9911796707
TMI Blog2004 (8) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... the nil income. During the course of scrutiny, the AO noted that the receipts of the assessee consisted of interest and dividend on various investments. He also noted that a sum of Rs. 1,50,100 has been spent on making charities. He also noted that a sum of Rs. 2,47,000 has been transferred and accumulated at charity fund. The assessee also filed Form No. 10 along with the return. In the Form No. 10, the accumulated amount was mentioned at Rs. 1,50,100, whereas the amount sought to be accumulated was Rs. 2,47,000. When the assessee was questioned about the same, it was stated that it was only a typographical error. It was in this connection the assessee also drew the attention of the AO towards column No. 5 of the return in which the figure of Rs. 2,47,000 was mentioned. The AO also noted that in Form No. 10, the purpose for accumulation of funds was mentioned as under: "for the purpose of advancement of education, medical relief to poor and/or any other object of general public utility". 4. The AO observed that by Taxation Amendment Laws, 1975, applicable from 1st April, 1976, s. 11(1)(a) was amended putting restriction on the accumulation of funds and limiting the same to 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that vide resolution of the managing council, dt. 12th Aug., 1993, the following purpose for accumulation was mentioned: "Resolved that out of surplus in the income and expenditure account of the foundation for the year ended 31st March, 1993, a sum of Rs. 2,47,000 be accumulated and set apart for a period of not more than 10 years for the purpose of advancement of education/medical relief/relief to poor and/or other objects of general public utility and Rs. 1,29,881 be transferred to general funds of the foundation". The learned counsel stated that in the resolution itself it was made clear that the accumulation of income was made for the specific purpose of advancement of education, medical relief/relief to poors and other objects of general public utility. He also stated that the reliance on the decision of the Hon ble Calcutta High Court in the case of Trustee of Singhania Charitable Trust was not justified as in that case, the institution had many objects. He stated that, for example, the purposes of that institution were the following: 1. To assist, finance, support, fund, establish and maintain any institution meant for the relief of the poor, advancement of education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulated income of the previous year is left to be dealt with, and to be considered for the purpose of income-tax exemption, sub-s. (2) of s. 11 can be pressed into service. The learned counsel, therefore, argued that the learned CIT(A) was not justified in disallowing the claim of the assessee. On the other hand, the learned Departmental Representative supported the order of the learned CIT(A). 5. We have considered the rival submissions. From the order of the learned CIT(A) it was clear that the claim of the assessee has been denied merely on the ground that in the managing council s resolution the specific purpose for which the accumulation was being made was not mentioned. For this purpose, the learned CIT(A) has relied on the decision of the Hon ble Calcutta High Court in the case of Trustee of Singhania Charitable Trust. But while doing so, the learned CIT(A) omitted to consider a very vital fact that in the case of Trustee of Singhania Charitable Trust, there were many objects. It was not specific as to for which object the income was being accumulated. We have also verified the object of that institution and the purpose for the accumulation of income as given in Form No. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. In the result, the appeal directed by the assessee is allowed. 7. Now, we will take up the appeal directed against the order under s. 154 of the Act. 8. Briefly, the facts of the case are that the assessee is a public charitable trust, whose income is exempt under s. 11 of the Act. When it filed the return of income, the entire income of Rs. 5,27,488 was claimed exempt under s. 11 of the Act. The return was processed under s. 143(1)(a) of the Act on 31st March, 1994, and the claim of the assessee was accepted. However, subsequently, the AO noted that the assessee has accumulated a sum of Rs. 2,47,000 and applied for permission in Form No. 10 for accumulation of Rs. 1,50,100 only. Since the assessee accumulated funds in excess of 25 per cent of the gross receipts, the notice under s. 154 was issued by the AO requiring it to explain as to why the income be not brought to tax because it has not complied with the provisions of the Act. The AO observed that in Form No. 10 seeking permission for accumulation of income, the assessee has not mentioned the specific purpose for which the accumulation was being made. He, therefore, held that in the intimation under s. 143(1)(a), an a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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