TaxTMI 
TaxTMI 
2025 (9) TMI 1030
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....n towards charitable purposes u/s 11(2) of the Act and in erroneously adding the same to the returned income. The disallowance so made and confirmed being contrary to the provisions of law and facts, may kindly be deleted in full. 3. The ld. AO erred in law as well as on the facts of the case in charging interest u/s 234A, 234B & 234C of the Act. The appellant totally denies its liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 4. The appellant prays your honour to add, amend or alter any of the grounds of the appeal on or before the date of hearing." 3. The brief facts of the case are that the appellant is a society registered under the Rajasthan Societies Registration Act, 1958 and enjoys registration under section 12AA of the Act. It is engaged in carrying out charitable activities in the field of ophthalmology, including public awareness camps, educational initiatives, and professional training programmes for eye specialists. The appellant filed its original return of income on 01.09.2018 declaring NIL income, and a revised return on 26.10.2018, also at NIL ....
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....s made on 07.04.2018. Since the accumulation of income was not invested before the end of the previous year, the Assessing Officer's action in disallowing the claim of Rs. 95,00,000 towards application of income is upheld. Since the accumulated funds invested in the prescribed mode are to be utilised for the purpose for which it is accumulated within next five years, the date of investment is crucial to determine the succeeding five years to exhaust the funds. Since the investment of funds is made in the next financial year, even though the fund was lying in the bank account as on 31.03.2018, the appellant failed to fulfil the condition to invest the amount in the mode prescribed under Sec.11(5) during the relevant year under consideration. In view of the above position of law and factual matrix, even though investment is made, there is no relaxation to allow the claim in the year under consideration and accordingly addition made under Sec. 11(2) is upheld. In the result, the appeal is "Dismissed". 6. The ld. Authorised Representative submitted that the entire amount was kept in a Scheduled Bank account as on 31.03.2018, that there was no diversion or misap....
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....ion (1) of section 139 for furnishing the return of income for the previous year:" It can be clearly seen from the provision that the only two conditions prescribed are: 1. A Statement i.e. Form 10B as per Rule 17 of the Income-tax Rules; 1962, should be furnished within the time limit mentioned in the S. 11(2)(c) (i.e. on or before the furnishing the return of income u/s 139(1) of the Act). 2. The money so accumulated or set apart is invested or deposited in the forms or modes specified in S. 11(5) of the Act (without any stipulation of investing before the due date u/s 139 with the P.Y) In the present case, the appellant has duly complied with both these conditions. Form No. 10 was filed electronically on 01.09.2018, which was well within the due date prescribed u/s 139(1) of the Act for A.Y. 2018-19. Further, the amount of Rs.95,00,000/- so accumulated was maintained in the appellant's bank account with Oriental Bank of Commerce-a Scheduled Bank within the meaning of Section 11(5)(iii)-as on 31.03.2018 (i.e within the previous year only) and was subsequently transferred into multiple fixed deposits on 07.04.2018 and 09.04.2018. ....
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....nd earmarking of charitable funds, which stands fulfilled in this case. The resolution was passed, Form No. 10 was filed on 01.09.2018 (within the due date u/s 139(1) of the Act, and the deposit was made into the prescribed mode promptly within the stipulated time. Alternatively, mere transfer of fund within the same bank cannot defeat the exemption (when the funds were never diverted and always retained for the intended purpose). 4. Substantial compliance-no malafide-exemption cannot be denied: The Hon'ble Courts have consistently held that minor technical lapses (though not in this case yet assuming so), cannot defeat genuine claims for exemption by charitable institutions. Reliance is placed on: * DIT (Exemption) v. Agrim Charan Foundation (Del.), (2001) 119 Taxman 0569 * CIT v. Nagpur Hotel Owners Association (SC) [2001] 114 Taxman 255 (SC) In the present case, the deposit was bona fide, timely, and in the approved mode. The amount was fully utilized for the declared charitable purpose within the permissible five-year period. No malafide or diversion has been alleged. Hence, denial of exemption is wholly unwarranted. 5. Time....
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....e, citing failure to comply with Section 11(2) r.w.s. 11(5). 2. Grounds of Revenue's Case: -The assessee did not invest the accumulated amount within the financial year (ending 31.03.2018) as required under Section 11(2) r.w.s. 11(5). The FDRs were made on 07.04.2018 and 09.04.2018, i.e., after the end of the relevant year. -Though the assessee filed Form 10 on 01.09.2018, it failed to submit the requisite resolution prior to filing the return, violating clause (c) of Section 11(2). - The investment made after the financial year does not qualify for exemption under Section 11(2). 3. Legal Provisions Involved: -Section 11(2): Permits accumulation of income for specific purposes subject to investment in modes specified under Section 11(5). - Section 11(5): Mandates investment of such accumulated income in scheduled bank deposits before the end of the relevant financial year. - Rule 17 r.w.s. 11(2) (c): Requires Form No. 10 and governing body resolution before the due date of return filing. 4. Findings of CIT(A): -CIT(A) dismissed the appeal holding that: - The investment of Rs.95,00....