Specified purpose for income accumulation under section 11(2) satisfied where Form No. 10 reflected statutory development functions.

Section 11(2) permits accumulation of income where the amount is earmarked for a specified charitable purpose and the prescribed form is properly completed. In this discussion, development works stated in Form No. 10 were treated as sufficiently specific because they corresponded to the statutory development functions of a statutory body under the Punjab Agriculture Produce Marketing Act, 1961. The accumulation was therefore regarded as compliant with the requirement of specifying the purpose of accumulation, and a general description in Form No. 10 was not, by itself, fatal where the purpose was clear in substance.

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Issues: Whether the assessee satisfied the requirements of section 11(2) of the Income-tax Act, 1961 by specifying the purpose of accumulation in Form No. 10.

Analysis: The exemption under section 11(2) is available when accumulated income is earmarked for a specified charitable purpose and the prescribed mode is followed. The authorities below found that the assessee, a statutory body, had indicated development works in Form No. 10 and that such purpose corresponded to the statutory purposes under section 28 of the Punjab Agriculture Produce Marketing Act, 1961. On that basis, the accumulation was treated as sufficiently specified and in compliance with the statutory requirement.

Conclusion: The requirement of specifying the purpose of accumulation was held to be satisfied, and the Revenue's challenge failed.

Ratio Decidendi: Where the purpose of accumulation is indicated in substance and is referable to the assessee's statutory development functions, section 11(2) is not defeated merely because the description in Form No. 10 is general.

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