DIRECTOR OF INCOME TAX Vs. MITSUI & CO. ENVIRONMENTAL TRUST
LAWS(DLH)-2007-2-206
HIGH COURT OF DELHI
Decided on February 27,2007

DIRECTOR OF INCOME TAX Appellant
VERSUS
Mitsui And Co. Environmental Trust Respondents

JUDGEMENT

- (1.) 945/Del/2002 relevant for the asst. yrs. 1997 -98 and 1998 -99. 2. The assessee is registered with the Revenue under s. 12A of the IT Act, 1961 as a charitable organisation. The objects of the assessee have been reproduced in the order of the CIT(A) and they are as follows : "(i) Development and improvement of environmental preservation technology. (ii) Exchange of technical communication and information between the Japanese institutions engaged in the similar works and the Indian institutions. (iii) To undertake joint study, research and development of various measures relating to environmental protection with Japanese institutions and for that purpose to institute exchange programme. (iv) To gather information from various fields with a view to possible harmonization throughout the community of measure of protection of environment. (v) To undertake the implementation of the activities, systems and programmes for the implementation of environmental protection, and (vi) To carry out such objects and activities that are incidental or ancillary to the main objects."
(2.) THE assessee filed an application in Form No. 10 in terms of r. 17 of the IT Rules for permission to accumulate Rs. 14,88,047 and Rs. 16,43,650 in the two assessment years that we are concerned with. The application was made with reference to s. 11(2) of the Act.
(3.) IN the application, the assessee stated that the amount would be utilised for the objects of the trust. The AO was of the view that the purpose of accumulation had not been specified, but only mentioned in a general manner and, therefore, the primary condition of s. 11(2) of the Act was not fulfilled. It was also held by the AO that the amount so accumulated or set apart was not invested by the assessee as provided under s. 11(5) of the Act. The view taken by the AO was accepted by the CIT(A) but the Tribunal reversed this view and that is how the Revenue is before us under s. 260A of the Act. 4. That the trust is a charitable trust is not in dispute because the AO has recorded that he had considered the activities of the trust as charitable activities covered by s. 2(15) of the Act. 5. As regards the first issue considered by the AO, namely, that the assessee had not specified in Form No. 10 the purpose for which the accumulation was sought to be made, our attention has been drawn to a decision of this Court in CIT vs. Hotel & Restaurant Association (2003) 182 CTR (Del) 374 : (2003) 261 ITR 190 (Del). In that case, a similar argument was raised by the learned senior standing counsel for the Revenue to the effect that the assessee had failed to indicate in the prescribed form 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 s. 11(2) of the Act. This Court rejected the contention and held that the purpose or purposes to be specified cannot be beyond the objects of the trust. Plurality of purposes for accumulation is not precluded. In other words, it need not necessarily be specifically stated for which purpose the accumulation is sought.;


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