TaxTMI 
TaxTMI 
2017 (3) TMI 1227
X X X X Extracts X X X X
X X X X Extracts X X X X
....out social works particularly, in the field of Leprosy /AIDS / HIV and other vocational training programmes for empowerment of women and filed its return of income admitting total income of Rs. NIL. Case of the assessee was taken up for scrutiny and assessment under section 143(3) was completed by determining total income of Rs. 55 lakhs on the ground that the assessee is not entitled for exemption under section 11(2) of the Act. During the course of assessment proceedings, the Assessing Officer has noted that accumulation of income for the purpose of building construction and other activities mentioned in Form No. 10 is not specific. In this connection, the Assessing Officer called the assessee to explain the same. The assessee has explain....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the Assessing Officer and held that assessee is eligible for exemption under section 11 of the Act. The relevant portion of the order is extracted as under:- "5. I have carefully gone through the order of the Assessing Officer, the grounds of appeal and also the submissions made by the appellant. Accordingly, the issues agitated in this appeal are dealt in as under:- 5.1 The only issue to be dealt in this appeal is denial of exemption claimed of the Act Out of the total income of the previous year 2010-11, the accumulated Rs. 55,00,0007- u/s.11(2) of the Act for 'building construction and Other Activities' and claimed exemption under that section. The Assessing Officer brought this income to tax mainly for the following reason....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of these funds. On verification of this letter, it is observed that the funds were given for the purpose of the appellant has contended that section 11(2) of purposes, so long as one or more of the purposes by tie appellant find place in the objects, for which the society has been led and so long as the said purposes are charitable in nature, the benefit must flow to the appellant. The appellant has also produced the details of utilization of these funds in the subsequent years as per which the funds were utilized for these purposes by 31st March, 2014. The appellant has also relied upon the decisions of various courts. Taking into consideration the totality of the facts in this case, I am of the opinion that the appellant has accumula....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Assessing Officer disallowed the appellant's claim placing reliance on certain case laws. The Assessing Officer has also held that the accumulation should not be done on regular basis. b) In this connection, the appellant has contended that a typographical error has typing the relevant column of the Audit Report since details for most in that report are 'No, not applicable'. The appellant produced a copy letter dated 24/04/2010 given by DSS Generalate, Pattuvam transferring funds FRs.60,00,000/- to the appellant's account to utilize the same for construction work other purposes mentioned in that letter. In that letter, the appellant was suggested to keep this money as short term fixed deposits if the implementation of the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se of CIT Vs. Indian National Theatre Trust (2008) 305 ITR 149 (Delhi), the Hon'ble High Court held as under:- "It is one thing to say that the requirement of investment is deemed to have if the investment was made in the year in which income was received, although such income was not necessarily received in the very year the accumulation was sought to be made. However, to stretch it to the investments made in years even earlier to the previous year in question is not warranted on a plain reading of the section. The express wording of the provision indicates that in order to satisfy the requirement of section 11(2)(b), the investment must necessarily come out of the current year's income. An investment made in the past obviously c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is that the accumulation of income under section 11(2) is not specific and the deposits made in the bank are not as per provisions of section 11(2)(b) of the Act. The assessee made a detailed submission before the Assessing Officer and also before the Commissioner of Income Tax (Appeals). So far as, the accumulation of income, it was submitted before the Assessing Officer that it is for the purpose of construction of Vimala Women Charitable Society and also maintenance of the institution. The explanation of the assessee was simply rejected. Before the Assessing Officer the assessee filed all the details about the construction and also explained that his accumulation is for the purpose of construction and maintenance of the province of the s....