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TMI Blog2017 (11) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referred to as the 'Act') dated 14.11.2011. 2. The grounds of appeal raised by the assessee reads as under: "1 or that the order of assessment is void ab initio, bad in law and is neither tenable in law nor in facts. 2 or that the assessment order is opposed to requirement in law and without jurisdiction. 3 or that the assessment is made in arbitrary, violence of natural justice, without application of mind and not tenable in law. 4 or that the order of authorities below is grossly unjustified in disallowing the claim of Rs. 54,83,854/- u/s 11(2) of the Act. The contention of the assessing officer is neither tenable in law nor in facts. 5 or that the assessing officer was grossly unjustified in disallowing the claim u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts and evidences. The assessee filed documents and explanations to the assessing officer. The assessing officer on verification of assessment records of the two trusts found that assessee trust paid donation of Rs. 8,00,211/- in A . 2002-03 and Rs. 9,69,846/- in A . 2003-04 to Shree Shree Mohanananda Samaj Seva Samity and received donation of Rs. 13,00,211 in A . 2002-03, and Rs. 15,15,114 in A . 2003- 04 from said trust Shree Shree Mohanananda Samaj Seva Samity having common trustees. The AO observed that giving and receiving funds between two trust having common trustees for mutual benefits is a clear violation of the provisions of section 13(1)(c) of the Act. The proviso to Sec.13(1)(c) puts a block to such effect and provides for forfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not for all the purposes for which the Trust was set up but only for the objects mentioned at clause 1 to 6 of the object clause which was all related to medical purposes. Therefore, ld. CIT(A) held that the purpose of accumulation was not specific and therefore, AO had rightly disallowed the exemption u/s 11 of the Act and this way, he confirmed the order passed by the AO. 6. Not being satisfied with the order of the ld. CIT(A), the assessee is in appeal before us. The ld. DR for the Revenue pointed out that the ld. CIT(A) was wrong in allowing accumulation u/s 11(2) of I Act without appreciating the fact that the purpose of accumulation was not specific, which is mandatory for accumulation u/s 11(2) of the I Act he ld. DR for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritable purposes and exemption u/s 11 allowed partially in the original assessment, how the same expenditure is found to be spent for non-charitable purposes in the re-assessment proceedings? When the Assessing Officer finds that the income which was set apart in any Assessment Year for future expenditure for charitable purposes, has not been utilized for the charitable purpose, then he has to bring such non charitable expenditure to tax in the year of its expenditure as per the provisions of section 11(3). The ld Counsel also pointed out that such expenditure for non-charitable purpose cannot be the basis for denial of exemption u/s.11 for any subsequent year. The assessee has been filing the returns of income for all subsequent assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case, in so far as in the above mentioned case, the resolution passed by the Board of Trustees of the Trust was as follows:- "That consent be and is hereby accorded that, out of the balance of unapplied income of Rs. 94,125/- for the years, the sum of Rs. 68,814/- be accumulated and/or not apart for the purpose of application to any one of the objects of the trust, as set out in Items no.(i) to (xvi) under paragraph-1 of the deed of trust till the previous year ending on March 31, 1994." It was apparent from the above that the purposes for which the fund was actually vague and not specified. In so far,it is fixed for anyone or more of the objects of the Trust set out in the Trust deed, whereas in the present case, out of the other ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of accumulation of income under section 11(2), assessee must specify in the notice in Form 10 the concrete nature of the purpose(s) for which accumulation is being made. In the assessee's case under consideration, the assessee trust filed the Form no.10 and made the compliance and there is no any mistake on the part of the assessee. Therefore, the facts of the said judgment do not apply to the facts of the assessee under consideration. Apart from this, other two judgments cited by ld DR viz: CIT Vs. Rattan Trust (1997) 227 ITR 356(SC)and Champa Charitable Trust Vs. CIT [214 ITR 764(Bombay) (supra), do not apply to the assessee's facts under consideration. In addition to this, the assessee's issue is squarely covered in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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