Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2010 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (7) TMI 85 - DELHI HIGH COURTCharitable Trust – accumulation of income – application of income – current year’s income - The ITO found that that donation of Rs.25 lacs as corpus donation to BLB Trust was not from current year’s income but out of accumulations from the income of earlier years. The ITO, being of the opinion that owing to the explanation appended to Section 11(2) w.e.f. the Assessment Year 2003-04, any donation made out of income accumulation or set apart during the period of accumulation or thereafter to any trust or institution registered under Section 12AA, as BLB Trust was, was liable to be added in the income of the donor trust, accordingly computed the income as aforesaid of the Assessee. – CIT(A) and ITAT decided in favor of assessee – Held that: - The “explanation” appended after Section 11(2) is nothing but an additional condition attached to accumulation in excess of 15% permitted under Section 11(2). We are unable to hold it as a condition on accumulation up to 15% as provided for in Section 11(1)(a) also. We are unable to find any rational classification for imposing the restriction as contained in the “explanation” to the accumulation of up to 15% also when there is no such restriction to donating the entire income of a year to another charitable trust. If the legislature intended to completely ban/discourage inter se donation between trusts, it would have changed the position as existing in law - even if the donations by the Assessee herein were to be out of accumulations from previous years’ and not out of surplus reserves, the same would still not be liable to be included in the total income as assessed by the Income Tax Officer – decided in favor of assessee
|