Law: Income Tax Act, 1961

Section: 11,256(2)

(a) Income-tax---tax---Reference---Charitable purposes---Finding that income of trust had been accumulated and that balance had been applied for charitable purposes---Tribunal was justified in granting exemption to charitable trust---No question of law arose---Indian Income Tax Act. 1961 Ss. 11 & 256 (2) . ----Reference---Charitable purposes---Accumulation of income of charitable trust---Investment or` income beyond ceiling imposed by law in accordance with S. 11(2)---Tribunal justified in granting exemption in respect of such amount---Tribunal's decision in accordance with Supreme Court decision--­No question of law arose---Indian Income Tax Act, 1961, Ss. 11 & 256(2). Held, dismissing the application for reference, (i) that the Tribunal had held that as regards Rs. 42,243, it should be taken as part of the investment over and above Rs. 6 lakhs invested in approved securities, as according to the Tribunal, the amount opted to be accumulated should be taken as Rs. 6.5 lakhs as mentioned in Form No. 10 and not Rs. 6 lakhs as taken by the Income-tax Officer, and that if the amount to be accumulated was taken as Rs. 6.5 lakhs; there was no violation of the undertaking given in Form No 10, since the balance amount after considering the investment in securities under section 11(2) of the Income Tax Act, 1961, amounting to Rs. 6 lakhs was utilised for the charitable purposes, before the expiry of six months, being the time allowed by law for investment and that even if there was such a failure in respect of Rs. 50,000 any income could be brought to tax in the succeeding year. The Tribunal held that, as the requirement as to investment was to ensure that the funds were not misused, and as a portion of the funds has been actually utilised for charitable purposes, there could be no inference that there was no accumulation. This finding was arrived at by the Tribunal on the basis of facts. Accordingly, no question of law arose from its order. (ii) that the Tribunal had held that the sum of Rs. 42,243 should be considered as having been applied within the meaning of section 11(1) of the Act. This finding of the Tribunal had not been questioned by 'the Department.…

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