IMPERIAL COLLEGE INDIA FOUNDATION,MUMBAI V. INCOME TAX OFFICER EXEM WARD 1(3), MUMBAI

ITA 4452/MUM/2025

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The case involves the Imperial College India Foundation, a charitable trust engaged in educational activities, which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, confirming the disallowance of income accumulated under Section 11(2) of the Income Tax Act, 1961. The disallowance was initially made by the Assessing Officer on the grounds that the purpose stated for accumulation in Form 10 was too generic. The Tribunal considered the specific purposes outlined in the Board Resolution and the actual utilization of the funds in subsequent years, referencing a similar case (Bal Jeevan Trust V/s ITO) where the Tribunal had allowed the appeal under similar circumstances.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775762 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 10-07-2025
• Other Referred Cases: Bal Jeevan Trust V/s ITO [ITA No. 1872/Mum/2023, dated 12/12/2023]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE
• Keywords: Set aside; Opportunity of being heard; Charitable institution
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 4452/MUM/2025 (Assessment Year: 2016-17) Imperial College India Foundation 41/44, S P Centre Minoo Desai Road, Colaba, Mumbai- 400005 [PAN: AABC17810E] …………. Appellant Income Tax Officer Exem. Ward 1(3), Mumbai Cumballa MTNL Bldng, Cumbala Road, Mumbai- 400020 Vs …………. Respondent Appearance For the Appellant/Department For the Respondent/Assessee : : Shri Sambhav Shah Shri Virabhadra Mahajan Date Conclusion of hearing Pronouncement of order : : 02.09.2025 10.09.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order, dated 14/05/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 10/12/2018, passed under Section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2016-2017. 2. The Assessee has raised following grounds of appeal : “The Appellant prefers the following Grounds of Appeal against the order dated 14.05.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, under section 250 of the Income-tax Act, 1961: Printed from counselvise.com 2 ITA No 4452/Mum/2025 Assessment Year 2016-2017 1. On the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeal) has erred in confirming the disallowance u/s 11(2) of the Income Tax Act, 1961 merely on ground that specific outline for purpose of accumulation was not mentioned in Form 10. 2. On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) has erred in not considering the Board Resolution wherein it has clearly mentioned that accumulation shall be utilized only for Education purpose and not for any other objects of the trust. 3. On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) has erred in not appreciating the fact that assessee in its Board Resolution has clearly mentioned the specific objects for which funds are accumulated and not merely a general discussion as alleged. 4. On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) has erred in not appreciating that assessee has subsequently utilized the amount for the object of the trust which were in accordance with the objects mentioned in the Board Resolution. 5. The Learned Commissioner of Income Tax (Appeals) failed to appreciate that the Appellant had complied with all the conditions prescribed under section 11(2), including: (1) timely furnishing of Form No. 10, (ii) specifying the amount and period of accumulation, (iii) investing the accumulated amount in prescribed modes under section 11(5), and (iv) application of the accumulated income within the permissible period. 6. On the facts and circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) has erred in not appreciating the judicial pronouncement submitted by assessee which supports the assessee's contention. 7. Under facts and circumstances of the case the Learned Commissioner of Income Tax (Appeal) had passed the order without considering the facts and submissions put before him as also without allowing the appellant sufficient opportunity of being heard. 8. On the basis of facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) failed to provide an personal hearing through video conferencing despite same being specifically asked for during the appellate proceedings. 9. Each of the above ground be considered as separate from the other grounds. Printed from counselvise.com 3 ITA No 4452/Mum/2025 Assessment Year 2016-2017 10. The appellant craves leave to add, amend, alter or delete the above Grounds of Appeal.” 3. We have heard both the side and have perused the material on record. 4. The Assessee is a charitable trust engaged in the educational activities which includes granting of scholarships to the students. For the Assessment Year 2016-17, assessment was framed on the Assessee vide Assessment Order, dated 10/12/2018. The Assessing Officer disallowed the income amounting to INR.62,28,989/- accumulated under Section 11(2) of the Act holding that the purpose stated for accumulation [i.e. “towards the object of the trust”] was generic. According to the Assessing Officer, it was mandatory requirement that purpose stated for accumulation should be specific. The appeal preferred by the Assessee before the Ld. CIT(A) did not yield any favorable results for the Assessee as the Ld. CIT(A) vide impugned Order, dated 14/05/2025, confirmed the disallowance observing that the Assessee has admittedly used expression “for the object of the trust” in Form 10 which is broad and does not meet the requirements envisaged in Section 11(2) of the Act. Form No. 10 is a statutory vehicle for communicating the intent of accumulation and its sanctity must be preserved. Being aggrieved the Assessee has now preferred the present appeal before the Tribunal on the grounds reproduced in Paragraph No. 2 above. 5. During the course of hearing both side reiterated the stands taken before the authorities below. We have given thoughtful consideration to the rival submission and have perusal the material on record. We find that Form No. 10 filed by the Assessee stated the purpose of accumulation as “for the objects of the trust”. However, the said Form 10 was supported by the Board Resolution, dated 20/09/2016, passed by the Board of Direction of the Assessee- Printed from counselvise.com 4 ITA No 4452/Mum/2025 Assessment Year 2016-2017 Company registered under Section 8 of the Companies Act, 2013. A perusal of the aforesaid Board Resolution shows that the accumulated amount was to be utilized for providing ‘scholarship (educational purpose)’. During the course of hearing Ld. Authorized Representative for the Assessee had placed reliance upon the decision of Mumbai Bench of the Tribunal in the case of Bal Jeevan Trust V/s ITO [ITA No. 1872/Mum/2023, dated 12/12/2023] wherein in identical facts and circumstances, the Tribunal had deleted the disallowances in respect of income accumulated under Section 11(2) of the Act after examining the actual utilization of the accumulated funds in the subsequent years. In the present case also it was contended by the Learned Authorised Representative for the Assessee that in the subsequent years the funds have been utilised for the purpose stated in the aforesaid Board Resolution. We find that in the Submission, dated 16/09/2024, filed before the Ld. CIT(A), reproduced at page 11 if the impugned order it was stated as under: “It is also pertinent to mote that the appellant has spent the entire amount of Rs.62,28,989/- before 31.03.2021 i.e. within the period of 5 years from the end of the year for which accumulation was made.” 6. It is not the case of the Revenue that in the subsequent years the accumulated funds amounting to INR.62,28,989/- was not utilized by the Assessee. Therefore, taking into consideration the above, we deem it appropriate to set aside the Order, dated 14/05/2025, passed by the CIT(A) and remand the issue back to the Assessing Officer with the following directions. We direct the Assessing Officer to verify Board Resolution, dated 20/09/2016, and for the same the Assessee is directed to file a certified copy of the Board Resolution before the Assessing Officer. Thereafter, the Assessing Officer is further directed to verify the utilization of accumulation amounting to INR.62,28,989/- in subsequent years by the Assessee as per the Board Resolution [i.e. for the object of the trust – Scholarships Printed from counselvise.com 5 ITA No 4452/Mum/2025 Assessment Year 2016-2017 (Educational Purposes)]. We hold that to this extent we hold that the vagueness of the purpose of accumulation as stated in Form 10 would not be fatal and the Assessee would be entitled to claim benefit of Section 11(2) in respect of the same. Accordingly, the disallowance to the extent the accumulated amount has been utilized for the aforesaid purpose shall be deleted by the Assessing Officer. 7. In terms of aforesaid ground No. 1 to 10 is allowed for statistical purposes. 8. In the result the present appeal is allowed for statistical purposes. Order pronounced on 10.09.2025. Sd/- Sd/- (Vikram Singh Yadav) Accountant Member (Rahul Chaudhary) Judicial Member मुंबई Mumbai; िदनांक Dated :10.09.2025 Disha Raut ,Stenographer Printed from counselvise.com 6 ITA No 4452/Mum/2025 Assessment Year 2016-2017 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. आयकर आयुƅ/ The CIT 4. Ůधान आयकर आयुƅ / Pr.CIT 5. िवभागीय Ůितिनिध ,आयकर अपीलीय अिधकरण ,मुंबई / DR, ITAT, Mumbai 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// उप/सहायक पंजीकार /(Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुंबई / ITAT, Mumbai Printed from counselvise.com "