Law:

Section:

Section 11 of the Income-tax Act, 1961 read with rule 17 of the Income-tax Rules, 1962 - Charitable or religious trust - Exemption of income from property held under - Assessment year 2000-01 - Whether extended period, which is given under section 139(4), can be made available for giving notice for accumulation of income by charitable trust or institution under rule 17 beyond period mentioned in section 139(1) - Held, no - Assessee was a welfare society - It was a State Government undertaking and was registered under section 12A - For relevant assessment year, Assessing Officer declined to grant exemption under section 11 with respect to income accumulated for year on ground that assessee did not submit notice for accumulation within time fixed under rule 17, i.e., within time for filing return of income under section 139(1) - Assessee contended that delay in filing notice for accumulation occurred on account of delay on part of chartered accountant to finalise accounts and to file return - Whether on facts, impugned order was to be set aside and Assessing Officer was to be directed to pass appropriate orders - Held, yes FACTS The assessee-society was a State Government undertaking and was registered under section 12A. It was required to file the return of income for the assessment year 2000-01 by 31-10-2000 but it did so only on 22-1-2001 allegedly due to delay on part of the chartered accountant to finalise the accounts. Alongwith the return, the assessee filed the notice for accumulation of income under rule 17. The Assessing Officer declined to grant exemption under section 11 with respect to income accumulated for the relevant assessment year on ground of delay in filing notice under rule 17. The assessee filed an application before the Commissioner for condo- nation of delay in filing the notice under rule 17 to take benefit of a Government circular. However, the application was rejected. The assessee, therefore, approached the High Court seeking direction for availing of exemption under section 11 for accumulation of income. HELD Rule 17 is unambiguously specific insofar as it mandates that the notice shall be delivered before the expiry of the time…

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