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

In the High Court of Judicature at Madras The Honourable Mr.Justice K.RAVIRAJA PANDIANandThe Honourable Mr.Justice M.M.SUNDRESH 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 againstthe order of the Income Tax Appellate Tribunal, Madras 'A' Bench,dated 15.9.2006 passed in I.T.A.No.1525/Mds/2004 against the orderof the Commissioner of Income Tax Appeals-XI, Chennai 34 inITA.No.63/2002-03 dated 4.3.2004 and against the order of theAssistant Director of Income Tax, (Exemption II) Chennai dated21.2.2002 in PAN/GIR.No.47-067-AY-01242608-K. For Appellant : Mr.R.Venkata Narayanan for Mr.Subbaraya Aiyar PadmanabhanFor 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 theIncome Tax Appellate Tribunal, Madras 'A' Bench, dated 7.6.2005passed 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 inholding that the conditions stipulated for availing thebenefit of accumulation of income under Section 11(2) arenot satisfied? https://hcservices.ecourts.gov.in/hcservices/ (ii). Whether the Tribunal is justified in law inholding that for the purpose of accumulation of the incomeas provided under Section 11(2) of the Income Tax Act, itrequires specification of the purposes?" 2. The facts of the case are as follows:The appellant trust filed its return of income declaring "Nil"income after claiming exemption under Section 11 of the Income-taxAct. The appellant claimed accumulation of the income under Section11(2) of the Income Tax Act. The appellant filed Form 10 givingreasons for accumulating the income stating that the accumulationwas sought for the purposes of renovation and repairs of oldbuilding, contribution to poor feeding and desandri feedingexpenses. The assessing officer while deciding the application ofincome in Form No.10 found that the purpose of accumulationmentioned therein are vague and not specific and hence declined thebenefit of accumulation under Section 11(2) of the Act by followingthe decision of the Calcutta High Court in the case of DIT(E) VsTrustees of Singhania Charitable Trust (1999 ITR 819) charitable innature. Further the trust is under the control of Official Trusteeof Tamil Nadu and it has to get the permission from the High Courtfor spending the amount. The Commissioner of Income-tax (Appeals)rejected the arguments and confirmed the order of the AssessingOfficer. Aggrieved by the said order, the appellant filed appeal tothe Income-tax Appellate Tribunal and the Tribunal relying on itsorder in the case of Estate of Maligai Merchant in I.T.A.No.1524/04dated 7.6.2005 dismissed the appeal. Aggrieved by the same, thepresent appeal is filed. 3. The learned counsel appearing for the appellant as well asthe counsel for the respondent submits that the issue involved inthis appeal is covered by the decision of this Court in the case ofEstate of Kadapakam Charities Vs. The Asst.Director of Income Tax(Exemptions) II, Chennai – 34 (T.C.(A) No.281 of 2004) dated15.12.2008,wherein it was observed as follows: 3. The learned counsel appearing for the appellant as well asthe counsel for the respondent submits that the issue involved inthis appeal is covered by the decision of this Court in the case ofEstate of Kadapakam Charities Vs. The Asst.Director of Income Tax(Exemptions) II, Chennai – 34 (T.C.(A) No.281 of 2004) dated15.12.2008,wherein it was observed as follows: ".... 8.The decision of the Calcutta High Court willnot strictly apply to this case, since in that case inForm 10, all the objects of the trust had been enumeratedand therefore, rejection of Form 10 was not justified. Inthis case, the purpose has been specified viz., repair andrenovation of the building, and the difficulties inimmediately starting the renovation have also been broughtto the notice of the authorities. But at the same time, wealso see that Form 10 has not been duly filled up. Even inthe matter decided by the Calcutta High Court, theassessee was allowed to adduce fresh evidence to show thespecific purpose for which the trust requires accumulation of the income. In this case too, especially in view of thefact that it is AG & OT who is administering the trust, wefeel that the same indulgence could be shown. We are notanswering the questions of law raised, however, we remandthe matter to the Assessing Officer and the assessee shallspecify the purpose in addition to renovation and repairof the building and also the amount and the period forwhich accumulation is required, and the Assessing Officershall consider the same in accordance with law...." 4. Having regard to the submission made by the counsel oneither side, the order of the Tribunal is hereby set aside and thematter is remitted back to the assessing officer in terms of thedirection given in the order dated 15.12.2008 made in T.C.(A) No.281of 2004 and the tax case is disposed of accordingly. usk Sd/-Asst. Registrar //True Copy// Sub Asst. Registrar Copy to:1.The Income-tax Appellate Tribunal, Madras A Bench, Chennai2.The Commissioner of Income Tax (Appeals)-XIChennai 3.The Asst.Director of Income-tax (Exemptions)-IIChennai. SSN(CO)SR/19.12.2009 T.C.(A).No.965of 2008