TMI Blog2005 (2) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the extract of resolution dt.27th March, 1998, stating the object of accumulation of fund. This Form No. 10 filed by the assessee was not considered to be a proper and valid intimation to the Department. During the course of assessment proceedings, the assessee has also filed the detailed minutes, of the meeting of the board of directors held on 27th March, 1998, but the AO was not convinced with the contentions of the assessee that the assessee has fulfilled the requirement of law by furnishing the Form No. 10 as per provisions of s. 11(2) of the Act, stating therein the object of the accumulation of the fund and the AO did not allow the accumulation of income of Rs. 32,10,000 and taxed the same. 3. The assessee preferred an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Once the assessee knew it very well that the business is under profit, he can very well take a decision to set apart certain part of profit for the succeeding years and if that is done, an intimation of accumulation of funds cannot be disbelieved on the basis of surmises without bringing anything an record. The learned counsel for the assessee further relied upon the judgment of the jurisdictional High Court in the case of CIT vs. Hotel Restaurant Association (2003) 182 CTR (Del) 374 : (2003) 261 ITR 190 (Del), in which their Lordships have categorically held that once an intimation is given under Form 10B about the accumulation of income for fulfilment of objects of the assessee's charitable institution though specific purpose of accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment proceedings with the submissions that in the extract filed along with Form No. 10, it was specified that an amount of Rs. 32,10,000 should be accumulated or set apart in order to enable the board to accumulate sufficient fund for carrying out the objects of the foundation whereas in the full minutes a specific object was also specified, i.e. Rs. 32,10,000 should be accumulated as per the IT Act for utilization for the project of design development of PC based fly deck transformer and design and development of DSP based audio processing unit. In the light of these discrepancies, only one presumption can be drawn that the minutes of the meeting of the board of directors, were prepared when the AO pointed out defect in Form No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but it was clarified that accumulation of fund was done to achieve the object of the foundation, i.e., the assessee. It is also an admitted fact that during the course of assessment proceedings, the assessee has filed the complete minutes of the meeting of the board of directors and in these minutes an specific object of accumulation of fund was also specified. With regard to the veracity of the minutes, we do not find any force in the contention of the Revenue because in a general practice, minutes are not recorded; during the course of meetings of the board of directors only points are noted and minutes are prepared later on. These minutes are generally approved in the next meeting of the board of directors and at that time the minutes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndatory for the person claiming the benefit of s. 11 to intimate to the assessing authority the particulars required under r. 17 in Form No. 10 of the IT Rules, 1962. If during the assessment proceedings, the AO does not have the necessary information, the question of excluding such income from assessment does not arise at all. As a matter of fact, this benefit of excluding this particular part of the income from the net of taxation arises from s. 11 and is subject to the conditions specified therein. Therefore, it is necessary that the assessing authority must have this information at the time he completes the assessment. In the absence of any such information, it will not be possible for the assessing authority to give the benefit of such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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