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TMI Blog1979 (2) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... admanabhaswami Temple Trust, Trivandrum, is a charitable and religious trust. The previous year is the year ended March 31, 1971. The controversy revolves round the question whether the trust whose objects are admittedly charitable within the meaning of s. 2(15) of the Act, was entitled to the exemption conferred by s.11 of the I.T. Act, as it stood at the relevant time. The material part of the section as it stood at the relevant time read as follows : " (2) Where any income referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section is not applied or is not deemed to have been applied to charitable or religious purposes in India during the previous year but is accumulated, or finally set apar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 36." This section allows certain income to be not included in the total income of the previous year subject to certain conditions being satisfied. One of the conditions is that the assessee specifies by notice in writing to the ITO " in the prescribed manner " the purpose for which the income is being accumulated and the period for which the income is to be accumulated. By definition the expression " prescribed " means prescribed by Rules. That should turn our attention to the relevant rule, which is r. 17. That rule reads: " Notice for accumulation of income by charitable or religious trusts.-- The notice to be given to the Income-tax Officer under sub-section (2) of section 11 shall be in Form No. 10 and shall be delivered to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the Post Office Savings Bank (including deposits made under the Post Office (Time Deposits) Rules,1970), or a banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act), or a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); or (iii) deposited in an account with a financial corporation which is engaged in providing long-term finance for industrial development in India and which is approved by the Central Government for the purposes of clause (viii) of sub-section (1) of section 36. 3. Copies of the annual accounts of the trust along with det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een ruled that the time element incorporated in Form No. 10 in the matter of investment of the accumulated amounts in Government securities or Post Office Savings Banks, etc., is ultra vires the provisions of the section and the rule (vide Second ITO v. M. C. T. Trust [1976] 102 ITR 138--- decided by the Madras High Court--and CIT v. Shri Krishan Chand Charitable Trust [1975] 98 ITR 387--decided by the Jammu and Kashmir High Court). We are in complete agreement with the principle of these two decisions. Even apart from these decisions, on the terms of the section and the rule, in the light of the principle expounded by the Supreme Court decision, which we have noticed, we are clearly of the opinion that the provision of a time element in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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