- (1.) This appeal pertains to assessment year 1970-71. The following question was referred to the High Court of Judicature at Madras by the Income-tax Appellate Tribunal under Section 256(1) of the Income-tax Act, 1961: "Whether, on the facts and in the circumstances of the case, the income of the assessee is exempt from tax under Section 11 of the Income-tax Act for the assessment year 1970-71 -
(2.) The assessee is a Charitable Trust for carrying out Thiruppani or repairs to old Hindu temples, building new ones, giving aid to or establishing hostels, educational and industrial institutions etc. It is not in dispute that the objects of the Trust are charitable. On March 1, 1963, the trustee resolved that the income of the Trust should be accumulated for a period of ten years commencing from April 13, 1961 for the various charitable purposes which are set out in the Resolution. The assessee accordingly filed Form 10 with the Income-tax Officer as required under Section 11(2) of the Income-tax Act, 1961. The income was accordingly being accumulated every year and invested in Government securities.
(3.) For the year ending April 12, 1970 which is the accounting year relevant to assessment year 1970-71, the amount of Rs. 7,82,792.44 which was shown in the earlier balance sheet (as on 1-4-1969) as advance to S. RM. M. CT. M. Firm, Rangoon on the "Assets" side was substituted by "Building for Rs. 8 lakhs" on the Assets side. It was the case of the assessee that during the assessment year 1970-71, the advance to the said firm at Rangoon was in effect realised and invested in a building for the purpose of starting a hospital. The Trust had also earned during that assessment year other income amounting to Rs. 1,64,210.03.;