Delegated rules cannot impose a time limit that curtails a statutory charitable exemption absent clear legislative authority.

Paragraphs 2 and 4 of Form No. 10 were held ultra vires because the rule-making power under section 295 could not add a four-month time limit for investing accumulated charitable income when section 11(2) itself did not prescribe that restriction. The prescribed form could regulate the manner of notice and investment in approved securities, but it could not impose a substantive condition that curtailed the availability of exemption without express or necessary legislative authority. Paragraph 4 also failed because it was conditional on compliance with paragraph 2. The impugned time condition was therefore invalid, and the statutory exemption could not be defeated by the form.

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Issues: Whether paragraphs 2 and 4 of Form No. 10, prescribing a four-month time limit for investment of accumulated charitable income in Government securities, were validly made under the rule-making power and consistent with section 11(2) of the Income-tax Act, 1961.

Analysis: Section 11(2) requires notice in the prescribed manner and investment of accumulated income in Government securities or other approved securities, but it does not itself prescribe a four-month period. The power to prescribe the manner of the notice could not be extended to creating a time limit that affected the availability of exemption. The rule-making power under section 295 was limited to carrying out the purposes of the Act and could not be used to impose a substantive restriction where the legislature had not done so expressly or by necessary implication. The court treated the four-month requirement as an unauthorized limitation on a statutory exemption and held that such a time prescription could not be sustained merely because the rules were laid before Parliament. Since paragraph 4 was made conditional on compliance with paragraph 2, it also could not stand.

Conclusion: Paragraphs 2 and 4 of Form No. 10 were ultra vires and invalid. The exemption could not be defeated by the impugned four-month time condition, and the decision was in favour of the assessee.

Final Conclusion: The appeals failed because the prescribed form went beyond the scope of the Act and the delegated rule-making power by adding an impermissible time restriction.

Ratio Decidendi: A subordinate rule or prescribed form cannot impose a time limit that curtails a statutory exemption unless the parent Act expressly or by necessary implication authorises such a restriction.

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