Accumulation under section 11(2) cannot be denied for vague Form 10 if purpose aligns with Trust’s objective

Mumbai ITAT allows Assessee’s (Trust) appeal and holds that accumulation of income under Section 11(2) cannot be denied to Assessee merely on basis of vagueness in Form 10; ITAT relies on Delhi High Court judgment in CIT v. Hotel and Restaurant Association (2003) 261 ITR 190 (Del.) as well as Gujarat High Court judgment in CIT (Exemption) v. Bochasanwasi Shri R. Axar Purushottam Public Charitable Trust (2018) 409 ITR 591 (Guj.) wherein it was held that plurality of purposes is permissible and that lack of excessive detail in Form no. 10 is not fatal if the overall intent and application remain charitable and within the trust deed; ITAT notes that Assessee’s charitable activities carried out by the Assessee particularly conferring Mother Teresa Memorial Award to globally recognised humanitarians and Nobel laureates, disaster relief work, and social justice initiatives, all of which demonstrated bona fide application of income in line with its stated objects; Tribunal holds that similar accumulation was accepted by the Revenue in preceding AYs without objections; Thus, ITAT opines that accumulation could not be denied merely on the ground of alleged vagueness in Form No. 10; Assessee filed return of income declaring Nil income and claimed accumulation of Rs. 16.20 Lac under section 11(2); Assessing Officer accepted Assessee’s registration but denied the accumulation benefit on the premise that Assessee failed to specify a ‘specific purpose’ for accumulation in Form 10 and general reference to the objects of the trust does not satisfy statutory requirements; CIT(A) dismissed Assessee’s appeal; ITAT analyses Section 11(2) and observes that said provision requires Assessee to state the ‘purpose’ for which the income is accumulated but does not in any manner prescribe that such purpose must be minutely itemised or reduced to a single project, so long as it is not outside the trust objects; ITAT notes that Revenue has not disputed compliance with other statutory conditions nor alleged misuse or diversion of accumulated funds.

[In favour of assessee]
(Related Assessment year : 2016-17)
[Harmony Foundation v. ITO (Exemption) [TS-1673-ITAT-2025(Mum)] – Date of Judgement : 20.11.2025 (ITAT Mumbai)]