2026 (5) TMI 82

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....tion is as follows: Sr. No. Particulars Amount (Rs.) a. Gross Receipts 94,21,849/- b. Less: 15% benefit u/sec. 11(1)(a) (14,13,277/-) c. Less: Application of income for purpose of trust (Accepted by Ld. AO) (29,43,668/-) d. Net Receipt available for Accumulation 50,64,903/- 3. During the assessment proceeding the assessee submitted all the evidence for fulfilling the substantive conditions for accumulation of 11(2) of the Act. But the Ld. AO has rejected the assessee's claim u/sec. 11(2) for benefit of accumulation amount to Rs. 75,00,000/- was duly denied on the ground that the registration certificate u/sec. 12A/12AA is not available, purpose of accumulation stated in Form No.10, differs from submission made during the assessment proceeding that is difference of the purpose mentioned in trustee and mentioned in Form No.10 is different and the investment mode is not as per section 11(5) r.w.s. 11(2) of the Act. The aggrieved assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A) the assessee produced the certificate of registration duly approved by the revenue u/sec. 12A/12AA of the Act. The Ld. CIT(A) considered that ....

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....r and renovation," as well as acquisition or construction Jirnodhar of Derasaraji and Upashraya, fall squarely within the religious and charitable objects of the assessee. With regard to the validity of investments, it was submitted that the assessee has complied with the provisions of section 11(5). The Ld. AR contended that the investment of Rs. 25,00,000/- made on 05.04.2018 cannot be disregarded merely because it falls in the subsequent financial year, as the same was made immediately after the close of the previous year and, in any event, within the relevant assessment year. It was further argued that while there is a prescribed time limit for filing the prescribed form before the revenue authorities, no such specific time limit is prescribed for making the investment. The only requirement is that the investment should be made before the filing of the return of income or the prescribed form. However, the assessee's contention was rejected by the Ld. CIT(A), who upheld the order of the Ld. AO. Being aggrieved, the assessee is in appeal before us. 6. The Ld. DR, on the other hand, supported the orders of the revenue authorities and submitted that the Ld. CIT(A) has made speci....

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....ed that the said amounts had been invested in Fixed Deposits with scheduled banks and units of mutual funds as prescribed in section 11(5) of the Act and the detail of which are as under: Mode of investment Date of investment Amount Investment in fix deposit with HDFC Bank 05.04.2018 25,00,000/- Investment in fix deposit with HDFC Bank 10.04.2018 6,00,000/- Investment in fix deposit with HDFC Bank 05.04.2019 35,00,000/- Units of Mutual funds 15.02.2020 10,00,000/- Total   76,00,000/- These contentions of the appellant have been duly examined and are found to be devoid of merit for the reasons discussed below. Firstly, the trust was established to maintain, repair, renovate the Jimoodhar of Temple and Uppasaraya and repair for garage, but the appellant in its submission made during the course of assessment proceedings had clearly stated that the accumulation of income by trust was meant for acquiring a suitable property in the vicinity of the temple, which is not the objective of the trust for which the trust was established. Thus, the claim of the appellant stands unsubstantiated. Secondly, the contention ....

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....pted by him during assessment proceedings and has not been found to be false declaration or information provided by assessee therein. In any event, the accumulation of funds cannot travel beyond the objects of assessee. The decisions relied on by Ld.AR reproduced hereinabove categorically deals with such circumstances. We place reliance on the decision of Hon'ble Gujarat High Court in the case of CIT(Exemptions) vs. Bochasanwasi Shri Akshar Purshottam Public Charitable Charitable turst (supra) and Hon'ble Telangana and Andhra Pradesh High Court in the case of Samaj Seva Nidhi vs. ACIT (supra) in support of the same. We, therefore, direct Ld.AO to consider the claim of assessee based on the above discussion and having regards to the ratio laid down by the decisions referred to hereinabove." 8. We have heard the rival submissions and perused the material available on record. It is an undisputed fact that the assessee is a registered trust and had duly filed Form No. 10 within the prescribed time, specifying the purposes for which the income was accumulated. The accumulation of income to the extent of Rs. 50,64,903/- is also not in dispute. On perusal of the details of inve....