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TMI Blog2024 (1) TMI 1180X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Self-esteem (v) Group skill, support services and associated support services (vi) Income generating schemes and (vii) Advancement of any other, social welfare objective. According to AO, the assessee had not applied 85% of the income but has accumulated income u/s 11(2) for the purpose of Basic Education, Health Care and Nutrition to Underprivileged children which reason for accumulation, according to him, was not for a specific purpose, and instead was only a reiteration of the broad objectives of the trust - We note that assessee Trust while making a claim for accumulating income as per sub-section (2) of section 11 of the Act, has fulfilled the conditions prescribed therein by filing the Form 10 wherein the assessee has spelled out the purpose for accumulation as Basic Education, Health Care and Nutrition to Underprivileged children which we find is in consonance with the purpose/object of the trust itself. Therefore, according to us, the claim for accumulation u/s 11(2) of the Act cannot be denied to assessee. As decided in the case of Hotel and Restaurant Association ( 2003 (3) TMI 92 - DELHI HIGH COURT ), held that even though it is true that specification o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income on 17.10.2016 declaring total income of Rs. 11,83,030/-. The AO notes that the assessee is a public charitable trust registered u/s 12A of the Act vide registration No.TR/32671 dated 11.07.1996 and also with Charity Commissioner. The AO noted the object of the assessee trust inter-alia as Healthcare, Nutrition, Literacy and Basic Education to rag picking/street children in Mumbai, functioning from two (2) classrooms in Vakola Municipal Schools. The AO noted that the assessee had shown gross receipts of Rs. 69,49,289/- and has offered towards the object of the trust a sum of Rs. 18,83,357/- out of which it has spent only a sum of Rs. 15,99,351/- for educational activities. According to the AO, as per section 11(1)(a) of the Act, the assessee had to apply 85% of gross receipts towards the object during the relevant year. But has utilized only 10% of the gross receipt and accumulated 75% of the gross receipt (Rs.30 Lakhs) u/s 11(2) of the Act by filing Form 10. According to the AO, the purpose for the accumulation of income as shown in Form-10 was Basic Education, Health Care and Nutrition to Underprivileged children , which is not for a specific purpose and instead was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed five years; b. the money so accumulated or set apart is invested or deposited in the forms or modes specified in sub-section (5); c. the statement referred to in clause (a) is furnished the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year. 5. According to the Ld. Sr. Counsel, the assessee has fulfilled the condition as prescribed u/s 11(2) of the Act i.e conditions enumerated under clause (a), (b) (c) (supra). According to the Ld. Counsel merely because assessee has stated the purpose for which the income is being accumulated as Basic Education, Health Care and Nutrition to Underprivileged children , the Ld. CIT(A) could not have upheld the action of the AO. To bolster his contention, the Ld. Sr. Counsel referred to the judgment of the Hon ble Delhi High Court in the case of CIT Vs. Hotel and Restaurant Association (261 ITR 190) wherein the Hon ble Delhi High Court in similar case framed the question of law as under: - A. A. Whether, on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the view taken by the Commissioner (Appeals). It has also noticed that the assessed had applied the accumulated income for achieving its object. Hence, the present appeal. 5. We have heard Mr. R.D. Jolly, learned senior standing counsel for the Revenue, Mr. Jolly submits that the appellate authorities have failed to appreciate that in the prescribed form the assessed had failed to indicate the specific purpose for which the income was sought to be accumulated and, therefore, the statutory requirement had not been strictly complied with, disentitling the assessed from relief under Section 11(2) of the Act. 6. We do not agree. It is true that specification of certain purpose or purposes is needed for accumulations of the trust's income under Section 11(2) of the Act. At the same time the purpose or purposes to be specified cannot be beyond the objects of the trust. Plurality of the purposes for accumulation is not precluded but it depends on the precise purpose for which the accumulation is intended. In the present case, both the appellate authorities below have recorded a concurrent finding that the income was sought to be accumulated by the assessed to achieve the objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is hereby dismissed. 8. The Ld. Sr. Counsel also cited the decision of the Hon ble Delhi High Court in the case of DIT(E) v Nbie Welfare Society (2015) 370 ITR 490 (Del) wherein the Hon ble High Court has framed the question of law as under: - Whether the ITAT was correct in holding that by mentioned (sic. mentioning) Further utilization in Form No. 10 read with Rule 17 of the Income Tax Rules, 1962 the Assessee has fulfilled its obligation as required under Section 11 (2) of the Act'. 9. And the Hon ble Delhi High Court while answering the question of law has also referred to the decision of the Hon ble Calcutta High Court in the case of DIT(E) v Trustees of Singhania Charitable Trust (1993) 199 ITR 819 (Cal) which was cited by Ld. CIT(A) in the impugned order in order to uphold the action of the AO; and the Hon ble High Court (supra) has distinguished on the facts the decision in Trustees of Singhania Charitable Trust (supra), wherein that charitable trust had as many as eighteen (18) objectives and there was no specific objective for which accumulation had been sought, and thus distinguished that case law; and the Hon ble Delhi High Court followed the judicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member till the age of retirement with a minimum period of 5 years. (b) A lumpsum payment of Rs. 15,000/- shall be made to the nominee of the deceased member in addition to the benefit referred above (ii-a) if the member dies during the period of service in the bank. Other benefits are also there which are in case of retirement and these have been given in part B of this scheme to the extent that a sum of Rs. 500/- per month shall be paid to the members as per calculation given in the same. Further, other benefits in the cases of death and permanent disability have also been given. Lastly, benefit have been given on resignation from bank prior to the retirement. The contention of the learned counsel is that this is the only object of the assessee and there are no plurality of the objects and as such if the assessee had mentioned in form no. 10 that the accumulation of the funds w0ere for further utilization the very purpose is to utilize the amount of accumulation for further benefits to be given to the members in the case of death, retirement, permanent disability ' 10. Other benefits which were specified in part (b) of the Scheme, which stipulated that a sum of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY. 2017-18 3906695 586004 3320691 2546185 892033 775000 AY. 2018-19 4021910 603287 3418624 2526591 2562332 530000 AY. 2019-20 8915851 1337378 7578474 5016142 2562332 3000000 AY. 2020-21 4660578 699087 3961491 3482837 478654 500000 AY. 2021-22 5039796 755969 4283827 3413125 870702 900000 AY. 2022-23 3774910 566237 3208674 3864102 -655429 3000000 AY. 2023-24 3583555 537533 3046022 4370325 -1324303 2850000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,357/-. According to AO, the assessee had not applied 85% of the income but has accumulated income of Rs. 30 Lakhs u/s 11(2) of the Act for the purpose of Basic Education, Health Care and Nutrition to Underprivileged children which reason for accumulation, according to him, was not for a specific purpose, and instead was only a reiteration of the broad objectives of the trust. According to AO, this general purpose cannot satisfy the requirement of section 11(2) of the Act read with Rule 17 of the Rules. According to AO, accumulation of income u/s 11(2) of the Act must be for heavy outlay of expenses and therefore he disallowed the same. On appeal, the Ld. CIT(A) confirmed the action of AO after citing the decision of the Hon ble Calcutta High Court in the case of Director of Income Tax v Trustees of Singhania Charitable Trust (1993) 199 ITR 819 (Cal) and the decision of the Hon ble Punjab Harayana High Court in the case of Maharaja Ranjit Singh War Museum v CIT order dated 20.03.2020 (ITA. No.259 of 2019). 13. We do not countenance the action of the Ld. CIT(A). We note that assessee Trust while making a claim for accumulating income to the tune of Rs. 30 Lakhs as per sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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