TaxTMI 
TaxTMI 
2017 (8) TMI 954
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.... was accumulated. 4. The learned Assessing Officer erred in making an addition of Rs. 21,00,000 to the returned income holding that the amount accumulated under section 11 (2) of the Income Tax Act, 1961 out of income for the financial year 2003-04 was not utilised up to the previous year relevant to the assessment year 2010-11. 5 The learned Assessing Officer erred in charging interest uls 234C without authority under the Act. 6. The order of 'the learned Commissioner of Income Tax' (Appeals) suffers from plethora of errors including incorrect reference to Sections of the Income Tax Act, quoting incorrect. Form No. and incorrect application of the relevant provisions. 7. The learned Commissioner of Income Tax (Appeals) erred in holding that the accumulation of Rs. 21,00,000 out of income. for the assessment year 2004-05 was required to be applied within five years i.e. up to assessment year 2009-10. 8. The learned Commissioner of Income Tax (Appeals) erred in' holding that the accumulation of Rs. 21,00,000 out of income for the financial year 2003-04 was without any specific purpose, illegal and not allowable. 9. Th....
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....eal before the Tribunal. 4. At the time of hearing, Ld. Counsel of the assessee stated that during the current year, the assessee has received a sum of Rs. 4,74,75,182/- which is mainly for the grants received from the Ministry of External Affairs and other Ministries and has incurred the expenditure of Rs. 4,77,78,369/- and as such there is excess expenditure of Rs. 3,03,181/-. He further submitted that accumulated income of AY 2004-05 of Rs. 21 lacs has been spent during the current year and the same is eligible for standard deduction/ standard accumulations @15% from the current year income u/s. 11(1)(a) of the Act. Therefore, he requested that earlier accumulated income has been spent in the current year and as such the AO as well as Ld. CIT(A) are not justified to make the addition and affirming the same, hence, he requested that the same may be deleted. In support of his contention, he has filed a small Paper Book containing pages 1 to 37 in which he has attached the copy of the written submission filed before the Ld. CIT(A); Memorandum of Association and Rules; Copy of Tax computation and Audit Report in Form 10BB; Application in Form 10 filed alongwith tax return for AY ....
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....ys exemption under section 10(23C)(iv) of the Act. 3. As per the form No. 10 Submitted along with the return of Income for the assessment year 2004- 05, Rs. 21,00,000/- was accumulated under section 11(2) of the Act to carry out research activity as envisaged in the Memorandum of Association and Rules of RlS. Copy of the Form No. 10 is attached as [Annex'1'} herewith for your ready reference. 4. Following are the main objectives of RIS as per Memorandum of Association and Rules: a} To promote the concept of self-reliance among the non-aligned and other developing' countries and to forge and maintain a system of effective links amongst the various research institutions of these countries with a view to utilize their research capabilities or the maximum common benefits; b) To undertaken and/ or commission analytical studies, to evaluate and interpret information and data. to conduct or cause to conduct research in current trends and future projection concerning social, economic, scientific and technological matters on a global and regional basis as appropriate; c) To disseminate factual information and data relating to diverse ....
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.... was utilized during the year. 9. Hence it may not be pre to state that the past accumulations have not been utilized. 10. It is prayed that the accumulation out of the income for the previous year relevant to, the assessment year 2004-05 may please be treated as utilized during the previous year relevant to the assessment year 2010-11 for the purpose mentioned in the Form No. 10 filed along with the Return 6f Income for the assessment year 2004- 05 and that accumulation should not be taxed as income of the previous year relevant to the assessment year 2010-11." 6.1 After examining the aforesaid reply of the assessee, the AO has rejected the request of the assessee on the ground that assessee has failed to produce any documentary proof for expenditure of Rs. 21 lacs on specific purpose of research activity for which it has been accumulated. Similarly, the Ld. First Appellate Authority has also upheld the order of the AO by holding that assessee is required to file Form No. 10B as per Rule 17 to the AO, but in the Form No. 10B filed by the assessee, no specific purpose has been specified by the assessee for additional accumulation of income u/s. 11(2)(a) of the ....