of the end of the accounting year and Rs. 28,000 after the period of four months from the end of the accounting year, the total investments in securities being Rs. 2,50,120. 4. In respect of Sir Rama Varma Maharaja of Travancore Trust and Marthanda Varma Elayaraja of Travancore Trust the ITO held that the entire income for both the years will be exempt. The CIT, however, under s. 263 held that the order of the ITO was erroneous and he set aside those orders with a direction to the ITO to mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention put forward by Shri Sreenivasan. Under s. 11(1)(a), the amount accumulated for application to charitable purposes in India is exempt only to the extent to which it is not in excess of 25 per cent of the income from property held under trust or Rs. 10,000 whichever is higher. If the accumulation exceeds 25 per cent (the other alternative limit of Rs. 10,000 is not applicable here) the excess is not entitled to exemption and is liable to tax. Sec. 11(2), however, provides that this restriction viz., that the amount accumulated should not exceed 25 per cent of the income, will not apply if the conditions laid down in sub-cl. (a) and sub-cl. (b) are satisfied. Sub-cl. (b) requires that the "money so accumulated or set apart" should be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an accumulation of 25 per cent or Rs. 10,000 whichever is higher, it will not be included in the taxable income. Sec. 11(2) further liberalizes and enlarges the exemption. They proceeded to observe as under :— "A combined reading of both the provisions quoted above would clearly show that s. 11(2) while enlarging the scope of exemption removes the restriction imposed by s. 11(1)(a) but it does not take away the exemption allowed by s. 11(1)(a). In my opinion, where a statute, particularly a taxing statute, confers a concession by one particular provision in the statute and then further liberalizes and enlarges that concession by another provision in that statute, then the concession granted by the earlier provision cannot be deemed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT. We will, therefore, hold that the assessees would be entitled to the exemption and it is enough if they invest in government securities that part of the unspent balance which is over and above 25 per cent of the total income for which exemption is provided under s. 11(1)(a) itself. 8. We would add one more reason. A reading of s. 11(2)(b) would show that the word used there is not 'income' but money so accumulated'. The word 'money' has not been used in s. 11(1)(a) at all. The money so accumulated is referable only to the immediately prior clause i.e., 11(2)(a) which uses the expression 'income accumulated or set apart". The words "accumulated or set apart" are repeated in cl. (b) and so the word 'money' referred to in cl. (b) i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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