High Court Of Delhi
Director Of Income Tax (Exemption) vs. Daulat Ram Education Society
Section 11
T.S. Thakur & Badar Durrez Ahmed, JJ.
IT Appeal No. 644 of 2005
24th August, 2005
Counsel Appeared :
R.D. Jolly, for the Appellant : O.S. Bajpai, for the Respondent
JUDGMENT
By the court :
CM No. 11169 of 2005 : Heard. For the reasons stated in the application which is supported by an affidavit, the delay in filing of this appeal is condoned and the application disposed of. ITA No. 644 of 2005 :
The only question which the Revenue proposes to raise for the determination of this Court is whether the Tribunal was correct in law in granting exemption under s. 11 of the IT Act despite the fact that the assessee had not mentioned any specific purpose for accumulation of its income in Form No. 10 submitted by it.
Mr. Jolly, learned counsel for the Revenue argued that the purposes specified in Form No. 10 were general and did not, therefore, constitute a sufficient compliance with the provisions of s. 11 (2) of the Act. He urged that in order to be eligible for the grant of the benefit under s. 11, the assessee was required to specify in clear terms the purpose for which the income was being accumulated by it. This requirement, according to him, was not satisfied by the assessee in the present case as the purposes mentioned were of a general nature.
The Tribunal has placed reliance upon the judgment of a Division Bench of this Court in CIT vs. Hotel & Restaurant Association (2003) 182 CTR (Del) 374 : (2003) 261 ITR 190 (Del). In that case also the assessee had accumulated the unspent amount for being spent on more than one purposes specified by it. The question for consideration was whether it was necessary for the assessee to make a specific mention of any purpose or purposes to enable it to accumulate the income. The Court held that s. 11(2) of the Act did not prohibit plurality of purposes. The Court also held that the purposes which the assessee had specified formed part of its objects and were charitable in nature. The position is no different in the instant case. Here too, out of 29 purposes/objects stipulated in the memorandum of association, the assessee has specified eight purposes in Form No. 10 for which it was accumulating the unspent income while claiming benefit under s. 11. It is not the case of the Revenue that any of these eight purposes are not charitable or that the same do not figure in the memorandum of association. In the circumstances, just because more than one purpose have been specified and just because details about the plans which the assessee has for spending on such purposes are not given may not be sufficient to deny the exemption admissible to it under s. 11. So long as one or more of the purposes specified by the assessee find place in the objects for which the society has been incorporated and so long as the said purpose are charitable in character, the benefit admissible under s. 11 must flow to the assessee.
In the light of what is stated above, no substantial question of law arises for consideration. The appeal fails and is hereby dismissed.
[Citation : 278 ITR 260]
