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2015 (10) TMI 2840 - AT - Income TaxExemption u/s 11 - accumulation not made as per law and assessed it as AOP - objects specified in Form No. 10 for accumulation of income were too vague and further there was no need for assessee to accumulate funds for the purpose of salary as it has enough funds including grants received from State Government for this purpose - Assessee stated that the assessee is a society registered under section 12A of the Act since 2005 - whether assessee has accumulated the funds as per law? - HELD THAT:- On perusal of the bye laws of the assessee society, we see that hiring of staff and utilization of funds for welfare of patients are two objects of the society. Therefore, it cannot be said that the objects which are stated for the purpose of accumulation of funds under Form No.10 are outside the objects as provided in the bye laws of the society. The contention of the AO is that these objects are too vague and are not specific. No reason for not granting assessee the benefit of such accumulation given the fact that the accumulation is sought for the purpose of its objects on the basis of which it was granted registration u/s 12A - We do not even find the objects stated in the Form No.10 too vague either, as these are the objects as per the bye laws. Admittedly, the objects stated in Form No.10 are not elaborately stated, but that cannot be the reason to deny the said benefit. Thus we find that there is no vagueness in the purposes specified by the assessee in Form No.10. Assessee has enough funds for the purposes of salary to be paid in the form of grants received from the State Government as well as the unutilized amount of grant so received by the assessee - It is not the Assessing Officer’s case that the assessee has not complied with any of these conditions. His only concern is the availability of a huge amount of funds for the said purpose. AO in this regard has to confine himself to the provision of the Income Tax Act read with the Income Tax Rules only. AO does not have any prerogative to comment on the way the activities are to be carried on by the assessee. How much funds are needed for which purpose and how funds are to be used for different purposes is none of the Assessing Officer’s concern. It is only assessee’s own way of functioning. AO cannot sit on the armchair of the assessee to decide all these things, given the fact that the Income Tax Act does not give him any such power. Whether the assessee is receiving excess grant or whether it is in need of such grants may be the concern of the granting authority or that the assessee, but certainly not of the AO. We find that this issue raised by the AO to be not relevant for giving benefit of accumulation. benefit of accumulation of funds as provided u/s 11(2) allowed - Decided in favour of assessee.
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