Director of Income Tax (Exepmtion) vs Mamta Health Institute for Mother and Children

Madan B. Lokur, J.—The question which arose for consideration before the statutory authorities was whether the assessed was entitled to

the benefit of accumulation u/s 11(2) of the Income Tax Act, 1961. The assessed is a Society registered u/s 12-A of the Act.? Learned Counsel

for the assessed has placed before us the objects of the Society which he says were before the Assessing Officer. The objects are taken on

record.

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, co-ordinate 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;

Since the assessed could not utilise its entire income towards charitable purposes, it claimed accumulation of set-apart income and submitted its

option in Form - 10. The assessed 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, 97 be set apart and accumulated

for the specified purpose of financing on going programmes and development of the organisation and furtherance of objects of the society.

The Assessing Officer as well as the Commissioner of Income Tax (Appeals) did not accept the contention of the assessed and denied the

benefit of accumulation. However, the Tribunal accepted the contention of the assessed and gave it the benefit of accumulation in view of the

judgment of this Court in Commissioner of Income Tax Vs. Hotel and Restaurant Association,

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 assessed 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 assessed from relief u/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 u/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 assessed to achieve the object for which the assessed was incorporated. It

is not the case of the Revenue that any of the objects of the assessed-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.

The contention of learned Counsel for the Revenue is that the on-going projects of the assessed (as stated in the resolution) have not been

specified and, Therefore, the contents of the form are quite vague. First of all, we may note that if the Assessing Officer did not have details of the

on-going projects of the assessed, he could have asked for information about them. In any event, learned Counsel for the assessed has placed

before us a copy of the annual report of the assessed which he says, on instructions, was placed before the Assessing Officer as well. This

document is taken on record.

We find, on going through the annual report for year 1996-97 that the on-going 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 under nutrition 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 assessed, 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 assessed 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

assessed was entitled to the benefit of accumulation. 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.