Estate Of Kadapakkam Charities v. The Asst.commissioner Of Income-Tax (Exemptions)-Ii Chennai-600 034

In the High Court of Judicature at Madras Dated : 14.12.2009 Coram :- The Honourable Mr.Justice K.RAVIRAJA PANDIANandThe Honourable Mr.Justice M.M.SUNDRESH Tax Case (Appeal ) No.965 of 2008 Estate of Kadapakkam CharitiesC/o.The Official Trustee of Tamil NaduHigh Court CampusChennai-600 034. ... Appellant Vs.The Asst.Commissioner of Income-tax(Exemptions)-IIChennai-600 034. ... Respondent Appeal filed under Section 260-A of the Income Tax Act against the order of the Income TaxAppellate Tribunal, Madras 'A' Bench, dated 7.6.2005 passed in I.T.A.No.1525/Mds/2004. For Appellant : Mr.R.Venkata Narayanan forMr.Subbaraya AiyarFor Respondent : Mr.Patty B.Jegannathan JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J.) The revenue has come up on appeal against the order of the Income Tax Appellate Tribunal, Madras'A' Bench, dated 7.6.2005 passed in I.T.A.No.1525/Mds/2004 in respect of the assessment year1999-2000 by formulating the following substantial questions of law:"(i). Whether the Tribunal was right in law in holding that the conditions stipulated for availing thebenefit of accumulation of income under Section 11(2) are not satisfied?(ii). Whether the Tribunal is justified in law in holding that for the purpose of accumulation of theincome as provided under Section 11(2) of the Income Tax Act, it requires specification of thepurposes?" 2. The facts of the case are as follows: The appellant trust filed its return of income declaring "Nil" income after claiming exemption underSection 11 of the Income-tax Act. The appellant claimed accumulation of the income under Section11(2) of the Income Tax Act. The appellant filed Form 10 giving reasons for accumulating the incomestating that the accumulation was sought for the purposes of renovation and repairs of old building,contribution to poor feeding and desandri feeding expenses. The assessing officer while deciding theapplication of income in Form No.10 found that the purpose of accumulation mentioned therein arevague and not specific and hence declined the benefit of accumulation under Section 11(2) of the Actby following the decision of the Calcutta High Court in the case of DIT(E) Vs Trustees of SinghaniaCharitable Trust (1999 ITR 819) charitable in nature. Further the trust is under the control ofOfficial Trustee of Tamil Nadu and it has to get the permission from the High Court for spending the amount. The Commissioner of Income-tax (Appeals) rejected the arguments and confirmed the orderof the Assessing Officer. Aggrieved by the said order, the appellant filed appeal to the Income-taxAppellate Tribunal and the Tribunal relying on its order in the case of Estate of Maligai Merchant inI.T.A.No.1524/04 dated 7.6.2005 dismissed the appeal. Aggrieved by the same, the present appeal isfiled. 3. The learned counsel appearing for the appellant as well as the counsel for the respondent submitsthat the issue involved in this appeal is covered by the decision of this Court in the case of Estate ofKadapakam Charities Vs. The Asst.Director of Income Tax (Exemptions) II, Chennai � 34 (T.C.(A)No.281 of 2004) dated 15.12.2008,wherein it was observed as follows: amount. The Commissioner of Income-tax (Appeals) rejected the arguments and confirmed the orderof the Assessing Officer. Aggrieved by the said order, the appellant filed appeal to the Income-taxAppellate Tribunal and the Tribunal relying on its order in the case of Estate of Maligai Merchant inI.T.A.No.1524/04 dated 7.6.2005 dismissed the appeal. Aggrieved by the same, the present appeal isfiled. 3. The learned counsel appearing for the appellant as well as the counsel for the respondent submitsthat the issue involved in this appeal is covered by the decision of this Court in the case of Estate ofKadapakam Charities Vs. The Asst.Director of Income Tax (Exemptions) II, Chennai � 34 (T.C.(A)No.281 of 2004) dated 15.12.2008,wherein it was observed as follows: ".... 8.The decision of the Calcutta High Court will not strictly apply to this case, since in that case inForm 10, all the objects of the trust had been enumerated and therefore, rejection of Form 10 wasnot justified. In this case, the purpose has been specified viz., repair and renovation of the building,and the difficulties in immediately starting the renovation have also been brought to the notice ofthe authorities. But at the same time, we also see that Form 10 has not been duly filled up. Even inthe matter decided by the Calcutta High Court, the assessee was allowed to adduce fresh evidenceto show the specific purpose for which the trust requires accumulation of the income. In this casetoo, especially in view of the fact that it is AG & OT who is administering the trust, we feel that thesame indulgence could be shown. We are not answering the questions of law raised, however, weremand the matter to the Assessing Officer and the assessee shall specify the purpose in addition torenovation and repair of the building and also the amount and the period for which accumulation isrequired, and the Assessing Officer shall consider the same in accordance with law...." 4. Having regard to the submission made by the counsel on either side, the order of the Tribunal ishereby set aside and the matter is remitted back to the assessing officer in terms of the directiongiven in the order dated 15.12.2008 made in T.C.(A) No.281 of 2004 and the tax case is disposed ofaccordingly. usk Copy to: 1.The Income-tax Appellate Tribunal,Madras A Bench, Chennai2. The Commissioner of Income Tax (Appeals)-XIChennai3.The Asst.Director of Income-tax (Exemptions)-IIChennai