High Court Of Delhi
Director Of Income Tax (Exemption) vs. Mamta Health Institute for Mother & Children
Section 11(2)
Asst. Year 1997-98
Madan B. Lokur & V.B. Gupta, JJ.
IT Appeal No. 503 of 2005
3rd May, 2007
Counsel Appeared :
Ms. P.L. Bansal, for the Appellant : Satish Khosla with Manu K. Giri, for the Respondent
JUDGMENT
MADAN B. LOKUR, J. :
The Revenue is aggrieved by an order dt. 22nd Dec., 2004 passed by the Tribunal, Delhi Bench ‘B’ in ITA No. 566/Del/2002 relevant for the asst. yr. 1997-98.
2. The question which arose for consideration before the statutory authorities was whether the assessee was entitled to the benefit of accumulation under s. 11(2) of the IT Act, 1961. The assessee is a society registered under s. 12A of the Act. Learned counsel for the assessee has placed before us the objects of the society which he says were before the AO. The objects are taken on record.
3. On a perusal of the objects of the society, we find that these include following :
“(i) To develop health resources particularly in respect of children belonging to the vulnerable segments of the population;
(ii) To educate the people especially the mothers regarding maintenance and improvement of health and nutrition of children;
(iii) To conduct classes and schools for training in matters of health nutrition and all other allied subjects pertaining to medicine and community development;
(iv) To establish and maintain demonstration centres in Delhi for disseminating knowledge on nutrition and health;
(v) To help individuals and associations in the preparation of projects on nutrition and health with special emphasis on the educational aspects of both, to evaluate these projects to recommend, coordinate and when required and possible, sponsor these projects without infringing on the autonomy of the applicant;
(vi) To conduct educational programme for general education of the rural women, as well as other educational programmes for all age groups through schools, college and other educational institution.”
4. Since the assessee could not utilise its entire income towards charitable purposes, it claimed accumulation of set apart income and submitted its option in Form No. 10. The assessee mentioned the purpose of accumulation as follows : “As per resolution” In the resolution it was mentioned as under : “A sum of Rs. 7,00,000 (seven lakhs only) out of the income of organisation for the period ended 31st March, 1997 be set apart and accumulated for the specified purpose of financing ongoing programmes and development of the organisation and furtherance of objects of the society.”
5. The AO as well as the CIT(A) did not accept the contention of the assessee and denied the benefit of accumulation. However, the Tribunal accepted the contention of the assessee and gave it the benefit of accumulation in view of the judgment of this Court in CIT vs. Hotel & Restaurant Association (2003) 182 CTR (Del) 374 : (2003) 261 ITR 190 (Del).
6. In that decision, the contention of learned counsel for the Revenue was to the effect that the appellate authorities under the Act had failed to appreciate that in the prescribed form, the assessee did not indicate the specific purpose for which the income was sought to be accumulated and, therefore, the statutory requirement had not been strictly complied with disentitling the assessee from relief under s. 11(2) of the Act. This Court rejected the contention and held as follows :
“It is true that specification of certain purpose or purposes is needed for accumulations of the trust’s income under s. 11(2) of the Act. At the same time the purpose or purposes to be specified cannot be beyond the objects of the trust. Plurality of the purposes for accumulation is not precluded but it depends on the precise purpose for which the accumulation is intended. In the present case, both the appellate authorities below have recorded a concurrent finding that the income was sought to be accumulated by the assessee to achieve the object for which the assessee was incorporated. It is not the case of the Revenue that any of the objects of the assessee company were not for charitable purpose. The aforenoted finding by the Tribunal is essentially a finding of fact giving rise to no question of law.”
7. The contention of learned counsel for the Revenue is that the ongoing projects of the assessee (as stated in the resolution) have not been specified and, therefore, the contents of the form are quite vague.
8. First of all, we may note that if the AO did not have details of the ongoing projects of the assessee, he could have asked for information about them. In any event, learned counsel for the assessee has placed before us a copy of the annual report of the assessee which he says, on instructions, was placed before the AO as well. This document is taken on record.
9. We find, on going through the annual report for year 1996-97 that the ongoing projects were as follows :
(1) An integrated programme for adolescent girl of urban slums towards woman empowerment.
(2) Entrepreneurship development programme for adolescent girls/youth and women.
(3) Reproductive child health approach to woman and child in urban poor scenario.
(4) HIV/STD prevention.
(5) Community based approach to combat undernutrition in infants and children in an urban poor community. A perusal of the annual report as well as the overview of these projects clearly shows that the projects were in consonance with the objectives sought to be achieved by the assessee, which were for the benefit of women and adolescent girls particularly in the slums or in a community which was not particularly well off. On going through the objects of the society, it is clear that the assessee sought to accumulate funds for a charitable purpose. Quite clearly, the Tribunal was correct in its conclusion that the decision of this Court would apply to the facts of the case and that the assessee was entitled to the benefit of accumulation.
10. We do not find any infirmity in the order passed by the Tribunal. No substantial question of law arises for consideration. The appeal is dismissed.
[Citation : 293 ITR 380]
