DIRECTOR OF INCOME TAX Vs. MAMTA HEALTH INSTITUTE
HIGH COURT OF DELHI
DIRECTOR OF INCOME TAX (EXEPMTION) MAYUR BHAWAN, NEW DELHI
MAMTA HEALTH INSTITUTE FOR MOTHER AND CHILDREN 13-A, SAIDULAJAIB, OPP.D-BLOCK, SAKET, NEW DELHI
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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 a perusal of the objects of the Society, we find that these include
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
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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
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
(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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