Charitable purpose: Exemption u/s. 11: A. Y. 2008-09: Accumulation of income: Notice u/s. 11(2)(a) to be furnished in Form 10: Information furnished in form of letter with full detail as required in Form 10: Sufficient compliance: Assessee entitled to exemption u/s. 11:

The assessee, a charitable Trust was registered u/s. 12A. For the A. Y. 2008-09, the Assessing Officer disallowed the claim for exemption u/s. 11 of the Act in respect of the accumulated income inter alia on the ground that the notice u/s. 11(2)(a) was not in the specified Form 10 as prescribed by Rule 17. The Tribunal found that the information with full details as required in Form 10 was furnished by the assessee by a letter. The Tribunal held that the assessee had made an investment in the next year amounting to Rs. 1,25,17,086/- and thus the purpose of the provisions of the Act had been achieved. The Tribunal accordingly allowed the claim of the assessee.

On appeal by the Revenue, the Allahabad High Court upheld the decision of the Tribunal and held as under:

“i) We do not find any error of law in the order of the Tribunal. When a request by way of a letter, which complies with the requirement and furnishes all the information required in Form 10 was made available on record and there was sufficient proof before the Assessing Officer that the amount was not only kept apart but was also spent in the next year, the adherence to the form and not substance was not valid exercise of power by the Assessing Officer.

ii) The questions of law are decided in favour of the assessee and against the Department.”