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Showing contexts for: charitable trust objects in Income-Tax Officer vs Maganbhai S. Patel on 30 September, 1999Matching Fragments
(i) in holding that initiation of proceedings under section 147 was not justified and the re-assessment made was not valid.
(ii) in holding that application of the trust fund to the extent of Rs. 1,05,000 for the purchase of premises in Suraj Plaza-II complex amounted to utilisation of income for charitable objects of the Trust Acrid thus eligible for exemption under section 11 of the Income-tax Act.
2. On the facts and in the circumstances of the case and in law the ld. CIT(A) ought to have upheld the order of the Assessing Officer.
15. In his rejoinder, the ld. D.R. once again pointed out that letting out of the property to the Bank of Baroda was not in furtherance of the charitable objects of the trust as letting out of the property is not one of the charitable objects of the trust. Relying on the decision of the Supreme Court in Aditanar Educational Institution v. Addl. CIT [1997] 224 ITR ITR 310/90 Taxman 528, the ld. D.R. pleaded that the question of exemption should be considered for each year specifically in the light of the application of the funds for specified purposes.
21. One of the arguments advanced by the revenue was that the trust did not use the accumulated income for the purpose specified in Form No. 10. However, we find that this argument is not tenable in view of the evidence available on record which indicates that the assessee trust has not misused the accumulated funds for any purpose other than the charitable objects of the trust. The third object in Form No. 10 was stated as under :-
"to donate and/or spend funds set apart and accumulated as aforesaid, for any public charitable purposes."
25. Even though the above observations were made with reference to the language of section 10(22) of the Income-tax Act, these observations hold good in the context of section 11 where also the objects of the trust established purportedly for charitable purposes will have to be considered from the point of view of availability of funds, earning of income, surplus accumulated, the purpose of such accumulation and the way in which income and the surplus funds are utilised. It is not established in the present case that the assessee trust invested in the immovable property or let out the immovable property for the purpose of earning profit with a view to using the funds for any ulterior purpose i.e. other than the charitable objects of the trust. It is also not in dispute that the Trust is registered as a Charitable Trust and it has complied with the procedural formalities laid down in section 11 read with sections 12, 12A and 13 for the various assessment years in question. Hence the claim of exemption under section 11 made by the Trust is perfectly in order. Even though the revenue authorities are entitled to look into the statements of account from year to year, a broad view should be taken and in an overall view of the matter, it is clear that in the present case, the dominant motive relating to the immovable property transaction was to augment the income and accumulate the surplus funds for the purpose of contribution to the M.S. University of Baroda by way of donation and by way of construction of property for the said University. Thus we are fortified in reaching the conclusion indicated by us in paras 13 and 18 above by the ratio of the decision of the Hon'ble Supreme Court mentioned supra and the case laws referred to in paras 6, 7, 8 and 11 above. In view of the foregoing discussion, we uphold the order of the CIT(A) and do not find any reason for interference.