Senior Citizen Santacruz (Paschim) Sanstha Vs CIT (ITAT Mumbai)
Section 11(2) Accumulation Allowed Despite Vague Form 10: ITAT Mumbai Holds Substantial Compliance Sufficient
The Mumbai ITAT (G-Bench) allowed the appeal of a charitable trust for AY 2017-18 and deleted the denial of accumulation of ₹70.37 lakh under Section 11(2), which had been rejected solely because Form No.10 mentioned the purpose of accumulation as “charitable purpose” without further specificity.
The Tribunal held that while Section 11(2) requires accumulation for a specific purpose, mere technical or clerical defects in Form 10 are not fatal where the Assessing Officer was otherwise fully aware of the actual purpose and utilization of funds. In the present case, the trust was running an eco-friendly PNG crematorium at Santacruz (West); detailed records, board resolutions, objects of the trust, and capital expenditure statements showing deployment of funds towards the crematorium project were already on record and examined during assessment proceedings.
Relying on binding High Court precedents, including CIT(E) v. Bochasanwasi Shri Akshar Purshottam Public Charitable Trust (Gujarat HC) and Samaj Seva Nidhi v. ACIT (Telangana & AP HC), the ITAT held that accumulation cannot be denied when the purpose is identifiable from records and remains within the charitable objects of the trust. The Tribunal emphasized that accumulation cannot travel beyond trust objects and that substance must prevail over form.
Accordingly, the ITAT directed the AO to allow the accumulation under Section 11(2) and allowed the appeal in full.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Present appeal filed by assessee arises out of order dated 04/09/2025 passed by NFAC, Delhi [hereinafter “the Ld.CIT(A)”], for assessment year 2017-18, on following grounds of appeal:-
“1. DELETION OF ACCUMULATION UNDER SECTION 11(2) AMOUNTING TO 770,37,775/- OF THE INCOME TAX ACT, 1961, AND REJECTING FORM NO.10 FILED ALONG WITH RETURN OF INCOME
[a] The Commissioner of Income Tax (Appeals) erred in fact and in law in rejecting Form No.10 filed by the appellant Trust and thereby denying accumulation of 770,37,775/- under Section 11(2) of the Income Tax Act, 1961.
[b] The objects of the Trust having been accepted as charitable, the appellant ought not have been subjected to tax on the sum of 770,37,775/-on a technical ground;
2. GENERAL:
The appellant Trust craves leave to add to, alter and amend the grounds of appeal on or before the date of hearing.”
2. Brief facts of the case are as under:-
