9911796707
TMI Blog2014 (12) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... Form No. 10 read with Rule 17 of the Income Tax Rules, 1962 the Assessee has fulfilled its obligation as required under Section 11 (2) of the Act". 2. The respondent society claiming itself to be a charitable institution had filed return of income for the assessment year 1996-97 declaring nil taxable income. Respondent also filed Form No. 10 along with its return as required by section 11(2) of the Act. During the course of assessment proceedings, the assessing officer, after going through the return and Form No. 10, noticed that respondent assessee had accumulated Rs. 27,54,839/- for the description/purpose "further utilization". The said purpose/description, it was observed was not a specific one, accordingly, the respondent assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "further utilization" in column No. 1 of Form No. 10, which meant that the assessee was to utilize the funds for the benefit of the members i.e. the employees of the New Bank of India in case of death, retirement and permanent disability. They referred to the very object for which the respondent society was formed. It was recorded that the funds were paid/given to the employees of New Bank of India in the aforesaid eventualities and it was in this context, the words "further utilization" had been mentioned. Referring to the objectives of the society, it was observed that respondent-assessee was to provide financial assistance to the members in case of death, retirement and permanent disability. This was the sole and only purpose for which f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed has failed to indicate the specific purpose for which the income was sought to be accumulated and therefore, the assessee had violated Section 11 (2) of the Act. The contention was rejected in the following words:- "..6 We do not agree. It is true that specification of certain purpose or purposes is needed for accumulations of the trust's income under Section 11 (2) of the Act. At the same time the purpose or purposes to be specified cannot be beyond the objects of the trust. Plurality of the purposes for accumulation is not precluded but it depends on the precise purpose for which the accumulation is intended. In the present case, both the appellate authorities below have recorded a concurrent finding that the income was sought to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the opinion that it was not required for the assessed to be more specific with regard to the utilization of the funds. 8. In the case of The Director of Income Tax v. Mamta Health Institute and Children (2007) 293 ITR 380 (Delhi), the High Court referred to the objectives for which the society was formed which had seven clauses. Revenue had alleged that in the Form No.10, the assessee had failed to indicate the specific purpose for which the income was sought to be accumulated, but this submission was rejected by observing that the assessee had placed a copy of the annual report in which he has specified the items for which the money was accumulated. It was accordingly observed:- "9 A perusal of the annual report as well as the overvie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion fees and thereafter pay Rs. 25/- per month for a period of 25 years. The scheme devised provided:- " PRESENT SCHEME Membership : Membership of the society shall be open to the permanent employees of New Bank of India. Any employee desirous of becoming member may apply on the prescribed form on payment of Rs. 10/- as admission fee, duly recommended by any of the office bearer or Managing Committee member of the society employees appointed on part-time basis and 1/3rd or 2/3rd salary are not eligible for membership. Subscription : Under the present scheme, every member shall subscribe a sum of Rs. 25/- per month for a period of 25 years. Benefits: (a) in case of death : (i) Members in the age group of below 50 years (as on 31-7-85) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of accumulation for further benefits to be given to the members in the case of death, retirement, permanent disability......" 10. Other benefits which were specified in part (b) of the Scheme, which stipulated that a sum of Rs. 500/- shall be paid to the members on the event specified therein. 11. The aforesaid contention has been accepted by the Tribunal. The findings recorded are in consonance with ratio of several decisions of this Court. 12. In view of the factual background, the substantial question of law in terms of the decisions of this court has to be answered in favour of respondent assessee and against the appellant. The appellant revenue, is not entitled to succeed. The appeal is disposed of. There will be no order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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