Gujarat Chief Minister's Relief Fund, Gandhinagar V. The Dy.CIT.,GNR Circle, Gandhinagar

ITA 3105/AHD/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1296 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH
• Assessee Lawyers: H P SINGH
• Keywords: Charitable institution; Principle of natural justice; Question of law
• Section: 143(3); 244A; 234B; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE S/SHRI RAJPAL YADAV, JM, & MANISH BORAD, A M. ITA NO.3105/AHD/2011 ASST. YEAR: 2008-09 GUJARAT CHIEF MINISTER RELIEF FUND, 7 TH FLOOR, BLOCK NO.11, NEW SACHIVALAYA COMPLEX, GANDHINAGAR. VS DY. CIT, GANDHINAGAR CIRCLE, GANDHINAGAR. (APPELLANT) (RESPONDENT) PA NO. AAATG 2587L APPELLANT BY SHRI H. P. SINGH, AR RESPONDENT BY SHRI JAGDISH, SR. DR DATE OF HEARING: 20/10/2015 DATE OF PRONOUNCEMENT: 4/11/2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS APPEAL OF THE ASSESSEE HAS BEEN FILED AGAINST THE ORDER OF CIT(A), GANDHINAGAR, AHMEDABAD DATED 28.9.2011 IN A PPEAL NO.CIT(A)GNR/115/2010-11. ASSESSMENT FOR ASST. YEAR 2008-09 WAS FRAMED BY DCIT, GANDHINAGAR CIRCLE, GANDHINAGAR UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHOR T THE ACT) ON 10 TH DECEMBER, 2010. ASSESSEE HAS RAISED FOLLOWING GROUN DS OF APPEAL: 1. LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMI NG ACTION OF AO REJECTING ACCUMULATION OF FUNDS U/S 11(2) OF THE AC T. LD. CIT(A) OUGHT TO HAVE HELD THE APPELLANT ELIGIBLE FOR BENEF IT OF ACCUMULATION AS APPELLANT FULFILLED THE CONDITIONS OF THE SECTION. ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 2 2. LD. CIT(A) ERRED IN LAW AND ON FACTS IN NOT APPR ECIATING THE FACT THAT THE OBJECTS ISSUED IN FORM NO.10 FOR WHICH ACC UMULATION WAS SOUGHT WERE THE SPECIFIC OBJECTS OF THE APPELLA NT TRUST. LD. CIT(A) OUGHT TO HAVE GRANTED THE BENEFIT CLAIMED BY THE APPELLANT WHEN THE OBJECTS LISTED FOR ACCUMULATION WERE FOUND TO BE CHARITABLE IN NATURE BY BOTH THE AUTHORITIES. 3. LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMI NG VIEW TAKEN BY AO IN REJECTING ACCUMULATION IN ABSENCE OF ASSIGNIN G ANY SPECIFIC REASONS TO THE VAGUENESS OF OBJECTS LISTED IN FORM NO.10. BOTH THE LOWER AUTHORITIES FAILED TO APPRECI ATE THAT THE OBJECTS FOR WHICH ACCUMULATION WAS SOUGHT WERE SPEC IFIC AND CONCRETE IN NATURE. 4. BOTH THE LOWER AUTHORITIES ERRED IN LAW AND ON F ACTS IN NOT TAKING INTO COGNIZANCE CASE LAWS RELIED UPON BY THE APPELL ANT DIRECTLY APPLICABLE TO THE FACTS OF THE CASE AND WITHOUT DIS TINGUISHING THEM REJECTED THE CLAIM OF ACCUMULATION OF FUNDS TH AT OUGHT TO HAVE BEEN GRANTED TO THE APPELLANT. THIS ACTION OF BOTH THE LOWER AUTHORITIES IS IN CLEAR BREACH OF PRINCIPLES OF NATURAL JUSTICE AND THEREFORE DESERVES TO BE QUASHED. 5. LEVY OF INTEREST U/S 234A AND 234B OF THE ACT IS NOT JUSTIFIED. 6. WITHDRAWAL OF INTEREST U/S 244A OF THE ACT IS NO T JUSTIFIED. 7. INITIATION OF PENALTY U/S 271(1)(C) OF THE ACT I S NOT JUSTIFIED. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, ED IT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEA L AT THE TIME OF OR BEFORE THE HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE I.E. GUJARAT CHIEF MINISTER RELIEF FUND FILED ITS RETURN OF INCOME AT RS.NIL ON 08/12/2008. THE CASE WAS SELECTED FOR SCRUTINY A ND NOTICE U/S 143(2) WAS ISSUED ON 7.9.2009 AND DULY SERVED ON TH E ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER CAME ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 3 THROUGH THAT THE ASSESSEE HAS SET APART RS.8,21,58, 996/- AS SPECIFIED UNDER SECTION 11(2)(A) OF THE ACT FOR BEING USED IN SUBSEQUENT YEARS AND, THEREFORE, CALLED FOR COPY OF FORM NO.10 WHICH WAS FURNISHED BY THE ASSESSEE AS PER THE PROVISIONS OF SECTION 11(2) R.W. RULE-17 OF THE I.T. RULES, 1962. ON PERUSAL OF FORM NO.10 THE ASSE SSING OFFICER OBSERVED THAT THE OBJECT FOR WHICH THE ASSESSEE HAS SET APART THE FUNDS OF THE TRUST IS NOT SPECIFIC AND WAS ONLY FOR A GENERAL PURPOSE AND, THEREFORE, REJECTED ASSESSEES APPLICATION MAD E IN FORM NO.10 FOR SETTING APART OF RS.8,21,58,996/- AND ADDED IT TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE THE LD . CIT(A) WHO CONFIRMED THE ADDITION MADE BY ASSESSING OFFICER BY OBSERVING AS UNDER :- 6. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND TH E SUBMISSIONS OF THE ASSESSEE. BOTH THE APPELLANT AND THE REVENUE AGREE THAT THE ASSESSEE HAS GIVEN THE SAME AND ALL THE PURPOSES FOR ACCUMULATION OF FUNDS WHICH ARE TH E PURPOSES OF CHARITABLE TRUST ITSELF. THE ISSUE WAS EXAMINED BY HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS.M.CT. MUTHI AH CHETTIAR FAMILY TRUST AND ORS. 245 ITR 400 (MAD), A FTER CONSIDERING THE DECISION OF HONBLE APEX COURT IN T HE CASE OF S.RM.M.CT.M.TIRUPPANI TRUST VS. CIT (1998) 230 ITR 636 AS UNDER: THE SCHEME OF SECTION 11 OF THE ACT WAS EXAMINED B Y THE APEX CURT IN S.RM.M.CT.M. TIRUPPANI TRUST VS. CIT 145 CTR (SC) 176 : (1998) 230 ITR 636 AT P.640 (SC): TC S23 .2415 AS UNDER : UNDER SECTION 11(A) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST FOR CHARITY, TO THE EXTENT THAT SUCH INCOME I S APPLIED FOR ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 4 CHARITABLE OR RELIGIOUS PURPOSES WILL BE EXEMPT FRO M INCOME-TAX. WHERE THE INCOME OR THE ENTIRE INCOME IS NOT SO SPE NT, BUT IS ACCUMULATION, IT WILL BE EXEMPT TO THE EXTENT OF 25 PER CENT OF ITS TOTAL INCOME OR RS.10,000 WHICHEVER IS HIGHER. UNDE R S.11(2) IF THE TRUST DESIRES TO ACCUMULATE MORE THAN 25 PER CE NT OF ITS INCOME AND WANTS TO CLAIM EXEMPTION FROM INCOME-TAX IT HAS TO COMPLY WITH THE CONDITIONS WHICH ARE LAID DOWN IN S .11(2)(A) AND (B). THE FIRST CONDITION IS THAT A NOTICE IN WR ITING SHOULD BE GIVEN TO THE ITO IN THE PRESCRIBED MANNER SPECIFYIN G THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED A ND THE PERIOD FOR WHICH THE INCOME IS TO BE ACCUMULATED. T HE PERIOD SHOULD NOT EXCEED TWO YEARS. RULE 17 OF THE IT RULE S 1962 PRESCRIBES THAT THE NOTICE WHICH IS REQUIRED TO BE GIVEN UNDER S.11(2)(A) SHOULD BE IN FORM NO.10. THE SECOND COND ITION IS THAT THE AMOUNT SO ACCUMULATED HAS TO BE INVESTED IN ANY GOVERNMENT SECURITY AS SPECIFIED IN S.11(2)(B). THE TRUST IS ALLOWED TO ACCUMULATE ITS INCOME FOR A MAXIMUM PERIOD OF TEN YEARS. THE CONDITION IS THAT THE TRUS T SHOULD SPECIFY IN THE PRESCRIBED FORM THE PURPOSE FOR WHIC H THE INCOME IS ACCUMULATED OR SET APART. IT IS NOT ENOUGH FOR T HE TRUSTEES TO REPEAT THE OBJECTS OF THE TRUST BUT MUST SPECIFY A PARTICULAR PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED ( EMPHASIS SUPPLIED). WE ARE IN AGREEMENT WITH THE VIEW OF THE CALCUTTA HIGH CURT IN DIRECTOR OF IT VS. SINGHANIA CHARITABL E TRUST (1993) 199 ITR 819 (CAL) : TC 23R.1317 WHEREIN THE CALCUTT A HIGH COURT HELD THAT THE LONG-TERM ACCUMULATION SHOULD B E FOR A DEFINITE AND CONCRETE PURPOSE OR PURPOSES AND THE C HARITABLE TRUST CANNOT USE ITS OBJECTS AS THE PURPOSES FOR TH E ACCUMULATION OF THE INCOME UNDER S.11(2) OF THE ACT . IT IS ONLY BY MENTIONING THE PURPOSES SPECIFICALLY, IT WILL BE POSSIBLE FOR THE ITO TO MONITOR THE SITUATION WHETHER THE TRUST HAS APPLIED ITS ACCUMULATED INCOME FOR THE PURPOSES MENTIONED IN FO RM NO.10, THEREFORE, IT IS ESSENTIAL THAT THE TRUST SHOULD SP ECIFY ITS PURPOSES AND THE REQUIREMENT IS THAT THE PURPOSES M UST HAVE SOME INDIVIDUALITY AND MERE REPETITION OF THE OBJEC TS OF THE TRUST WOULD NOT MEET THE REQUIREMENTS OF S.11(2) OF THE A CT. (EMPHASIS SUPPLIED) ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 5 IN THE INSTANT CASE, THERE IS NO INDIVIDUALITY OF T HE PURPOSES WHICH IS THE ESSENTIAL REQUIREMENT AS PER THE HONB LE MADRAS AND CALCUTTA HIGH COURT. IT IS MERELY REPETITION OF THE OBJECTS OF THE TRUST WHICH WOULD NOT MEET THE REQUIREMENTS OF SEC.11(2) OF THE ACT AS HAS BEEN HELD BY THE HIGH COURTS. FOLLOW ING THE ABOVE DECISIONS, I AGREE WITH THE AO THAT ALTHOUGH MULTIPLICITY OF THE PURPOSES CAN BE THERE, BUT WHERE ALL THE OBJ ECTS OF THE TRUST ARE LISTED AS THE PURPOSE OF ACCUMULATION, TH E REQUIREMENTS OF THE SUB-SECTION (2) OF SECTION 11 A RE NOT MET. THE PROVISION OF SUB-SECTION IS TO ALLOW ACCUMULATI ON WHERE AFTER APPLICATION OF MIND TO THE CONTINGENCIES OF T HE SITUATION AND ITS REQUIREMENT IN FULFILLMENT OF OBJECTS OF TR UST, IT IS FELT THAT ACCUMULATION IS REQUIRED FOR SOME SPECIFIC PURPOSE, BY THE TRUST. IN THE INSTANT CASE, THE ACCUMULATION IS SOU GHT WITHOUT ANY SPECIFIC PURPOSE IN MIND BUT JUST TO POSTPONE T HE APPLICATION OF FUNDS IT WAS REQUIRED TO MAKE FOR AL L THE OBJECTS OF THE TRUST. THIS DEFEATS THE PURPOSE OF THE SUB-SECT ION AND IS NOT PERMISSIBLE AS CLEARLY HELD BY THE HONBLE COURTS. THE DECISION OF THE AO IS THEREFORE UPHELD AND THE GROUNDS OF AP PEAL ARE DISMISSED. 4. AGGRIEVED, ASSESSEE IS NOW IN SECOND APPEAL BEFO RE THE TRIBUNAL. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE MAINLY, THE GUJARAT STATE CHIEF MINISTER RELIEF FUN D IS A TRUST UNDER THE CHAIRMANSHIP OF CHIEF MINISTER OF GUJARAT AND R EVENUE MINISTER, PRINCIPAL SECRETARY OF THE STATE AND THE SECRETARY, DEPARTMENT OF REVENUE OF THE STATE AS MEMBERS. THE MAIN FUNCTION OF THE TRUST IS TO PROVIDE RELIEF IN CASE OF NATURAL CALAMITY, MEDICAL RELIEF TO THE POOR PEOPLE, FINANCIAL ASSISTANCE TO THE WIDOWS OF SOLDI ERS DIED IN ACTION, SURVIVORS OF MASS MISHAPS LIKE EARTHQUAKE, FLOOD, D ROUGHT ETC. ALL THESE ACTIVITIES OF THE TRUSTS ARE SIMILAR TO THE O BJECTS OF PRIME MINISTER RELIEF FUND. ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 6 5. THE LD. AR FURTHER SUBMITTED THAT THE TRUST REGU LARLY RECEIVES FUND/CONTRIBUTION DURING THE YEAR AND SINCE THE OBJ ECTS OF THE TRUST ALSO INCLUDE PROVIDING RELIEF IN CASE OF NATURAL CA LAMITY, FINANCIAL ASSISTANCE TO WIDOWS OF SOLDERS AND THESE OBJECTS A RE NOT CERTAIN TO OCCUR EVERY YEAR AND THERE ARE ALWAYS POSSIBILITY O F SUCH INCIDENTS IN THE NEAR FUTURE AND FOR THIS VERY REASON CERTAIN FU ND IS ACCUMULATED IN SET APART TO BE UTILIZED FOR THE OBJECTS OF THE TRU ST I.E. MEDICAL RELIEF, DEATH RELIEF, FINANCIAL ASSISTANCE AND JAWAN RAHAT. THE TRUST DEED REQUIRES THE TRUST TO UTILIZE ITS FUND FOR CHARITAB LE PURPOSES WHICH ARE MEDICAL RELIEF, DEATH RELIEF AND FINANCIAL ASSISTAN CE TO JAWAN RAHAT. IN THE APPLICATION SEEKING EXEMPTION FURNISHED IN F ORM NO.10, THE TRUST HAS STATED THESE OBJECTS. IT WAS TRUE THAT THE TRUS T HAS MENTIONED THAT THE FUNDS HAVE BEEN ACCUMULATED FOR ALL THE OBJECTS FOR WHICH THE TRUST WORKS BUT PLURALITY OF PURPOSE IS PERMITTED A ND IF IT SO HAPPENS THAT THE TRUST HAS ONLY FEW OBJECTS IT MAY WELL UTI LIZE THE FUNDS FOR ALL THE OBJECTS AND PURPOSES. 6. THE LD. AR ALSO TOOK US THROUGH THE FORM NO.10 A ND ASSESSMENT ORDERS FOR THE PREVIOUS YEARS WHEREIN AS SESSEES CLAIMS FOR SETTING APART OF FUNDS HAVE BEEN ACCEPTED BY TH E ASSESSING AUTHORITIES EVEN WHEN THE ASSESSEE HAS MENTIONED TH E PURPOSE OF SETTING APART OF THE FUNDS HAS TO BE APPLIED FOR TH E OBJECTS OF THE TRUST. 7. THE LD. AR APPRAISED THAT ASSESSEES APPLICATION FOR ACCUMULATING FUNDS FOR THE PURPOSE OF TRUST AS PER THE PROVISIONS OF SECTION 11(2) OF THE ACT HAS BEEN ALLOWED BY THE AS SESSING OFFICER FOR ASST. YEARS 2003-04 AT RS.26,95,88,349.37, FOR ASST . YEAR 2006-07 AT ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 7 RS.62,70,62,352.35, FOR ASST. YEAR 2007-08 AT 66,03 ,42,786/-, FOR ASST. YEAR 2010-11 AT RS.16,60,04,187/- AND RS.33 C RORES FOR ASST. YEAR 2011-12 WHICH VERY WELL PROVES THAT THE INCOME -TAX DEPARTMENT HAS BEEN CONSISTENTLY ALLOWING THE ASSESSEE TO SET APART THE FUNDS FOR THE PURPOSES OF THE TRUST UNDER SECTION 11(2) OF TH E ACT AND ALSO ALLOWING THE CLAIM IN THE YEARS AFTER THE YEAR UNDE R APPEAL. TO SUPPORT HIS CASE, THE LD. AR ALSO RELIED ON THE JUD GMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME- TAX (EXEMPTION) VS. GURU NANAK VIDYA BHANDAR TRUST (2005) 272 ITR 3 79 (DEL). 8. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDE RS OF LOWER AUTHORITIES AND COULD NOT CONTROVERT TO THE FACTS S UBMITTED BY THE LD. AR OF THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORD AND JUDICIAL PRONOUNCEMENTS REFERRED THER ETO. THE ONLY ISSUE TO BE EXAMINED IS WHETHER THE ASSESSING OFFIC ER WAS JUSTIFIED IN REJECTING THE APPLICATION OF THE ASSESSEE IN FORM N O.10 FOR AVAILING OF THE BENEFIT OF ACCUMULATION OF RS.8,21,58,996/- AS SPECIFIED UNDER SECTION 11(2) OF THE ACT FOR ASST. YEAR 2008-09. BE FORE GOING FURTHER LET US GO THROUGH THE RELEVANT PROVISIONS OF SECTIO N 11(2) OF THE ACT - 11. [(2) [WHERE [EIGHTY-FIVE] PER CENT OF THE INCOM E 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 R ELIGIOUS PURPOSES IN INDIA DURING THE PREVIOUS YEAR BUT IS ACCUMULATED OR SET APART, EITH ER 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 SPECIFIES, BY NOTICE IN WRITING GIVEN TO THE 42 [ASSESSING] OFFICER IN THE PRESCRIBED 43 MANNER 44 , THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMUL ATED OR ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 8 SET APART AND THE PERIOD FOR WHICH THE INCOME IS TO BE ACCUMULATED OR SET APART, WHICH SHALL IN NO CASE EXCEED TEN YEARS; [( B ) THE MONEY SO ACCUMULATED 46 OR SET APART IS INVESTED OR DEPOSITED IN THE FORMS OR MODES SPECIFIED IN SUB-SECTION (5)]:] [ PROVIDED THAT IN COMPUTING THE PERIOD OF TEN YEARS REFERRED TO IN CLAUSE ( A ), THE PERIOD DURING WHICH THE INCOME COULD NOT BE APPLIED FOR TH E PURPOSE FOR WHICH IT IS SO ACCUMULATED OR SET APART, DUE TO AN ORDER OR INJUNC TION OF ANY COURT, SHALL BE EXCLUDED:] [ PROVIDED FURTHER THAT IN RESPECT OF ANY INCOME ACCUMULATED OR SET A PART ON OR AFTER THE 1ST DAY OF APRIL, 2001, THE PROVISIONS OF THIS SUB- SECTION SHALL HAVE EFFECT AS IF FOR THE WORDS TEN YEARS AT BOTH THE PLACES WHERE THEY OCC UR, THE WORDS FIVE YEARS HAD BEEN SUBSTITUTED.] [ EXPLANATION. ANY AMOUNT CREDITED OR PAID, OUT OF INCOME REFERRED TO IN CLAUSE ( A ) OR CLAUSE ( B ) OF SUB-SECTION (1), READ WITH THE EXPLANATION TO THAT SUB-SECTION, WHICH IS NOT APPLIED, BUT IS ACCUMULATED OR SET APART, TO ANY TR UST OR INSTITUTION REGISTERED UNDER SECTION 12AA OR TO ANY FUND OR INSTITUTION OR TRUST OR ANY UNIV ERSITY OR OTHER EDUCATIONAL INSTITUTION OR ANY HOSPITAL OR OTHER MEDICAL INSTIT UTION REFERRED TO IN SUB-CLAUSE ( IV ) OR SUB- CLAUSE ( V ) OR SUB-CLAUSE ( VI ) OR SUB-CLAUSE ( VIA ) OF CLAUSE ( 23C ) OF SECTION 10 , SHALL NOT BE TREATED AS APPLICATION OF INCOME FOR CHARITABLE OR RELIGIOUS PURPOSES, EITHER DURING THE PERIOD OF ACCUMULATION OR THEREAFTER.] FROM ABOVE WE CAN SEE THAT SECTION 11(2)(A) OF THE ACT SAYS THAT THE ASSESSEE HAS TO GIVE A NOTICE IN WRITING I.E. IN FO RM NO.10 SPECIFYING THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMUL ATED AND THE PERIOD FOR WHICH INCOME IS TO BE ACCUMULATED WHICH SHOULD NOT EXCEED 5 YEARS RELEVANT TO ASST. YEAR 2008-09 AND S HOULD BE SUBMITTED BEFORE THE EXPIRY OF TIME ALLOWED UNDER S ECTION 139(1) OF THE ACT READ WITH RULE 12(2) OF THE IT RULES, 1962. SECTION 11(2)(A) ONLY REFERS TO THE PURPOSE FOR WHICH ACCUMULATION IS TO BE DONE AND IT DOES NOT SPEAK OF THE WORD SPECIFIC PURPOSE. T HE ASSESSING OFFICER APART FROM RAISING OBJECTIONS ON THE MENTIO NING OF THE PURPOSE OF ACCUMULATION, HAS NOT RAISED ANY OBJECTION TO TH E CONDITIONS REQUIRED TO BE FULFILLED BY THE ASSESSEE IN RESPECT OF THE PROVISIONS OF SECTION 11(2)(A). THE ONLY POINT OF THE DISCUSSION REMAINS IS WHETHER ANY SPECIFIC PURPOSE FOR EXAMPLE CONSTRUCTION OF A HOSPITAL, SCHOOL ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 9 BUILDING ETC. IS NECESSARY TO BE MENTIONED IN FORM NO.10 OR MENTIONING OF THE PURPOSE FOR WHICH THE TRUST/CHARI TABLE ORGANIZATION HAS BEEN ESTABLISHED IS FOR A SUFFICIENT PURPOSE FO R ITS ACCUMULATION. SECTION 11 OF THE ACT DEALS WITH INCOME FROM PROPER TY HELD FOR CHARITABLE OR RELIGIOUS PURPOSE AND MENTIONS FORMS OF TRUST/CHARIABLE ORGANIZATION/INSTITUTION WHICH ARE BEING COVERED UN DER THIS SECTION DEPENDING ON THEIR OBJECTS WHICH VARY FROM CASE TO CASE BUT FOR ALL GOOD PURPOSES THEY ARE FULFILLING THE REQUIREMENTS EMBEDDED IN THE PROVISIONS OF SECTION 11. 10. IN THE CASE OF ASSESSEE I.E. GUJARAT STATE CHIE F MINISTER RELIEF FUND WHICH IS STATE GOVERNMENT CONTROLLED FUND HAVI NG THE CHIEF MINISTER OF GUJARAT AS ITS CHAIRMAN AND MEMBERS OF THE FUND INCLUDES REVENUE MINISTER, PRINCIPAL SECRETARY OF THE STATE AND SECRETARY, DEPARTMENT OF REVENUE OF STATE OF GUJARAT AND ITS M AIN PURPOSE IS ELEVATION BY GRANT OF MONEY OR OTHERWISE OF DISTRES S CAUSED BY PARTIAL OR COMPLETE FAILURE OF RAINS AND ITS CONSEQUENT EFF ECT IN THE SHAPE OF PARTIAL OR TOTAL FAILURE OF CROPS OR BY ANY OTHER C ALAMITY IN THE STATE OF GUJARAT. FURTHER AS PER THE RULES OF GUJARAT CHIEF MINISTER RELIEF FUND MONEYS AND OTHER ASSETS AVAILABLE FROM FUND SHALL B E SPENT IN ONE OR MORE OF FOLLOWING WAYS - (I) IN SUPPLEMENTING THE RATIONED FOODGRAINS TO PER SONS EARNING WAGES ON RELIEF WORKS. (II) IN PROVIDING COMFORTS WHETHER OF ADDITIONAL F OOD OR CLOTHING OR MEDICAL NEEDS FOR THE AGED OR THE INFIR M, FOR PATIENTS IN HOSPITALS AND THE LIKE. ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 10 (III) IN PROVIDING FOR THE MAINTENANCE OF ORPHANS O R INMATES IN WORKHOUSES SITUATED IN THE AREA AFFECTED BY THE DIS TRESS. (IV) IN RELIEVING WOMEN, CHILDREN AND OTHER PERSONS IN DISTRESSED CIRCUMSTANCES WHO ARE NOT USED TO OUTDOO R WORK. (V) IN HELPING RESETTLEMENT OF IMPOVERISHED AGRICUL TURISTS, MALDHARIS (CATTLE BREEDERS) AND OTHERS WHO HAVE LOS T THEIR WHOLE OR SUBSTANTIAL PORTION OF THEIR MEANS OF LIKE LIHOOD DUE TO THE CALAMITY OR DISTRESS. (VI) IN RELIEVING DISTRESS, DUE TO SHORTAGE OF FODD ER, BY FREE OR SUBSIDIZED SALE OF GRASS OR CONCENTRATES TO INSTITU TIONS AND INDIVIDUALS. (VII) IN PROVIDING FOR ANY OBJECT WHICH THE COMMITT EE MAY CONSIDER FIT FOR RELIEVING THE DISTRESS OF HUMAN BE INGS OR CATTLE IN ANY AREA OF GUJARAT STATE. 11. FURTHER IN THE PAST GUJARAT CHIEF MINISTER RELI EF FUND HAVE BEEN USED TO HELP THE POOR AND DISTRESSED IN THE CA SE OF UTTARAKHAND TRAGEDY, BIHAR FLOODS, EARTH QUAKE IN GUJARAT, EART H QUAKE IN LATUR, DEATH OF SOLDERS ON J & K FRONT IN PEACETIME, VICTI MS OF COMMUNAL FLARE UPS. 12. LOOKING TO THE OBJECTS OF THE FUNDS AS WELL AS THE PAST HISTORY OF THE INCIDENTS WHERE THE CHIEF MINISTER RELIEF FUND ACCUMULATED HAVE BEEN UTILIZED, NONE OF THE OBJECTS WERE CERTAIN TO HAPPEN IN A YEAR AND THE POSSIBILITY OF HAPPENING OF THE CALAMITY/IN CIDENTS IS ROUND THE CLOCK. IN OTHER WORDS THE INCIDENTS MAY HAPPEN IN A YEAR OR MORE IS NOT UNDER THE CONTROL OF THE TRUST. FOR THIS VERY R EASON THE ASSESSEE HAS SET APART/ACCUMULATED THE FUNDS FOR THE OBJECTS OF THE TRUST AND NOTHING SPECIFIC POSSIBLE HAPPENING COULD HAVE BEEN WRITTEN IN THE ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 11 APPLICATION. CERTAINLY THE SECTION 11(2)(A) HAS A C HECK FOR THE UTILIZATION OF SUCH FUND BY WAY OF RESTRICTING THE PERIOD FOR WHICH THE FUND CAN BE ACCUMULATED WHICH IS FOR 5 YEARS RELEVA NT TO ASST. YEAR 2008-09 AND THE ASSESSING OFFICER HAS POWER WITHIN THE PROVISIONS OF THE ACT TO CHECK THAT WHETHER THE FUNDS ACCUMULATED OR SET APART IS PROPERLY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND IS UTILIZED WITHIN THE SPECIFIC TIME LIMIT MENTIONED IN THE PROVISIONS OF THE ACT AND IN CASE HE FINDS NOTHING CONTRARY OR OTHERWISE TO IT T HEN HE CAN TAKE THE NECESSARY COURSE OF ACTION. 13. IN THE CASE OF THE ASSESSEE THE ASSESSING OFFIC ER HAS NOWHERE EXAMINED THE UTILIZATION OF FUNDS OF PREVIOUS YEARS AS TO WHETHER THE SEPARATE RECORDS WERE KEPT FOR EACH YEAR OF ACCUMUL ATION AND WHETHER THE FUND HAS BEEN UTILIZED FOR THE PURPOSE OF THE TRUST WITHIN THE TIME LIMIT MENTIONED IN THE PROVISIONS OF THE A CT RELEVANT TO THE ASSESSMENT YEAR IN WHICH IT HAS BEEN ACCUMULATED. R ATHER THE ASSESSING OFFICER HAS ONLY DEALT WITH THE ISSUE, OF WHETHER THE ACCUMULATION OF FUND IS FOR A SPECIFIC PURPOSE OR N OT, WHICH IN THE CASE OF ASSESSEE WAS PROPERLY DONE AS THEY HAVE MEN TIONED THAT THEY ARE ACCUMULATING/SETTING APART FUNDS FOR THE P URPOSE OF THE TRUST. 14. THE CLAIM OF THE ASSESSEE FURTHER GETS STRENGTH ENED LOOKING TO THE HISTORY OF THE ASSESSEES ASSESSMENT PROCEEDING S WHEREIN ITS SETTING APART/ACCUMULATION OF FUNDS IN FORM NO.10 F OR THE PURPOSE OF THE TRUST HAS DULY BEEN ACCEPTED BY THE ASSESSING A UTHORITIES AND THE SAME IS BEING CONTINUED IN THE YEARS AFTER THE YEAR UNDER APPEAL BEFORE US. ALSO IN THE CASE OF DIT (EXEMPTION) VS. GURU NANAK VIDYA ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 12 BHANDAR TRUST (SUPRA), HONBLE DELHI HIGH COURT HAS DEALT WITH THE ISSUE WHEREIN ASSESSEES CLAIM FOR ACCUMULATION SET OUT IN FORM NO.10 WERE ACCEPTED IN THE PRECEDING AND SUBSEQUENT YEARS BUT NOT FOR THE YEAR UNDER APPEAL, AND HELD AS UNDER :- HELD DISMISSING THE APPEAL, THAT THE TRIBUNAL HAD ALLOWED THE ASSESSEE TRUST TO ACCUMULATE ITS INCOME BECAUSE ITS REQUEST FOR ACCUMULATION HAD BEEN ACCEPTED IN THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS AND THIS WAS THE SOLITARY YEAR IN WHICH THE CLAIMS CAME TO BE REJECTED. FURTHER, THE OBJECTS FOR ACCUM ULATION SET OUT IN FORM NO.10 IN THE PRECEDING ASSESSMENT YEARS AND IN THE SUCCEEDING ASSESSMENT YEARS AND IN THE YEAR UNDER APPEAL WERE ABSOLUTELY IDENTICAL. THE TRIBUNAL WAS JUSTIFIED IN ITS ORDER IN ORDER TO MAINTAIN CONSISTENCY. NO SUBSTANTIAL QUESTION OF LAW AROSE F ROM ITS ORDER. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF H ONBLE DELHI HIGH COURT IN THE CASE OF DIT (EXEMPTION) VS. GURU NANAK VIDYA BHANDAR TRUST (SUPRA), CONSISTENTLY ALLOWING THE CLAIM OF A SSESSEE IN THE PREVIOUS AND SUBSEQUENT YEARS AND THE OBJECTS FOR W HICH THE TRUST FUND IS WORKING AND THE DISCUSSIONS MADE ABOVE, WE ARE OF THE VIEW THAT THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTION OF ASSESSING OFFICER IN REJECTING THE APPLICATION IN FORM NO.10 FOR ACCUMULATION OF FUNDS U/S 11(2) OF THE ACT AND ACCORDINGLY ADDING R S.8,21,58,996/- TO THE INCOME OF THE ASSESSEE. THE ORDER OF CIT(A) IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 15. GROUND NO.5 LEVY OF INTEREST U/S 234A & 234B O F THE ACT IS CONSEQUENTIAL. ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 13 16. GROUND NO.6 WITHDRAWAL OF INTEREST U/S 244A O F THE ACT IS CONSEQUENTIAL. 17. GROUND NO.7 INITIATION OF PENALTY U/S 271(1)(C ) OF THE ACT IS PREMATURE HENCE NOT ADJUDICATED. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4/11/2015 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 4/11/2015 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITA NO. 3105/AHD/2011 ASST. YEAR2008-09 14 1. DATE OF DICTATION: 3/11/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 4/11/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 4/11/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: