TaxTMI 
TaxTMI 
2025 (12) TMI 1339
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....nse to the said notices, furnished the requisite details called for viz. copy of return of income along with computation of income, copy of audited' accounts, income and expenditure account and balance sheet, audit report in Form 10B, letter of authority, copy of Trust Deed, certificate of Registration u 12A, certificate u/s. 80G, details of Trustees, etc. 4. The AO thus, perusing the aforesaid details and documents filed during the assessment proceedings, observed that the Assessee trust is registered with the Commissioner of Income Tax (Exemption), Mumbai u/s 12A under registration No.40409 and u/s 80G of the Act. The Assessee trust is also registered with the charity Commissioner, Mumbai and is engaged in the charitable activities. The main objects of the trust are: - "i). To establish communal harmony between various communities, castes and work towards for the benefit of all the communities without any discrimination as to religion, caste, creed, gender or region. ii). To provide help to the downtrodden, suppressed by the caste and creed prejudices irrespective of the region, language or religion. iii) To establish orphanages, homes for the bl....
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....lief of medical, relief of poverty or distress, relief for calamities and for social justice of public utilities without any discrimination as to religion, caste, creed, gender or region. The society need peace, tolerance, equality and social justice to function cohesively and to encourage inclusiveness. In order to make this a concrete and tangible reality, the Trust hosts the Mother Teresa Memorial International Awards for Social Justice of public utility to felicitate selfless and intrepid individuals who have channeled all of their energies and creativities towards furthering the aims of social justice as to encourage the society to imbibe these virtues of peace which are an integral part in the Constitution of India. In recent years, the thrust of Mother Teresa Memorial Awards and Harmony International Conference have been on the pressing humanitarian needs of the times. Beside this, the trust has spearheaded relief work during the Nepal floods in 2015, Kerala Floods 2018 by providing urgent essential and medical supplies. The trust compassionate intervention during natural calamities, also provide medical aid to the poor and needy, empowering children throug....
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....fied reason for applications as per the object of the trust at the limited space provided under E from no. 10. As such, trust is not over ruled any provision of section 11(2). 3. However, your good self has mentioned in your Annexure to the notice that, assessee trust has not accumulated Income u/s. 11(2) of the Income Tax Act, 1961 for the 'specified purpose'. It is mandatory that accumulation should be for specific purpose of future need. The accumulated Income of Rs. 16,20,586/- for the general purpose/ for the purpose of object of the trust. In response to this, we state that, the assessee trust has mentioned under form no. 10 with specified reason that to work towards all the communities without any discrimination as to religion, caste, creed, gender, education and social justice. Harmony Foundation's core focus is Social Justice. The objective is achieved through providing essential humanitarian aid and conducting awareness campaigns on various social issued that affect the society. The Foundation has partnered, facilitated and engaged with human rights activists and organizations in the rescue of trafficked minors from all over India for the pas....
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....r: "11(2) where eighty-five percent of the income referred to in clause(a) or clause(b) of sub-section (1) read with the explanation to that sub-section is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, namely: a) such person furnishes a statement in the prescribed form and in the prescribed manner to the to the assessing officer stating 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, which shall in no case exceed five years; b) the money so accumulated or set apart is invested or deposited in the forms or modes specified is sub-section (5). c) the 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 ret....
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...., a charitable trust, in no circumstances, can apply its income, whether current or accumulated, for any purposes other than the objects for which it stands. The very fact that the statute requires the purpose for accumulation to be specified implies such a purpose to be a concrete one, an itemized purpose or a purpose instrumental or ancillary to the implementation of its object or objects. The very requirement of specification of purpose predicates that the purpose must have an individuality. 5.5 The provision of Sub-section (2) is a concession provision to enable a charitable trust to meet the contingency where the fulfillment of any project within its object or objects needs heavy outlay to call for accumulation to amass sufficient money to implement it. Therefore, specification of purpose as required by Section 11(2) admits of no amount of vagueness about such purpose. 5.6 The view is also supported by the decision of The Hon'ble Calcutta High Court in the case of Director of Income Tax (Exemptions) Vs. Trustees of Singhania charitable Trust (1993) 199 ITR 819 (Cal). The Hon'ble Court has not even allowed the plurality of objects. Also in the case of ....
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....sure that the tax benefits extended to charitable trusts are utilized for concrete, time-bound projects or activities. A general statement, which is essentially a reiteration of the trust's broad objects, fails to provide the necessary clarity on how the specific sum of Rs. 16,20,586/- will be applied. 6.1.2. The distinction between the general objects of a trust and a specific purpose for accumulation is critical. While a trust's objects define its overall mission and range of activities, accumulation under section 11(2) is a special concession for setting aside funds for a distinct, future project that requires substantial outlay and cannot be met from the current year's income. The AO's emphasis on a "specific and realistic purpose" is entirely justified, as It aligns with the legislative intent to allow accumulation only for tangible and verifiable projects, rather than for vague or ongoing charitable endeavors. The appellant's argument that the limited space in Form No. 10 restricts their ability to provide detailed, object-wise information is a mere excuse and does not absolve them from the responsibility of identifying a precise purpose for which....
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....ow for verification of its future application. 6.3.2. In the present case, the appellant has merely reiterated a general overarching objective of the trust, which cannot be construed as a specific project or activity for which the sum of Rs. 16,20,586/- has been set apart. The cited cases generally deal with situations where the trust, though perhaps not perfectly articulating the purpose in Form 10, could nevertheless demonstrate a concrete future plan for the accumulated funds or where the context of the assessment was different. Here, the AO has explicitly highlighted the vagueness of the stated purpose, and the appellant has failed to provide any concrete or specific project details for the utilization of the accumulated income, either in their submissions or during the appellate proceedings. Therefore, the cited judgments do not provide any relief to the appellant's case where the stated purpose for accumulation is overly broad and lacks the necessary specificity required by the statute. 6.4. Contradictions and Flaws: 6.4.1. There are discernible contradictions and inherent flaws in the appellant's arguments. On one hand, the appellant claims....
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....the trust. The plurality of purpose for accumulation is not precluded, as long as the purpose is to achieve the objects of the trust, the trust cannot be denied for the benefit of entitlement as enshrined in section 11(2) of the Act. The Assessee further claimed that the provision of section 11(2) of the Act, is a concessional provision to enable a charitable trust to meet the contingency where the fulfillment of any project within its object or objects needs heavy outlay calling for accumulation to amass sufficient money to implement it. The Assessee has complied with all the conditions laid down under the provisions of the statute and the accumulated u/s 11 of the Act of Rs. 16,20,586/- which is 65% of the income of the trust specifically shown in Form No.10 in time with specified object. The Assessee further claimed that even otherwise in Form No.10 at Sl. No.1, a limited space was provided for mentioning the objects of the trust and therefore in the limited space, the Assessee has depicted one of main objects of the trust. However, it is a fact that vide resolution dated 27.08.2016 filed before the AO demonstrated the expansion of scope for applying the accumulated income, for ....
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....irtues of peace which are an integral part in the Constitution of India." 15. The AO though also taken cognizance of the such fact that the Assessee vide resolution dated 27.08.2016 has expanded the scope of application of the accumulated income, however discarded said resolution by observing that resolution is not accompanied by minutes of the meeting held in this regard, which shows that the resolution letter is given just to meet the requirements of scrutiny assessment proceedings. 16. For brevity and easy understanding, it would be appropriate to peruse the relevant provisions of section 11(2) of the Act, according to which, where 85% of the income is not applied or not deemed to have applied to charitable or religious purposes in India during the previous year but is accumulated or set apart, either whole or in part, for application to such purposes in India, such income so accumulated or set apart, shall not be included in the total income of the previous year of the person in receipt of the same, provided the following conditions are complied with. a. Such person furnishes a statement in the prescribed format and in the prescribed manner to the AO stating the ....
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....the Act. 6. We do not agree. It is true that specification of certain purpose or purposes needed for accumulations of the trust's income under s. 11(2) of the Act. At the time the purpose or purposes to be specified cannot be beyond the objects trust. Plurality of the purposes for accumulation is not precluded but it depends on the precise purpose for which the accumulation is intended. In the present case, both the appellate authorities below have recorded a concurrent finding that the income was sought to be accumulated by the assessee to achieve the object for which the assessee was incorporated. It is not the case of the Revenue that the objects of the assessee-company were not for charitable purpose. The aforenoted finding by the Tribunal is essentially a finding of fact giving rise to no question of law. 7. We, accordingly, decline to entertain the appeal. The same is dismissed." 19. This Court further observes that the Hon'ble Gujarat High Court in the case of Commissioner of Income Tax (Exemption) Vs. Bochasanwasi Shri R. Axar Purushottam Public Charitable Trust (2018) 409 ITR 591 (Guj.) has also dealt with identical issue and held that even though ....
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....ust (2018) 409 ITR 591 (Guj), where it was held that lack of declaration in Form No. 10 regarding specific purpose for which funds were being accumulated by the assessee trust would not be fatal to the exemption claimed under s. 11(2) of the Act. The Hon'ble Supreme Court (2019) 263 Taxmann.com 247 (SC) has dismissed SLP filed by the Department in the above case and has upheld the findings of the Hon'ble Gujarat High Court. 8. In this case, on perusal of facts available on record, cl. 4k of trust deed provides for extending help and relief to distressed and destitute, homeless and underprivileged and funds accumulated under s. 11(2) is covered under main objects of the trust. We, therefore are of the considered view that AO as well as learned CIT(A) has erred in denying benefit of accumulation of income under s. 11(2) of the Act. Hence, we direct the AO to delete the additions made towards denial of accumulation of income under s. 11(2) of the Act and direct him to allow benefit of accumulation as claimed by the Assessee." 21. Coming to the charitable activities carried out by the Assessee it is required to be seen, whether the Assessee carried out its activitie....
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....and democratic freedom in Yemen. (5) UNHCR (2017) - It protects and supports refugees and displaced populations globally by pro shelter, legal protection, and crisis relief. It received the MTMA for its decades-long humanitarian service to millions forced to flee conflict and persecution. 6) Medicines Sans Frontières (2015) - MSF is an international medical humanitarian organization that delivers emergency medical care in war zones, epidemics, and natural disasters. It was h with the MTMA for its fearless life-saving work in the most dangerous and underserved regions of the world. (7) Malala Yousafzai (2012) - She is a global advocate for girls' education who survived a Taliban attack and now leads the Malala Fund to empower girls through schooling. She received the MTMA for her extraordinary bravery and her unwavering commitment to ensuring education as a fundamental right for every girl. (8) H.H. The Dalai Lama (2010) - His Holiness the 14th Dalai Lama is a global symbol of peace, compassion, and non-violence, advocating for human rights and harmony. He was honoured with the MTMA for his lifelong work in promoting peace, compassion, ....
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....nteer rescue group in war-torn Syria, they risk their lives to pull civilians out of rubble and provide first-aid during airstrikes. They received the MTMA for their "immense resilience bravery operations" and in rescue under extreme conflict. (3) H.H. Abdullah bin Zayed Al Nahyan - The UAE's Minister of Foreign Affairs, was conferred the MTMA for his promotion of justice, diplomacy, and peaceful coexistence (4) Faraaz Hossain - He was posthumously honoured with MTMA for his selfless act of bravery and sacrifice, where he stood for justice till his very last breath against the ISIS Terrorist to save his two Hindu friends. His parents came to receive the awards in his honour, exemplifying deep moral conviction. (5) Selene Biffi - She received the MTMA (national category) for her humanitarian work and inspiring contributions to social justice in India. (6) Neerja Bhanot- A courageous flight attendant who gave her life to save passengers during a hijack; she was for her and honoured self-sacrifice bravery. (7) Zeenat Shaukat Ali - Known for her staunch commitment to social justice, she was honoured for her efforts in uplifting underpriv....