Law:

Section:

Section 11 of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - Assessment year 1997-98 - Whether where assessee trust had only three charitable objects as per its trust deed and it had specified all those objects in its application filed under section 11(2) seeking exemption in respect of funds accumulated by it, it was not required for assessee to be more specific with regard to utilization of those funds - Held, yes FACTS The assessee-trust, set-up for the charitable purposes i.e., for medical relief, help to the poor and educational purposes, claimed exemption in respect of the amount accumulated by it for the said purposes. The Assessing Officer, the Commissioner (Appeals) and the Tribunal, however, held that the assessee was not entitled to the benefit under section 11(2) on the ground that it did not specifically indicate the purposes for which the amount was accumulated. On appeal : HELD In the instant case, the assessee had only three objects as far as its trust deed was concerned. The trust deed required the trust to utilize its funds for charitable purposes, which were medical relief, education and relief to the poor. In the application seeking exemption, the assessee had specified those three objects. It was not required for the assessee to be more specific with regard to the utilization of the funds. [Para 12] It was true that the assessee had mentioned that it was accumulating funds for all the objects for which it was created but plurality of purposes is permitted and if it so happens that an assessee has only three objects or purposes, it may well utilize the funds for all the three objects and purposes. [Para 13] Therefore, the Tribunal was not justified in holding that the assessee was not entitled to accumulate income for the objects of the charitable trust without specifying the purpose for which the income was accumulated. CASES REFERRED TO CIT v. Hotel & Restaurants Association [2003] 261 ITR 190 (Delhi) [Para 6], DIT (Exemption) v. Trustees of Singhania Charitable Trust [1993] 199 ITR 819 (Cal.) [Para 6], CIT v. M.CT. Muthiah Chettiar Family Trust [2000] 245 ITR 400/[2001]114…

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