TMI Blog2016 (1) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... tinued in the years after the year under appeal before us. Also in the case of DIT (Exemption) vs. Guru Nanak Vidya Bhandar Trust (2004 (1) TMI 11 - DELHI High Court), Hon’ble Delhi High Court has dealt with the issue wherein assessee’s claim for accumulation set out in form no.10 were accepted in the preceding and subsequent years to held CIT(A) was not justified in upholding the action of Assessing Officer in rejecting the application in form No.10 for accumulation of funds u/s 11(2) of the Act and accordingly adding to the income of the assessee - Decided in favour of assessee - ITA No.3105/Ahd/2011 - - - Dated:- 4-11-2015 - Shri Rajpal Yadav, JM, Manish Borad, AM. For The Appellant Shri H. P. Singh, AR For The Respondent Shri Jagdish, Sr. DR ORDER PER Manish Borad, Accountant Member. This appeal of the assessee has been filed against the order of CIT(A), Gandhinagar, Ahmedabad dated 28.9.2011 in appeal No.CIT(A)GNR/115/2010-11. Assessment for Asst. Year 2008-09 was framed by DCIT, Gandhinagar Circle, Gandhinagar under section 143(3) of the Income-tax Act, 1961 (in short the Act) on 10th December, 2010. Assessee has raised following grounds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1962. On perusal of form no.10 the Assessing Officer observed that the object for which the assessee has set apart the funds of the trust is not specific and was only for a general purpose and, therefore, rejected assessee s application made in form no.10 for setting apart of ₹ 8,21,58,996/- and added it to the total income of the assessee. 3. Aggrieved, assessee went in appeal before the ld. CIT(A) who confirmed the addition made by Assessing Officer by observing as under :- 6. I have gone through the assessment order and the submissions of the assessee. Both the appellant and the revenue agree that the assessee has given the same and all the purposes for accumulation of funds which are the purposes of charitable Trust itself. The issue was examined by Hon ble Madras High Court in the case of CIT vs.M.CT. Muthiah Chettiar Family Trust and Ors. 245 ITR 400 (Mad), after considering the decision of Hon ble Apex Court in the case of S.RM.M.CT.M.Tiruppani Trust vs. CIT (1998) 230 ITR 636 as under: The scheme of section 11 of the Act was examined by the apex Curt in S.RM.M.CT.M. Tiruppani Trust vs. CIT 145 CTR (SC) 176 : (1998) 230 ITR 636 at p.640 (SC): TC S23.24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant case, there is no individuality of the purposes which is the essential requirement as per the Hon ble Madras and Calcutta High Court. It is merely repetition of the objects of the trust which would not meet the requirements of sec.11(2) of the Act as has been held by the High Courts. Following the above decisions, I agree with the AO that although multiplicity of the purposes can be there, but where all the objects of the Trust are listed as the purpose of accumulation, the requirements of the sub-section (2) of section 11 are not met. The provision of sub-section is to allow accumulation where after application of mind to the contingencies of the situation and its requirement in fulfillment of objects of trust, it is felt that accumulation is required for some specific purpose, by the trust. In the instant case, the accumulation is sought without any specific purpose in mind but just to postpone the application of funds it was required to make for all the objects of the trust. This defeats the purpose of the sub-section and is not permissible as clearly held by the Hon ble Courts. The decision of the AO is therefore upheld and the grounds of appeal are dismissed. 4. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Asst. Year 2007-08 at 66,03,42,786/-, for Asst. Year 2010-11 at ₹ 16,60,04,187/- and ₹ 33 crores for Asst. Year 2011-12 which very well proves that the Income-tax Department has been consistently allowing the assessee to set apart the funds for the purposes of the trust under section 11(2) of the Act and also allowing the claim in the years after the year under appeal. To support his case, the ld. AR also relied on the judgment of Hon ble Delhi High Court in the case of Director of Income-tax (Exemption) vs. Guru Nanak Vidya Bhandar Trust (2005) 272 ITR 379 (Del). 8. On the other hand, the ld. DR supported the orders of lower authorities and could not controvert to the facts submitted by the ld. AR of the assessee. 9. We have heard the rival contentions and perused the materials on record and judicial pronouncements referred thereto. The only issue to be examined is whether the Assessing Officer was justified in rejecting the application of the assessee in form no.10 for availing of the benefit of accumulation of ₹ 8,21,58,996/- as specified under section 11(2) of the Act for Asst. Year 2008-09. Before going further let us go through the relevant provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m no.10 specifying the purpose for which the income is being accumulated and the period for which income is to be accumulated which should not exceed 5 years relevant to Asst. Year 2008-09 and should be submitted before the expiry of time allowed under section 139(1) of the Act read with Rule 12(2) of the IT Rules, 1962. Section 11(2)(a) only refers to the purpose for which accumulation is to be done and it does not speak of the word specific purpose . The Assessing Officer apart from raising objections on the mentioning of the purpose of accumulation, has not raised any objection to the conditions required to be fulfilled by the assessee in respect of the provisions of section 11(2)(a). The only point of the discussion remains is whether any specific purpose for example construction of a hospital, school building etc. is necessary to be mentioned in form no.10 or mentioning of the purpose for which the trust/charitable organization has been established is for a sufficient purpose for its accumulation. Section 11 of the Act deals with income from property held for charitable or religious purpose and mentions forms of trust/chariable organization/institution which are being co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the possibility of happening of the calamity/incidents is round the clock. In other words the incidents may happen in a year or more is not under the control of the trust. For this very reason the assessee has set apart/accumulated the funds for the objects of the trust and nothing specific possible happening could have been written in the application. Certainly the section 11(2)(a) has a check for the utilization of such fund by way of restricting the period for which the fund can be accumulated which is for 5 years relevant to Asst. Year 2008-09 and the Assessing Officer has power within the provisions of the Act to check that whether the funds accumulated or set apart is properly accounted for in the books of account and is utilized within the specific time limit mentioned in the provisions of the Act and in case he finds nothing contrary or otherwise to it then he can take the necessary course of action. 13. In the case of the assessee the Assessing Officer has nowhere examined the utilization of funds of previous years as to whether the separate records were kept for each year of accumulation and whether the fund has been utilized for the purpose of the trust within the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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