TaxTMI 
TaxTMI 
2025 (11) TMI 1910
X X X X Extracts X X X X
X X X X Extracts X X X X
....the present Petition, the Petitioner has impugned (i) the notice dated 8th August 2024, issued u/s. 148A(b) of the Income Tax Act, 1961 ("the Act"), (ii) the order dated 29th August 2024, passed u/s. 148A(d) of the Act,(iii) the notice dated 29th August 2024 issued u/s. 148 of the Act. The relevant Assessment Year (A.Y.) is 2018-19. By the Notice dated 29th August 2024, the 1st Respondent has reopened the assessment of the Petitioner for A.Y. 2018-19. The Revenue has filed its Reply dated 5th October 2024 to the Petition, which is affirmed on behalf of the 1st Respondent by one Mr. Rajesh Shahir. 3. In the present petition Rule was issued and interim relief was granted in terms of prayer clause (d) vide Order dated 23rd September, 2024. 4. The Pleadings are complete, and therefore, with the consent of the parties, we have heard the Petition finally. 5. The facts and circumstances leading to the notices and the order impugned in the present Petition are as follows: - (i) The Petitioner is a charitable Trust registered u/s. 12A of the Act. The objects of the Trust are as follows: "(a) The foundation, maintenance and support of a Technological School or Scho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m No. 10, on 29th September, 2018 which is the statement required to be furnished to the Assessing Officer u/s. 11(2) of the Act. It is indisputable that due to the obvious paucity of space in the form in the box where the purpose for accumulation is to be set out, the Petitioner had inserted "AS PER THE OBJECTS OF THE TRUST", and that the statement referred to the Resolution dated 20th September 2018, by which it was resolved that a sum of Rs. 1,00,00,000/-, out of the income of the Petitioner for the A.Y. 2018-19, would be accumulated or set apart for carrying out the following specific purposes, viz., (a) education, (b) provision of housing facilities to Parsee Zoroastrians, and (c) financial assistance to needy Parsee Zoroastrians to enable them to pay rent, charges etc. for houses or premises occupied by them. Form No. 10 and the Resolution of the Trustees of the Petitioner recording the purposes/objects for accumulation of the sum of Rs. 1,00,00,000/- were uploaded on the Income-tax portal of the Petitioner on 29th September, 2018. A copy of Form No. 10 in the petition records the receipt number and date of uploading the same. (iii) Thereafter, the Petitioner's case ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hown purpose of accumulation as "AS PER THE OBJECTS OF THE TRUST". However, as per amended provisions of section 11(2)(a) rws 11(3)(a), the assessee is expected to state the exact purpose for which the income is being accumulated & period for which said income is being accumulated. In this case the assessee has transferred aforesaid funds to the Balance Sheet without specifying the exact purpose for which accumulated funds will be utilized for the fulfilment of the object of trust claiming accumulation u/s. 11(2) of the I.T. Act. For allowing the exemption u/s. 11(2) the condition is that the trust should specify in the prescribed form the exact purpose for which the income is accumulated or set apart. It is not enough for the trustees to repeat the object of the trust but must specify a particular purpose for which the income is being accumulated. It is essential that the trust should specify its purposes and the requirement is that the purposes must have some individuality and mere repetition of the object/activity of the trust would not meet the requirement of section 11(2) of the Act. Thus, the assessee has not complied with the provisions of section 11(2)(a), hence the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion was made by the assessee was not vague but specific and concrete. Without prejudice to the aforesaid, it was submitted that even if it is assumed, without admitting, that the assessee has not stated the specific purpose of accumulation, then also the assessee is entitled to claim exemption on the basis of the aforesaid decisions which are in favour of the assessee as in all the aforesaid decisions it has been held that the benefit of accumulation should be granted to the assessee given the fact that the accumulation is sought for the purpose of its object on the basis of which the assessee was granted registration u/s.12A of the Act and the objects of the Trust are charitable in character and the purpose mentioned in Form 10 are for achieving the objects of the Trust. In the aforesaid decisions it has also been held that if the accumulation is for more than one purpose then also the assessee is entitled to exemption u/s. 11(2) of the Act. Thus, the exemption as is admissible u/s. 11(2) of the Act cannot be denied to the assessee. (xii) Thereafter, on 29th August, 2024, the 1st Respondent passed an order u/s. 148A(d) of the Act. The 1st Respondent rejected the submissio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....law; (v) that the sanction given by the 2nd Respondent is bad in law; (vi) that even on the merits of the case, no income has escaped assessment; and (vii) in any case, it is clear that the Petitioner has fully complied with the provisions of section 11(2) of the Act and the Assessing Officer has grossly erred on facts and law. 8. Mr. Mistri, the Learned Senior Counsel appearing on behalf of the Petitioner commenced arguments on the ground that the Petitioner has fully complied with the requirements of section 11(2) of the Act, and therefore, the impugned notices and the impugned order cannot be sustained. 9. Mr. Mistri submitted that as required u/s. 11(2) of the Act, the Petitioner had e-filed Form No 10 on the Income-tax Portal on 29th September 2018 along with the Resolution of the Trustees dated 20th September 2018 which had specified three purposes for accumulation. The prescribed Form No.10 specifically refers to the Resolution dated 20th September 2018 and reads as under: ".... hereby bring to your notice that it has been decided by a resolution passed by the trustees/governing body, by whatever name called, on 20/09/2018 that, out ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion No. 4941 of 2024 in the case of Sir Jamsetjee Jejeebhoy Charity Fund vs. Income-tax Officer (Exemption) Ward-2(3), Mumbai & Ors in vide order dated 7th November 2025. (v) it was pointed out that the decision of the Calcutta High Court in Director of Income-tax (Exemption) v Trustees of Singhania Charitable Trust (1993) 199 ITR 819 (Cal) was clearly distinguishable. 13. On the other hand, Mr. Gulabani, the Learned Counsel on behalf of the Revenue, submitted that the Petitioner has not complied with the requirements of section 11(2) of the Act for the reasons set out in the impugned order under section 148A(d) of the Act, and therefore, the impugned notices and order are valid. Mr Gulabani further relied on the Affidavit-in-Reply, filed on behalf of the 1st Respondent and the 2nd Respondent. 14. Mr. Gulabani re-iterated that section 11(2) of the Act has not been complied with as true and correct information was not disclosed by the Petitioner during the original assessment, and the Resolution has not been passed before 31st March 2018 or within a reasonable time. He, therefore, submitted that there was no merit in the above Writ Petition and the same be dismissed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e statement referred to in clause (a) is furnished on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the previous year: Provided that in computing the period of five 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. (emphasis supplied)." 18. On a plain reading of the section, the following are the requirements to claim the accumulation or set apart the income: - (i) The assessee must furnish a statement in the prescribed Form and in the prescribed manner to the Assessing Officer. This statement should state 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. (ii) The period for the which income is to be accumulated or set apart shall in no case exceed five years. (iii) The money so accumulated or set apart has to be invested, or to be deposited in the manner or modes specified in sub-section (5) of Secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rincipal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be. 21. In the present case, there is no dispute that the Petitioner has filed the prescribed Form No. 10 on or before the due date specified under sub-section (1) of section 139 of the Act. There is also no dispute that the income as accumulated or set apart by the Petitioner is for a charitable or religious purpose in India, which falls within the scope and ambit of the Petitioner's objects. 22. Further, Form No. 10 was filed stating that the purpose for which the Petitioner has accumulated or set apart the income was as per the objects of the trust. In view of inter alia the limited space provided in Form No. 10, which was to be filed electronically, as prescribed by the Rule, the Petitioner has made specific reference to the Resolution dated 20th September 2018, which sets out the 3 purposes for which accumulation is made. These purposes/objects are specific (though multiple), are within the scope of the Petitioner trust's objects, and are charitable in nature. The statutory format of Form No 10 clearly contemplates such statement of purpose by reference to a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing or setting apart the income of the Petitioner is sufficient and is as contemplated by section 11(2) of the Act read with Rule 17 of the Rules. The statement made in the Affidavit in reply dated 5th October 2024 that the Assessee never produced the Resolution passed on 20th September 2018 during the original assessment proceedings nor along with Form 10 appears to be erroneous and in any event is irrelevant. It is not denied by the Respondents that the Resolution is part of the record, was electronically filed as required by law, and that it is explicitly referred to in Form 10. Clearly the Resolution was before the 1st Respondent in the manner required by law. In this view of the matter the statement made in the Affidavit has no bearing on the matter, and the contention of the 1st Respondent has no relevance. 25. In any event, Form 10 is statutorily prescribed and is required to be filled in and submitted electronically. We are informed that there is no scope for the assessee to make any changes in the Form, by way of enlarging the space to be filled in. Looking at the format and the contents of Form 10, with limited space, and the fact that the prescribed Form also requires....