DIRECTOR OF INCOME TAX Vs. MAMTA HEALTH INSTITUTE
LAWS(DLH)-2007-5-116
HIGH COURT OF DELHI
Decided on May 03,2007

DIRECTOR OF INCOME TAX (EXEPMTION) MAYUR BHAWAN, NEW DELHI Appellant
VERSUS
MAMTA HEALTH INSTITUTE FOR MOTHER AND CHILDREN 13-A, SAIDULAJAIB, OPP.D-BLOCK, SAKET, NEW DELHI Respondents

JUDGEMENT

MADAN B. LOKUR, J - (1.) The Revenue is aggrieved by an order dated 22nd December, 2004 passed by the Income Tax Appellate Tribunal, Delhi Bench 'B' in ITA No.566/Del/2002 relevant for the assessment year 1997-98. The question which arose for consideration before the statutory authorities was whether the Assessee was entitled to the benefit of accumulation under Section 11(2) of the Income Tax Act, 1961.
(2.) The Assessee is a Society registered under Section 12-A of the Act. " Learned counsel for the Assessee has placed before us the objects of the Society which he says were before the Assessing Officer. The objects are taken on record. On a perusal of the objects of the Society, we find that these include following:- i)To develop health resources particularly in respect of children belonging to the vulnerable segments of the population; ii)To educate the people especially the mothers regarding maintenance and improvement of health and nutrition of ITA 503/2005 Page 2 of 7 Children; iii) To conduct classes and schools for training in matters of health nutrition and all other allied subjects pertaining to medicine and community development; iv) To establish and maintain demonstration centres in Delhi for desseminating knowledge on nutrition and health; v) To help individuals and associations in the preparation of projects on nutrition and health with special emphasis on the educational aspects of both, to evaluate these projects to recommend, co-ordinate and when required and possible, sponsor these projects without infringing on the autonomy of the applicant; vi) To conduct educational programme for general education of the rural women, as well as other educational programmes for all age groups through schools, college and other educational institution;" Since the Assessee could not utilise its entire income towards charitable purposes, it claimed accumulation of set-apart income and submitted its option in Form-10. The Assessee mentioned the purpose of accumulation as follows:- "As per resolution" In the resolution it was mentioned as under:- "A sum of Rs.7,00,000/-(Seven Lakhs only) out of the income of organisation for the period ended 31st March, 97 be set apart and accumulated for the specified purpose of financing on going programmes and development of the organisation and furtherance of objects of the society." The Assessing Officer as well as the Commissioner of Income Tax (Appeals) did not accept the contention of the Assessee and denied the benefit of accumulation. However, the Tribunal accepted the contention of the Assessee and gave it the benefit of accumulation in view of the judgment of this Court in Commissioner of Income Tax vs. Hotel and Restaurant Association (2003) 261 ITR 190.
(3.) In that decision, the contention of learned counsel for the Revenue was to the effect that the appellate authorities under the Act had failed to appreciate that in the prescribed form, the Assessee did not indicate the specific purpose for which the income was sought to be accumulated and, therefore, the statutory requirement had not been strictly complied with disentitling the Assessee from relief under Section 11(2) of the Act. This Court rejected the contention and held as follows:- "It is true that specification of certain purpose or purposes is needed for accumulations 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 for accumulation is not precluded but it depends on the precise purpose for which the accumulation is intended. In the present case, both the appellate authorities below have recorded a concurrent finding that the income was sought to be accumulated by the assessee to achieve the object for which the assessee was incorporated. It is not the case of the Revenue that any of the objects of the assessee-company were not for charitable purpose. The aforenoted finding by the Tribunal is essentially a finding of fact giving rise to no question of law.";


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