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TMI Blog2024 (10) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... l lacuna in compliances as such Trust is not being advised by the top available Professionals in day-to-day affairs and routine compliances. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. We find the purpose for which the amount was claimed to be accumulated or set apart mentioned in the Form No. 10 of the AY 2016- 17 To be applied to promote and support research scientists for the advancement of research and development in future as specific and categorical and thus, we are inclined to interfere with the finding of the CIT(A) in this regard. Accordingly, we order so and allow the appeal of the AY 2016-17 with the direction to the AO to allow the consequential benefit under section 11(2) of the Act to the appellant/assessee. - Shri Kul Bharat, Judicial Member And Shri Avdhesh Kumar Mishra, Accountant Member For the Appellant : Sh. Sudhir Sehgal, Advocate For the Respondent : Sh. Diwakar Singh, Sr. DRa ORDER PER AVDHESH KUMAR MISHRA, AM Since the issues involved in these two appeals are identical; hence, these are being heard together and are being disposed off by way of a common order for the sake of brevity. 2. Both appeals filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the judgment of Hon'ble Apex Court in the case of CIT (Exemption) Vs Bochasanwasi Shri Akshar Purushottam Public Charitable Trust cited in (2019) 105 Taxmann.com 1997 (SC), wherein the Hon'ble Apex Court have confirmed the fintling of the Hon'ble High Court that for the lack of declaration in Form No. 10, regarding 'specific purpose' by the assessee Trust is not fatal to exemption claimed u/s 11(2) of the Act and also failed to follow the various other judgments of difference High Court including the Hon'ble Punjab Haryana High Court in the case of CIT Vs Market Committee Tohana reported in 201 Taxmann 235 (P H) Others. 4. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 3.1 In nutshell, we are tasked to decide that whether the disallowance of accumulation under section 11(2) of the Act in both appeals are justified. 4. The relevant facts giving rise to these appeals, in brief, are that the appellant/assessee is a charitable organization registered under the Societies Registration Act and also under section 12A of the Income Tax Act, 1961 (hereinafter, the Act ). The appellant/assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall operate so as to exclude any income from the total income of the previous year of a person in receipt thereof, if- (i) the statement referred to in clause (a) of the said sub-section in respect of such income is not furnished on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year; or (ii) (ii) the return of income for the previous year is not furnished by such person on or before the due date specified under subsection (1) of section 139 for furnishi ng the return of income for the said previous year. 5.5 In addition to the above, it is seen that the purpose for which the amount is claimed to be accumulated or set apart is mentioned in form 10 as To be applied to promote and support research scientists for the advancement of research and development in future . This is a not a specific purpose which has been intended by law to allow accumulation of income. The purpose mentioned is quite vague and merely reflects one of the objects of the assessee, which is all encompassing. It is stated that the AO has to scrutinize the application regarding object of accumulating the income. There are many judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trust [1993] 199 ITR 819 (Cal) and CIT vs M.Ct. Muthiah Chettiar Family Trust [2000]245 ITR 400 (Madras). In Singhania Charitable Trust, Hon. Calcutta High Court held as under. Doubtless, it is not necessary that the assessee has to mention only one specific object. There can be setting apart and accumulation of Income for more objects than one but whatever objects or purposes might be. assessee must specify in notice concrete nature of purposes for which accumulation is being made. Plurality of the purposes for accumulation may not be precluded but it must depend on the exact and precise purposes for which the accumulation is intended for the statutory period of ten years. The generality of the objects of the trust cannot take the place of the specificity of the need for accumulation.... The very fact that the statute requires the purpose for accumulation to be specified implies such a purpose to be a concrete one, an itemized purpose or a purpose instrumental or ancillary to the implementation of its object or objects. The very requirement of specification of purpose predicates that the purpose must have an individuality. The provision of subsection (2) is a concession provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Child Welfare; therefore, it could work for welfare and charitable purposes only. The Ld. Counsel submitted that the Judgment of the Hon ble Supreme Court in the case of N. Balakrishnan vs. M. Krishnamurthy (AIR 1998 SC 3222) wherein it was held when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserved to be preferred. The doctrine must be applied in a rational, commonsense and pragmatic manner. The Ld. Counsel further submitted that the settled law is that the Revenue Authorities have to tax the right person in right manner and should not disallow the eligible deductions on mere technicalities. 9. The Ld. Sr. DR placed reliance on the orders of lower authorities. 10. We have heard both the parties and have perused the material available on record. We find that the appellant/assessee s objectives derive its spirit from the Directive Principles of State Policy enshrined in the Constitution of India. Since, the Govt. of India makes endeavor to provide welfare to one and all in the society at large and in view thereof the registration for public charitable trust through enactment is given in order to ensure that throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll in no case exceed five years. Undoubtedly therefore, the statement of purpose for which the income is being accumulated or set apart is one of the requirements which must be satisfied before the assessee can avail the benefit under sub-section (2) of section 11 of the Act. However, that by itself would not mean that any inaccuracy or lack of full declaration in the prescribed format by itself would be fatal to the claimant. The prime requirement of this clause is of stating of the purpose for which the income is being accumulated or set apart. In the present case, we are prepared to accept the Revenue's stand that the declaration made in Form 10 by the assessee was not sufficient to fulfill this requirement. However, as noted, during the course of assessment proceedings, the Assessing Officer called upon the assessee to explain the position in response to which, the assessee in detail pointed out background under which the board of trustees had met, considered the material and eventually passed a formal resolution setting apart the funds for the ongoing hospital projects of the Trust and for modernization of the existing hospitals. There was thus a clear statement made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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