TMI Blog2019 (12) TMI 1275X X X X Extracts X X X X X X X X Extracts X X X X ..... INCOME TAX (EXEMPTION) [ 2007 (1) TMI 98 - DELHI HIGH COURT] held that specification of certain purpose or purposes is needed for accumulations of the trust s income under section 11(2) of the Act however, the details of the purposes for which the income was accumulated need not be specified. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to allow the claim of the assessee under section 11(2) of the Act. The ground NO.1 is allowed. Interest charged by the AO under section 234A - HELD THAT:- There is no delay in filing the return of income by the assessee trust. We have perused the provisions of section 234A of the Act and are of the opinion that the interest under section 234A is attracted only where the return is furnished after the due date as envisaged u/s 139(1) of the Act or is not furnished at all by the assessee. In the present case, the assessee has duly filed the return of income well within the time under section 139(1) - CIT(A) has not adjudicated the matter and simply directed the AO to dispose of the petition under section 154 of the Act. In our opinion, the charging of interest under section 234A is apparently wrong and against the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SMD/RCG/PJ/268/96 dated 19.01.1996 for setting up for IPF. In terms of the said direction given by the Ministry of Finance and SEBI, the National Stock Exchange Stock Exchange Investor Protection Fund Trust was set up on 11.07.1995 with an object of safeguarding the interest of the investors. The CBDT vide various notifications exempted the income of the appellant trust for A.Y. 1996-97 to A.Y. 2001- 02 under section 10(23C)(iv) of the Act. Therefore, the entire income of the Trust being the contribution received in terms of SEBI guidelines as well as income on investments was claimed as exempt under section 10(23C)(iv) of the Act. Subsequently, section 10(23EA) of the Act was inserted w.e.f. 01.04.2001 to exempt any income of IPF set up by the recognized stock exchange in India ,as the Central Government made, by notification in the official gazette, may specify in this behalf . The CBDT circular vide notification No.253 dated 29.11.2005 had I notified the appellant trust for the purpose of section 10(23EA) of the Act, therefore the entire income of the Trust was exempt under section 10(23EA) of the Act for 2002-03 to 2006-07. The Finance Act, 2006 amended section 10(23EA) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO in para 11.1. However, the same did not find favour with the AO and AO observed that the section 11(2) clause (a) of the Act does not say that objects should be mentioned in the form No.10 but the purpose of accumulation is required to be mentioned and thereafter the AO relying upon certain decisions rejected the accumulation and treated the same as income during the year. In other words, the claim of the assessee was rejected primarily on the ground that the purpose of accumulation is not mentioned but the objects were mentioned in form 10. 4. In the appellate proceedings, the Ld. CIT(A) affirmed the order of AO on this ground after taking into consideration the submissions of the assessee by observing and holding as under: In ground No. 2 of appeal the appellant has disputed denial of exemption u/s. 11(2) made by the AO on the ground that specific objects were not mentioned in Form No. 10. The appellant during the course of appellate proceedings has made same submissions which were made before the AO. It is noted that in the assessment order the AO has elaborately discussed this issue in paragraph 11 of her order. It has clearly been brought out that the purpose of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table Trust 263 Taxman 247 (SC) 2. CIT(E) vs. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust 409 ITR 591(Guj HC) The Ld. A.R. submitted that the decision relied upon by the AO in the case of DIT(E) vs. Trustee of Singapore Charitable Trust (1993) 199 ITR 820 is not applicable to the facts of the instant case as in the assessee s case there was only one object as stated hereinabove whereas in the said decision the facts were different as there were multiple objects and the question of vagueness and ambiguity very much was there. The Ld. A.R. therefore prayed that the appeal of the assessee may kindly be allowed in view of the fact that the similar deduction has been allowed in the earlier years and also that there is no violation of provision of section 11(2) of the Act. 6. The Ld. D.R., on the other hand, relied on the order of Ld. CIT(A) by submitting that the section 11(2) of the Act specifically provides for specifying the purposes for which accumulation was being made and therefore there is no force in the arguments of the Ld. A.R. that the general mentioning of the purposes would be suffice and therefore the order of Ld. CIT(A) may kindly be upheld on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was created and thus sufficiently satisfy the requirements of section 11(2) of the Act. We also note that similar claim of the assessee has been allowed in the earlier years by the Revenue. The case of the assessee finds support from the decision of Hon ble Supreme Court in the case of CIT(E) vs. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust (supra) wherein Hon ble Supreme Court while dismissing the SLP filed by the Revenue upheld the order of the Hon ble Gujarat High Court in which the Hon ble High Court has held that non specification of purpose for which the funds were accumulated by assessee trust under section 11(2) would not be fatal to the exemption claimed. In the case of Bharat Kalyan Prathistan vs. DDIT(E) (Delhi HC) 299 ITR 406 the Hon ble Delhi High Court has held that specification of certain purpose or purposes is needed for accumulations of the trust s income under section 11(2) of the Act however, the details of the purposes for which the income was accumulated need not be specified. We, further, note that the decision of Hon ble Kolkata High Court in the case of DIT(E) vs. Trustees of Singapore Charitable Trust as relied upon by the AO is distingui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has wrongly been charged by the AO. Accordingly, we direct the AO to charge interest under section 234C of the Act as per the provisions of the Act. The ground No.4 of the appeal is allowed for statistical purpose in the terms aforesaid. 13. The appeal of the assessee is partly allowed. ITA No. 2329/Mum/2016 14. The grounds raised by the Revenue are as under: 1. Whether on the facts of the case and in law, the Ld. CIT(A), Mumbai erred in allowing the exemption under 10(23EA) of the I.T. Act, even though the claim was not made by the assessee during the filing of return of income but as alternative at the appellate stage before CIT(A)? 2. The appellant prays that the order of the Commissioner of Income-Tax (Appeals) I, Mumbai be set aside and that the order of the Assessing Officer be restored 15. At the outset, the Ld. counsel of the assessee submitted that issue is covered in favour of the assessee by the order of Hon ble Bombay High Court in the case of DIT(E) vs. Exchange M/s. National Stock Investor Protection Fund Trust in ITA No.1217 of 16 order dated 04.01.2019. The Ld. A.R. therefore prayed that the appeal filed by the Revenue may kindly be dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g by the question framed by the Revenue. in the Appeal, the sole objection projected is of the Tribunal allowing the claim which was raised by the assessee for the first time before the Appellate Authority. The Revenue does not dispute that necessary facts were already on record to examine such a claim. That being the position, the assessee's claim was based on pure interpretation of statute. The Tribunal, therefore, -correctly rejected the Revenue's objection relying upon the decision of this Court in the case of Pruthvi Brokers Share Holders Pvt. Ltd. (supra). The reference can also be made to the decision of the Supreme Court in case of National Thermal Power Corporation vs. CIT 229 ITR 383(SC) holding that the powers of Commissioner of Income Tax (Appeals) are much wider than that of the Assessing Officer. 5. The other contention though not specifically mentioned by the Revenue in the question framed, we have examined the same. There is no prohibition in law which would prevent the assessee - Trust which qualifies for benefits under Section 11 to 13 of the Act from claiming exemption under Section 10 (23EA) of the Act. In fact when the Assessing Officer allowed su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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