Karm, Mumbai vs Department Of Income Tax

आयकर अपील य अ धकरण, 'ए' खंडपीठ मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI "A" BENCH सव ी आई पी बंसल , या यक सद य एवं राजे , लेखा सद य Before S/Sh. I P Bansal,Judicial Member & Rajendra,Accountant Member आयकर अपील सं/.ITA No.6317/Mum/2011, नधारण वष/Assessment Year-2008-09 ADIT(E)-II(1) M/s. Karm Room No.507, Piramal Chambers, 17, Fairfield, 4th Road Lalbaug, Parel Vs Churchgate,Mumbai-20.

Mumbai-2. PAN: AAATK 3909 N (अपीलाथ /Appellant) ( यथ / Respondent) नधा रती ओर से/Assessee by : Shri Asghar Zain राज व क ओर से/ Revenue by :Shri Nitesh Joshi सुनवाई क तार ख/ Date of Hearing : 01-06-2015 घोषणा क तार ख / Date of Pronouncement : 01-06-2015 आयकर अ ध नयम,1961 क धारा 254(1)के अ तगत आदे श Order u/s.254(1)of the Inco me-tax Act,1961(Act) लेखा सद य राजे के अनुसार PER RAJENDRA, AM-

Challenging the order dated 14/6/2011 of CIT(A)-I, Mumbai, the Assessing Officer (AO) has raised the following Grounds of Appeal:-

"1.Whether on the facts of the case and in law the ld. Commissioner of Income tax(Appeals), Mumbai, erred in allowing accumulation of income of Rs.75,91,920/- u/s. 1192) of the I.T. Act when there was no specific purpose mentioned for the accumulation in form No.12AA.

2. The appellant prays that the order of the CIT (A)-I, Mumbai, be set aside and that of the Assessing Officer be restored.

3. The appellant craves leave to amend or alter any ground or add new ground which may be necessary."

Assessee-trust,filed its return of income on 26/9/2009. It made an application in Form No.10 alongwith return of income seeking accumulation of income under section 11(2) of the Act amounting to Rs.76.00 lacs.Vide his letter,dt. 8/9/09,the AO issued a show cause notice regarding accumulation of income u/s. 11 (2) of the Act.The assessee ,vide its letters dt.22.9.09; 10.11. 2010; 18.11.2010 ,filed details of actual amount spent on the objects in the years ended on 31.3.2005, 2006, 2007 and 2009. The AO held that the assessee was not entitled to accumulation of funds. He referred to the decision of the Hon'ble Calcutta High Court delivered in the case of trustees of Trustees of Singhania Charitable Trust (199 ITR 819) and held that the claim made by the assessee could not be allowed.Finally,he completed the assessment u/s. 143(3) of the Act and determined the income at Rs.75.91 lacs.

2.Aggrieved by the order of the AO the assessee filed an appeal before the First Appellate authority (FAA).Before him,the assessee stated that the assessee had accumulated the fund for various objects that were part of the memorandum of association, that it was carrying on the activities year on year basis, that the objects followed by it were mentioned in the resolution ITA/6317/Mum/2011,AY.08-09-Karm

passed for accumulation of income for utilization of the same for charitable purposes in a specified period, that the objects of accumulation were not general but were actual itemised objects. The assessee relied upon the cases of Hotel & Restaurant Association (261 ITR 190); Daulat Ram Education Society (278 ITR 260); Bharat Krishak Samaj (306 ITR 153); Murlidhar Sohanlal Foundation (92 TTJ 1054) and Shri Sobha Singh Public Charitable Trust (79 ITD 1). After considering the submission of the assessee,the FAA held that the assessee had sought accumulation of income towards the object of the trust, that it had duly filled Form-No.10 and had specified the objects for which accumulation was sought, that the assessee wanted to accumulate the income on account of nine objects as per memorandum of association, that none of the objects were outside of the purview of memorandum of association, that all the objects were for charitable, cultural, educational, medical and other activities for the relief and education of the poor, that the assessee was eligible for permission to accumulate the income to be used for the purpose specified in Form No.10. He referred to the decisions relied upon by the assessee and finally, he directed the AO to allow accumulation of income u/s. 11(2) of the Act.

3.During the course of hearing before us DR supported the order of AO.AR relied upon the order of FAA and referred to the judgment of Hon'ble Delhi High Court delivered in the case of Daulat Ram Education Society.

4.We have heard the rival submissions, perused the material on record.We find that the issue of accumulation of funds for specified purpose has been dealt with in various case laws relied upon by the assessee. The FAA has given a categorical finding of fact that the assessee had sought accumulation for specific purposes that were part of the memorandum of Association. Therefore, in our opinion his order does not suffer from any legal or factual infirmity. Here we would like to reproduce relevant portion of the judgment Bharat Krishak Samaj (supra)which reads as under :

" It is not necessary for a charitable trust to particularise each and every object for which accumulation is sought. It is enough if the assessee seeks accumulation for the objects of the trust. Similarly,in the matter of Daulat Ram Education Society (supra)the Hon'ble Delhi High Court has laid down the principle with regard to accumulation in following words:

....it is true that specification of a certain purpose or purposes was needed for accumulation of the trust's income under section 11(2) of the Act. At the same time the purpose or purposes to be specified cannot be beyond the objects of the trust. Plurality of the purposes of accumulation is not precluded but it depends on the precise purpose for which the accumulation is intended........."

Respectfully following the above judgments and confirming the order of FAA,we decided the effective Ground of Appeal against the AO.

As a result,appeal filed by the Assessing Officer stands dismissed.

फलतः नधा रती अ धकार वारा दा खल क गई अपील मंजूर क जाती है. Order pronounced in the open court on 1st,June,2015. आदे श क घोषणा खल ु े यायालय म दनांक 1जून, 2015 को क गई ।

Sd/- Sd/- (आई पी बंसल/I P Bansal) (राजे / RAJENDRA) या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER

2 ITA/6317/Mum/2011,AY.08-09-Karm

मुंबई/Mumbai, दनांक/Date: 01. 06.2015 व. न.स. Jv.Sr.PS. आदे श क त ल प अ े षत/Copy of the Order forwarded to : 1.Appellant /अपीलाथ 2. Respondent / यथ

3.The concerned CIT(A)/संब ध अपील य आयकर आयु त, 4.The concerned CIT /संब ध आयकर आयु त

5.DR A Bench, ITAT, Mumbai / वभागीय त न ध, ए खंडपीठ,आ.अ. याया.मुंबई

6.Guard File/गाड फाईल स या पत त //True Copy// आदे शानस ु ार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst. Registrar आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai.

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