Rajasthan Ophthalmological Society Vs ITO (ITAT Jaipur)
The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, has ruled in favor of the Rajasthan Ophthalmological Society, a charitable organization, by allowing its claim for exemption on an accumulated income of ₹95 lakhs for the Assessment Year 2018-19. The case centered on whether the society had fulfilled the conditions for accumulating income under Section 11(2) read with Section 11(5) of the Income-tax Act, 1961. The Assessing Officer (AO) and the Commissioner of Income-tax (Appeals) had denied the exemption, arguing that the accumulated funds were not invested in the prescribed modes under Section 11(5) within the relevant financial year.
The society had declared a NIL income in its original and revised returns. During the assessment, it was found that the society had set apart ₹95 lakhs for charitable purposes and had duly filed Form 10, which is required for such accumulation, on September 1, 2018, within the statutory due date. The society’s position was that this amount was in its bank account with Oriental Bank of Commerce (a scheduled bank) as of March 31, 2018. Subsequently, the funds were converted into fixed deposits with the same bank on April 7 and April 9, 2018, which was a few days after the close of the financial year.
