9911796707
TMI Blog2021 (1) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of providing exemptions u/sections 11 & 12 in the Income Tax Act are to encourage and facilitate channelling of public money into charitable activities, subject to fulfilment of certain conditions. Public Charitable Trusts play a very vital role in our society. But, without these exemptions, It Is virtually impossible for trusts to survive and grow. In the instant case, at the end of every year, after drawing up its financial statements, the trust arrives at the surplus for the year, if any. Based on the surplus, the trust decides the end-use, First, funds are set aside for the long-term repairs and renovations to be carried out in its premises. These are apart from the regular maintenance expenses. For this, the accumulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses in India during the previous year but is accumulated or set apart , either in whole or it, part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with namely: (a) such person specifies by notice in writing given to the Assessing officer in the prescribed manner the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart which shall in no case exceed ten years; (b) the money so accumulated' or set apart is invested or deposited in the forms or modes specified in sub section (5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has accumulated its income not for specific purpose, but merely to defer taxation of surplus of amount which has not been applied towards its objects in the corresponding accounting period. According to the Assessing Officer, filing Form no.10 is not an empty formality and assessee needs to specify the purpose for which such income has been accumulated. Since, the assessee has accumulated income for general purpose, the same cannot be allowed to be accumulated u/s.11(2) of the Act, accordingly, allowed accumulation of income for the purpose of Ashram major repair fund, but rejected accumulation of income for the purpose of poor children educational fund and medical aid fund amounting to Rs. 10.00 lakhs and added back to total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal filed by the assesse. Aggrieved by the CIT(A)'s order the assessee is in appeal before us. 5. At the time of virtual hearing , none appeared on behalf of the assessee. However, since the issue involved in this appeal is covered, we proceed to dispose of appeal, after hearing the learned DR. 6. The learned DR, supporting the order of the learned CIT(A) submitted that assessee is accumulating income u/s.11(2) on vague reasons without specifying the purpose for which such income has been accumulated, even though section 11(2) clearly mandates the assessee to specify purpose for accumulation of income, therefore, there is no reason to interfere with the findings recorded by the learned CIT(A) to deny accumulation of income u/s.11(2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bochasanwasi Shri Akshar Purshottam Public Charitable Trust reported in [2019] 102 taxmann.com 122, where it was held that lack of declaration in Form No.10 regarding specific purpose for which funds were being accumulated by the assessee trust would not be fatal to the exemption claimed u/s.11(2) of the Act. The Hon'ble Supreme Court reported in (2019) 263 Taxmann.com 247(SC) has dismissed SLP filed by the Department in the above case and has upheld the findings of the Hon'ble Gujarat High Court. 8. In this case, on perusal of facts available on record, clause 4k of trust deed provides for extending help and relief to distressed and destitute, homeless and underprivileged and funds accumulated u/s.11(2) is covered under main objects of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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