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of <h1>Under s.11(1)(a) charitable trust may accumulate 25% of income from trust property, donations treated as such</h1> <h3>Commissioner of Income-Tax Versus Programme For Community Organisation</h3> SC held that under s.11(1)(a) a charitable/religious trust may accumulate 25% of its income derived from property held under trust; donations received by ... Entitlement to exemption u/s 11 - Whether, for the purpose of s. 11(1)(a) of the IT Act, 1961, the amount for the grant of exemption of twenty-five per cent should be the income of the trust or it should be its total income as determined for the purposes of assessment to income-tax - HELD THAT:- Having regard to the plain language of the Sec. 11(1)(a), it is clear that a charitable or religious trust is entitled to accumulate twenty-five per cent of its income derived from property held under trust. For the present purposes, the donations the assessee received, in the sum of Rs. 2,57,376, would constitute its property and it is entitled to accumulate twenty-five per cent thereout. It is unclear on what basis the Revenue contended that it was entitled to accumulate only twenty-five per cent of Rs. 87,010. Appeal is dismissed. The sole issue was whether, for s.11(1)(a) of the IT Act, 1961, the 25% accumulation limit applies to the trust's 'income' or to its 'total income' as assessed. Facts: donations of Rs. 2,57,376 were received; Rs. 1,70,369 applied to charitable purposes; balance Rs. 87,010 remained. Section quoted: '11. (1)(a) Income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of twenty-five per cent of the income from such property.' The Court held that, by plain language, a charitable trust is entitled to accumulate 25% of its income 'derived from property held under trust.' The donations constitute the trust's property; therefore 25% of Rs. 2,57,376 may be accumulated. The appeal was dismissed; no order as to costs.
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