INCOME TAX OFFICER v. 1008 MAHARAJ BRAHM SAGAR GARIB DASIA POORAN SINGH TRUST - 1984-LL-1128-6

Citation	1984-LL-1128-6
Appellant Name	INCOME TAX OFFICER
Respondent Name	1008 MAHARAJ BRAHM SAGAR GARIB DASIA POORAN SINGH TRUST
Court	ITAT
Relevant Act	Income-tax
Date of Order	28/11/1984
Assessment Year	1979-80
Judgment	View Judgment
Keyword Tags	bona fide belief • succeeding year
Bot Summary:	The only dispute raised in this departmental appeal pertains to exemption granted to the assessee charitable trust. The said trust had some income from interest which was not utilised during the year when the income accrued and the assessee trust did not make any application to the ITO for accumulation of the same. Is was recognised by the CIT. Since within immediately next succeeding year, the said amount was spend out, which was found as a fact by the AAC, she accepted the contention of the assessee and reversed the finding of the ITO, granting exemption. Counsel for the assessee submitted that if we read s. 1(5) and notice that the trust was registered with CIT and it was under a bona fide belief that the assessee if once applied for accumulation is sufficient for ten year, no further letter was sent to the ITO. He also relied on the case of Sudarshan Sewa Trust vs. ITO 2 ITD 167. It is really a charitable trust and purpose is also apparent and it is for that purpose that the funds are utilised. Had it been given in the next year, it could be a case of condonation but the very fact is that in the next year amounts were spent. So far applicability of s. 13(1)(bb) is concerned, we are fortified in our action by the Amritsar Bench decision in the case of Sudarshan Sewa Trust.

only dispute raised in this departmental appeal pertains to exemption granted to assessee charitable trust. said trust had some income from interest which was not utilised during year when income accrued and assessee trust did not make any application to ITO for accumulation of same. However, is was recognised by CIT. Since within immediately next succeeding year, said amount was spend out, which was found as fact by AAC, she accepted contention of assessee and reversed finding of ITO, granting exemption. ld. departmental representative submitted that as per Explanation 2 to s . 11(1), on one hand, and violation of s. 13(1)(bb) on other hand, exemption should not have been granted. On other hand, ld. counsel for assessee submitted that if we read s. 1(5) and notice that trust was registered with CIT and it was under bona fide belief that assessee if once applied for accumulation is sufficient for ten year, no further letter was sent to ITO. He also relied on case of Sudarshan Sewa Trust vs. ITO (1982) 2 ITD 167. After taking into consideration rival submission and looking to facts, we are unable to interfere in finding to AAC. This is true that entire income was spent within following year as detailed by AAC in his order. This is also true that trust in question is not creation by business house. It is really charitable trust and purpose is also apparent and it is for that purpose that funds are utilised. There may be technical flaw that application for accumulation was not there. Had it been given in next year, it could be case of condonation but very fact is that in next year amounts were spent. So far applicability of s. 13(1)(bb) is concerned, we are fortified in our action by Amritsar Bench decision in case of Sudarshan Sewa Trust (supra). When we read section, it becomes apparent that assessee has not committed any fault, so as to face denial of exemption. action of AAC is, therefore, hereby confirmed. In result, appeal is dismissed. *** INCOME TAX OFFICER v. 1008 MAHARAJ BRAHM SAGAR GARIB DASIA POORAN SINGH TRUST

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