TaxTMI 
TaxTMI 
2016 (1) TMI 493
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....which accumulation was sought were the specific objects of the appellant trust. Ld. CIT(A) ought to have granted the benefit claimed by the appellant when the objects listed for accumulation were found to be charitable in nature by both the authorities. 3. Ld. CIT(A) erred in law and on facts in confirming view taken by AO in rejecting accumulation in absence of assigning any specific reasons to the vagueness of objects listed in form no.10. Both the lower authorities failed to appreciate that the objects for which accumulation was sought were specific and concrete in nature. 4. Both the lower authorities erred in law and on facts in not taking into cognizance case laws relied upon by the appellant directly applicable to the facts of the case and without distinguishing them rejected the claim of accumulation of funds that ought to have been granted to the appellant. This action of both the lower authorities is in clear breach of Principles of Natural Justice and therefore deserves to be quashed. 5. Levy of interest u/s 234A and 234B of the Act is not justified. 6. Withdrawal of interest u/s 244A of the Act is not justified. 7. Initiation....
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....otal income or Rs. 10,000 whichever is higher. Under s.11(2) if the trust desires to accumulate more than 25 per cent of its income and wants to claim exemption from income-tax it has to comply with the conditions which are laid down in s.11(2)(a) and (b). The first condition is that a notice in writing should be given to the ITO in the prescribed manner specifying the purpose for which the income is being accumulated and the period for which the income is to be accumulated. The period should not exceed two years. Rule 17 of the IT Rules 1962 prescribes that the notice which is required to be given under s.11(2)(a) should be in form no.10. The second condition is that the amount so accumulated has to be invested in any government security as specified in s.11(2)(b)." The trust is allowed to accumulate its income for a maximum period of ten years. The condition is that the trust should specify in the prescribed form the purpose for which the income is accumulated or set apart. It is not enough for the trustees to repeat the objects of the trust but must specify a particular purpose for which the income is being accumulated (emphasis supplied). We are in agreement with the v....
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....members. The main function of the trust is to provide relief in case of natural calamity, medical relief to the poor people, financial assistance to the widows of soldiers died in action, survivors of mass mishaps like earthquake, flood, drought etc. All these activities of the trusts are similar to the objects of Prime Minister Relief Fund. 5. The ld. AR further submitted that the trust regularly receives fund/contribution during the year and since the objects of the trust also include providing relief in case of natural calamity, financial assistance to widows of solders and these objects are not certain to occur every year and there are always possibility of such incidents in the near future and for this very reason certain fund is accumulated in set apart to be utilized for the objects of the trust i.e. medical relief, death relief, financial assistance and Jawan Rahat. The trust deed requires the trust to utilize its fund for charitable purposes which are medical relief, death relief and financial assistance to Jawan Rahat. In the application seeking exemption furnished in form no.10, the trust has stated these objects. It was true that the trust has mentioned that the fund....
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....n whole or in 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 42[Assessing] Officer in the prescribed43 manner44, 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 accumulated46 or set apart is invested or deposited in the forms or modes specified in sub-section (5)]:] [Provided that in computing the period of ten years referred to in clause (a), the period during which the income could not be applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded:] [Provided further that in respect of any income accumulated or set apart on or after the 1st day of April, 2001, the provisions of this sub-section shall have effect as if for the words "ten years" at both the places wh....
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....Gujarat as its chairman and members of the fund includes Revenue Minister, Principal Secretary of the State and Secretary, Department of Revenue of State of Gujarat and its main purpose is elevation by grant of money or otherwise of distress caused by partial or complete failure of rains and its consequent effect in the shape of partial or total failure of crops or by any other calamity in the State of Gujarat. Further as per the rules of Gujarat Chief Minister Relief Fund moneys and other assets available from fund shall be spent in one or more of following ways - (i) In supplementing the rationed foodgrains to persons earning wages on relief works. (ii) In providing comforts whether of additional food or clothing or medical needs for the aged or the infirm, for patients in hospitals and the like. (iii) In providing for the maintenance of orphans or inmates in workhouses situated in the area affected by the distress. (iv) In relieving women, children and other persons in distressed circumstances who are not used to outdoor work. (v) In helping resettlement of impoverished agriculturists, maldharis (cattle breeders) and others who have l....
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....as they have mentioned that they are accumulating/setting apart funds for the purpose of the trust. 14. The claim of the assessee further gets strengthened looking to the history of the assessee's assessment proceedings wherein its setting apart/accumulation of funds in form no.10 for the purpose of the trust has duly been accepted by the Assessing authorities and the same is being continued in the years after the year under appeal before us. Also in the case of DIT (Exemption) vs. Guru Nanak Vidya Bhandar Trust (supra), Hon'ble Delhi High Court has dealt with the issue wherein assessee's claim for accumulation set out in form no.10 were accepted in the preceding and subsequent years but not for the year under appeal, and held as under :- "Held -dismissing the appeal, that the Tribunal had allowed the assessee trust to accumulate its income because its request for accumulation had been accepted in the preceding and succeeding assessment years and this was the solitary year in which the claims came to be rejected. Further, the objects for accumulation set out in form no.10 in the preceding assessment years and in the succeeding assessment years and in the year under appeal ....