9911796707
TMI Blog2007 (1) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... xing the income at Rs. 20,97,720 instead of nil disclosed by rejecting the appellant's claim of accumulation of income under s. 11(2) of the Act made through. II. On the facts and in the peculiar circumstances of the present case specially keeping in view the written submission, the learned CIT(A) was not at all justified in rejecting the claim of the appellant of accumulation of the surplus under s. 11(2) as stated in Form No. 10 filed along with the return and/or as tiled in the course of assessment proceedings, only for the reason that inadvertently the appellant instead of stating that the income is being accumulated for a period five years which stood stated ten years, and so the order of the CIT(A) be set aside and the appellant all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jects of the society is to manage and organise education for physical, mental, social and moral development and overall development of students. During the assessment year under consideration, the assessee society has received following funds: Interest Rs. 2,88,987 Donation Rs. 29,82,756 Tuition fee Rs. 24,300 ------------- Rs. 32,96,043 ------------- After application of funds to charitable purposes, the assessee has shown surplus of Rs. 25,92,128 out of which Rs. 4,92,128 treating 15 per cent of total receipts of Rs. 32,96,043 has been added to surplus fund in view of provision of s. 11(1) and Rs. 21,00,000 (Rs. 20,97,720 as per AO) has been claimed as set apart in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to technical mistake, ten years' period for application of accumulated fund was passed in meeting held on 24th June, 2003 instead of five years as allowed by the IT Act. The assessee also assured the AO that Rs. 21,00,000 will be applied for construction of school building before expiry of five years i.e. 31st March, 2008. The assessee also furnished a copy of resolution of meeting held on 17th Jan., 2006 wherein it was resolved that the accumulated fund will be applied within five years instead of ten years. The AO did not accept the above explanation of the assessee stating that the period of ten years has been deliberately decided by the assessee through resolution passed on 24th June, 2003. According to the AO, a new resolution passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period for which accumulation shall be made. It is relevant to state that the period for accumulation of income before 1st April, 2001 was ten years and the period of ten years has been revised by five years after 1st April, 2001. Shri Kanchan Kaushal, learned counsel for the assessee submitted that by oversight, the assessee society resolved that accumulation of income shall not exceed ten years instead of five years. In our view, the lower authorities have failed to appreciate that the period of ten years was mentioned in Form No. 10 inadvertently, which was duly rectified by a resolution passed on 17th Jan., 2006. The period of five years, as amended w.e.f. 1st April, 2001, had still not expired upto 31st March, 2008, and the society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olution dt. 17th Jan., 2006 resolving that the assessee society will utilise the accumulated funds within a period of five years which lapses on 31st March, 2008. The contention of the Department is that the assessee failed to submit any other notice in Form No. 10 before the expiry of time allowed under s. 139(1) of the Act. It is also submitted by the learned Departmental Representative that there was no explanation on the side of the assessee that any other Form No. 10 was filed after original Form No. 10 filed on 1st Dec., 2003 and was duly condoned by CIT(A) in view of Circular No. 273, dt. 3rd June, 1980. In our view, there is no merit in the above contentions of the Department. While holding so, we are fortified by the decision of Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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