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4.1. The assessee challenged the order of the Commissioner (Appeals) by filing an appeal before the Tribunal. The Tribunal held that by handing over of charitable trust income to another charitable trust having similar and other objects of charity it would amount to application of income to charitable purposes. The Tribunal relied upon a decision in IRC v. Helen Slater Charitable Trust Ltd. (1980) 3 WL.R. 157 : 1 All ER 785 and the decision of this court in the case of CIT v. Thanthi Trust (1981) 23 CTR (Mad) 155 : (1982) 137 ITR 735 (Mad) and held that the assessee was entitled and authorised to apply its income to charitable purposes and handing over of accumulated income to another charitable trust was within the powers of the assessee-trust and it would amount to application of its income. The Tribunal further held that the assessee was specifically authorised to make over the accumulated income to another charitable trust to carry out other objects of the said charitable trust. The Tribunal held that there is no difference between the employment of the expression 'utilised' in clause (c) and the expression, 'used' in clause (a) of section (3) of the Act. According to the Tribunal, as the assessee had taken steps for forming M. Ct. Muthiah Foundation for the specific purpose of acquiring or establishing certain educational institutions, hospitals and maintaining them, the assessee handed over the accumulated income to it for implementing the objects, and the assessee had utilised the income for the purposes stated by it in the notice given to the Income Tax Officer under s, 11(2) of the Act. The Tribunal held that the assessee had completely divested of its ownership over the accumulated income by handing it over and put it beyond its control and it would amount to utilisation for which the notice was given. The Tribunal, therefore, held that the Commissioner was not justified in holding that the accumulated income of the trust was not applied or utilised for the charitable purposes within the period specified in Form 10 notice or in the year immediately following the expiry thereof. The Tribunal also held that the Commissioner was not justified in taking 100 per cent of the income each year even assuming that the assessee had not applied the accumulated income for charitable purposes within the period provided in section 11(3) of the Act. The Tribunal, in this view of the matter, allowed the appeal preferred by the assessee.

The trust is allowed to accumulate its income for a maximum period of ten years. The condition is that the trust should specify in the prescribed form the purpose for which the income is accumulated or set apart. It is not enough for the trustees to repeat the objects of the trust, but must specify a particular purpose for which the income is being accumulated. We are in agreement with the view of the Calcutta High Court in Director of IT v. Singhania Charitable Trust (1993) 199 1TR 819 (Cal) wherein the Calcutta High Court held that the long-term accumulation should be for a definite and concrete purpose or purposes and the charitable trust cannot use its objects as the purposes for the accumulation of the income under section 11(2) of the Act. It is only by mentioning the purposes specifically, it will be possible for the Income Tax Officer to monitor the situation whether the trust has applied its accumulated income for the purposes mentioned in Form No. 10. Therefore, it is essential that the trust should specify its purposes and the requirement is that the purposes must have some individuality and mere repetition of the objects of the trust would not meet the requirements of section 11(2) of the Act. However, on the facts of the case, it is seen that the assessee-trust had merely repeated its objects when it filed the necessary Form No. 10 furnished by the assessee, allowed its income to be accumulated for a period of ten years and that it is too late in the date to question the purposes mentioned in Form No. 10 and learned senior counsel for the revenue in his fairness has not disputed that the department is not in a position how to challenge that the Form No. 10 filed is invalid.

11. Learned senior counsel for the revenue also has not disputed that insofar as the application of income of the trust under section 11(1)(a) of the Act is concerned, the payment of a sum from one charitable trust to another charitable trust for utilisation by the latter trust towards its charitable objects would amount to application of income for charitable purposes. The above proposition is well settled by a decision of this court in the case of CIT v. Thanthi Trust (supra). In that case, this court referred to a Chancery decision in IRC v. Helen Siater Charitable Trust Ltd. (supra) wherein the court construed the expression, 'applied for charitable purposes' as making transfer of funds outright to another charitable institution which was exclusively for charitable objects and the transfer of assets by one institution in favour of another institution in such a manner as to pass whole right to the transferee must be said to have applied such assets for charitable purposes.

12. The above view is uniformly taken by several High Courts (vide : CIT v. Sarladeid Sarabliai Trust No. 2 (supra), CIT v. Trustees of the Jacti Trust (1982) 133 ITR 494 (Bom), CIT v. Hinclusthan Charity Trust (1982) 29 CTR (Cal) 43 .. (1983) 139 1TR 913 (Cal), CIT v. JK. Charitable Trust (1992) 196 ITR 31 (All) and CIT v. Nizarn's Charitable Trust (1981) 131 ITR 497 (AP). The Board has also reiterated the same provision of law and issued a Circular dated 5-1-1978 (Instruction No. 1132 dated 5-1-1978-Ed.), wherein the Board has stated that the payment of a sum by one charitable trust to another for utilisation by the donee trust towards its charitable objects is proper application of income for charitable purpose in the hands of the donee trust. Recently, the Supreme Court in the case of S.RMM.CT.M. Tiruppani Trust v. CIT (supra) has also taken the view that the money spent for purchase of a building which is to be utilised as a hospital would amount to application of income under section 11(1) of the Act.