TATTWAJNANA VIDYAPEETH ,MUMBAI V. DCIT (EXEMPTION) CIRCLE -2, MUMBAI

ITA 6867/MUM/2025

AI Insights

The case involves Tattwajnana Vidyapeeth, a public charitable trust, appealing against the disallowance of Rs. 4,77,00,000 under section 11(2) of the Income Tax Act, 1961, for the assessment year 2016-17. The disallowance was initially made by the Assessing Officer and upheld by the Commissioner of Income Tax (Appeals), primarily on the grounds that the trust did not specify the purposes for which the funds were accumulated in Form No. 10. The Tribunal found that while the trust broadly mentioned the purposes in a resolution, it failed to provide specific details required under the law. The Tribunal decided to give the trust another opportunity to specify the purposes, thus setting aside the CIT(A)'s order and allowing the appeal for statistical purposes.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848113 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2016-2017
• Appeal Filed On: 29-10-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RITESH MISRA
• Assessee Lawyers: VISHAL SHAH
• Keywords: Set aside; Charitable institution
• Section: 143(3); 263; 12A; 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No. 6867/Mum./2025 (Assessment Year : 2016-17) Tattwajnana Vidyapeeth, 2, Nirmal Niketan, Dr. Bhajekar Street, Prathna Samaj, Mumbai - 400004 PAN : AAATT0261E ……………. Appellant v/s Deputy Commissioner of Income Tax (Exemptions)-2(1), 6th Floor, MTNL, Tel. Ex. Building Cumballa Hills, Peddar Road, Mumbai - 400026 ……………. Respondent Assessee by : Shri Vishal Shah Ms. Bijal Khara Revenue by : Shri Ritesh Misra, CIT (DR) Date of Hearing – 12/03/2026 Date of Order – 24/03/2026 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 30.08.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2016-17. 2. In this appeal, the assessee has raised the following grounds: - Printed from counselvise.com ITA No.6867/Mum/2025 (A.Y. 2016-17) 2 1. On the basis of facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming addition made u/s 143(3) r.w.s 263 of Rs. 4,77,00,000 again while passing the order u/s 250 which is bad in law. 2. a) On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the disallowance of Rs. 4,77,00,000 u/s 11(2) merely on ground that purpose of accumulation in Form 10 or in resolution is not specific, lucid, exact or detailed without appreciating the fact that the resolution provides pointwise purposes where the trust desires the accumulation to be spent. b) On the facts and circumstances of the case and in law the Ld. CIT (A) has erred in not appreciating 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 and the fact 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. The Ld. CIT(A) failed to look at the substance over the form which is one of the principal doctrines in taxation. c) On the facts and circumstances of the case and in law the Ld. CIT (A) 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, and hence denial of accumulation u/s 11(2) is bad in law and on fact both. 3. On the facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming interest levied u/s 234B and 234D.” 3. The solitary grievance of the assessee is against the disallowance made under section 11(2) of the Act. 4. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is a public charitable trust registered with the Commissioner of Income Tax (Exemptions), Mumbai, under section 12A of the Act. For the year under consideration, the assessee filed its return of income on 06.10.2016, declaring a total income of Rs. 1,60,130/-. Along with the return of income, the assessee filed an audit report in Form 10B, income and expenditure account, and balance sheet. The return of income of the assessee was selected for Printed from counselvise.com ITA No.6867/Mum/2025 (A.Y. 2016-17) 3 scrutiny, and an order under section 143(3) was passed on 06.12.2018, whereby accumulation of Rs. 4,77,00,000/- was disallowed under section 11(2) of the Act. Subsequently, the learned CIT(E) initiated revisionary proceedings under section 263 of the Act, and an order dated 22.03.2025 was passed by the learned CIT(E) setting aside the original assessment proceedings under section 143(3) of the Act. Pursuant to the directions by the learned CIT(E), the Assessing Officer (“AO”) did not make any addition in respect of the issue on which proceedings under section 263 of the Act were initiated. However, the AO, vide its order dated 10.03.2022 passed under section 143(3) read with section 263 read with section 144B of the Act, again made the disallowance of the accumulation of Rs. 4,77,00,000/- under section 11(2) of the Act on the basis that the assessee has not specified the purpose for which the amount was accumulated or set apart in Form No. 10. 5. During the hearing, the learned Authorised Representative (“learned AR”) submitted that the principal object of the assessee trust is to run schools, i.e., education activities, and in this regard, the assessee passed a detailed resolution on 30.03.2016 in respect of the purpose for which accumulation was made. The learned AR submitted that, instead of specifying each and every purpose in Form No. 10, the assessee merely referred to its resolution dated 30.03.2016 in the column pertaining to the purpose for which the amount is accumulated in Form No. 10. 6. We find that the learned CIT(A), after taking into consideration each and every clause of the resolution dated 30.03.2016, held that the assessee has not revealed the purpose and none of the purposes is specific, lucid, exact, or Printed from counselvise.com ITA No.6867/Mum/2025 (A.Y. 2016-17) 4 detailed. The relevant findings of the learned CIT(A) in this regard are reproduced as follows: - Sr. No. RESOLUTION CLAUSE FINDINGS/REMARKS 1. To purchase land, construct /renovate/expansion of educational centers providing cultural education streams providing non-formal, non- commercial education. Name, much less any other detail, of even one educational centre to be constructed/renovated/expanded has not been specified. 2. To establish educational and vocational centers in various parts of the country to enable the local youth to be economically stable and independent. Elementary training on various vocations like carpentry, welding, auto repair, tailoring etc. to be provided and to help them in acquiring the apparatus, equipment needed for such skill Name, much less any other detail, of even one vocational centre/part of the country has not been specified. No detail whatsoever of apparatus/equipment proposed to be acquired. 3. To construct and establish centers various parts of the country wherein children, youth and senior can meet regularly, create harmony among themselves and discuss about valued based learning and way of life Name, much less any other detail, of even one such centre/part of the country has not been specified. 4. To create, maintain, upkeep Socio- economic centers in villages, towns and other places. The people will offer their service selflessly in those centers creating harmony within human being irrespective of religion, Caste, creed, community Name, much less any other detail, of even one such centre/village/town/other place, has not been specified. 5. To undertake such projects of well recharging, rain water harvesting, conserving water. To identify such areas and undertake projects of construction of bore wells, recharging of bore wells, rain water harvesting, conservation water by applying the different techniques, innovations of diverting the rain water into open wells, bore wells, store places. No details whatsoever mentioned in respect of any such project or area that may have been identified on or before setting apart/accumulating funds u/s 11(2). 6. To identify such projects which are environmental friendly, creating awareness about environmental friendly apparatus, equipments, utility items. To undertake projects of educating the people about such environmental friendly techniques, methodology, equipment and related available gadgets. Here, it is clear that any such project has not been identified as on the date of having decided to set part/accumulate the funds u/s 11(2). 7. To undertake above projects independently and / or to associate, participate with other institutions having such projects. The narration is repetitive and vague without any specification. No particulars mentioned. Printed from counselvise.com ITA No.6867/Mum/2025 (A.Y. 2016-17) 5 7. Accordingly, the learned CIT(A) held that the purpose of accumulation has not been specified by the assessee either in Form No. 10 or in any resolution in terms of the provisions of section 11(2) of the Act. Accordingly, the learned CIT(A) affirmed the findings of the AO of disallowing the accumulation of Rs. 4,77,00,000/- under section 11(2) of the Act. During the hearing, the learned AR submitted that the assessee, in line with its resolution passed on 30.03.2016, has already incurred the expenditure in respect of the purpose for which the accumulation was made. 8. On the other hand, the learned Departmental Representative (“learned DR”), by vehemently relying upon the orders passed by the lower authorities, submitted that the purpose declared by the assessee in Form No. 10 for accumulation has not been specifically mentioned by the assessee and mere reference to the resolution dated 30.03.2016 is not sufficient, as each and every clause of the resolution does not lucidly provide the details for which accumulation was made, and the assessee should have provided specific details. 9. Having considered the submissions of both sides and perused the material available on record, we agree with the findings of the lower authorities that the assessee was required to specifically mention the purpose for which the accumulation of Rs. 4,77,00,000/- was made by the assessee for the year under consideration. From the perusal of the resolution dated 30.03.2016, forming part of the paper book from pages 7–9, we find that the assessee has broadly mentioned the purpose for which the accumulated Printed from counselvise.com ITA No.6867/Mum/2025 (A.Y. 2016-17) 6 amount shall be utilised, without providing the specific details. Since, as per the assessee’s own submission, the amount has now already been utilised, in the interest of justice and fair play, we deem it appropriate to give one more opportunity to the assessee to show the specific purpose for which the accumulation of Rs. 4,77,00,000/- was made by the assessee during the year under consideration. Accordingly, we restore the matter to the file of the learned CIT(A) for de novo adjudication, granting one more opportunity to the assessee to furnish the aforesaid specific details. Needless to mention, no order shall be passed without affording reasonable and adequate opportunity to both parties. Further, the assessee is directed to attend the hearings before the learned CIT(A) without any default. With the above directions, the impugned order is set aside and the grounds raised by the assessee are allowed for statistical purposes. 10. In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 24/03/2026 S Sd/- OM PRAKASH KANT ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 24/03/2026 Prabhat Printed from counselvise.com ITA No.6867/Mum/2025 (A.Y. 2016-17) 7 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "