TaxTMI 
TaxTMI 
1998 (2) TMI 3
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....ax under section 11 of the Income-tax Act for the assessment year 1970-71 ?" The assessee is a charitable trust for carrying out Thiruppani or repairs to old Hindu temples, building new ones, giving aid to or establishing hostels, educational and industrial institutions, etc. It is not in dispute that the objects of the trust are charitable. On March 1, 1963, the trustees resolved that the income of the trust should be accumulated for a period of ten years commencing from April 13, 1961, for the various charitable purposes which are set out in the resolution. The assessee accordingly filed Form No. 10 with the Income-tax Officer as required under section 11(2) of the Income-tax Act, 1961. The income was accordingly being accumulated ever....
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....essee in accordance with the declaration filed by the assessee under section 11(2), the assessee could not claim exemption from tax in respect of Rs. 1,64,210.03. The material part of section 11, at the relevant time, was as follows : "11. Income from property held for charitable or religious purposes.---(1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income--- (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 for application to such purposes in India, to t....
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....claim exemption from income-tax, it has to comply with the conditions which are laid down in section 11(2)(a) and (b). The first condition is that a notice in writing should be given to the Income-tax Officer 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 ten years. Rule 17 of the Income-tax Rules, 1962, prescribes that the notice which is required to be given under section 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 section 11(2)(b). The assessee in the present case had given notice in 1963 in Form No. 10 ....
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....essee. This is the only submission we have to consider. A mere look at sections 11(1) and 11(2) is sufficient to dispel this argument. Under section 11(1), every charitable or religious trust, irrespective of whether it has filed a declaration under section 11(2) not, is entitled to deduction of certain income from its total income of the previous year. The income so exempt is the income which is applied by the charitable or religious trust to its charitable or religious purposes in India. If the entire income is so applied, the entire income would be exempted. If the entire income is not applied but some income is accumulated by such a trust, then also under section 11(1)(a), such accumulated income to the extent of 25 per cent. of the ....