A. Ramalingeswara Rao, J. :

1. This appeal was filed under s. 260A of the IT Act, 1961 (for short, the Act), against the order in ITA No. 133/Visakha/1997 passed by the Tribunal, Visakhapatnam, on 5th March, 2003.

2. In this appeal filed by the assessee, the substantial question of law that arises for our consideration is as follows :

"Whether, on the facts and in the circumstances of the case the order of the Tribunal, Visakhapatnam, was perverse in reversing the order passed by the CIT(A) so far as disallowing the benefit of accumulation by the assessee of an amount of Rs. 3,00,000 under s. 11(2) of the Act"

3. The assessee is a trust formed for charitable purposes by a deed of trust dt. 17th Nov., 1995. The objects of the trust were mentioned in cl. 3 of the deed of trust and they include upliftment of weaker sections of the society, advancement of the Bharatiya Samskriti, running schools and colleges, providing medical relief, rendering help to the people affected by natural calamities etc. It was registered under s. 12A of the Act. It filed its return of income for the asst. yr. 1996-97 on 25th Sept., 1996 declaring 'nil' income. The return was processed and taken up for scrutiny and notices under ss. 142(1) and 143(2) of the Act were issued. Pursuant to the said notices, the Secretary of the Trust appeared before the AO and produced the books of accounts for verification. The assessee has accumulated an amount of Rs. 3,00,000 and enclosed Form No. 10 to the return of the income and also enclosed copy of the resolution depositing the said amount with Indian Overseas Bank for a period of three years for future utilization. Thereafter, by another letter dt. 10th March, 1997, the President of the Trust requested that the said amount may be allowed for the purpose of utilizing the fund for the welfare of Scheduled Castes, Scheduled Tribes, Vanvasis, socially and economically weaker sections of the society as mentioned in cl. 3(a) of the trust deed. He also expressed his willingness to file a revised Form No. 10 for consideration and acceptance. The AO passed an order on 12th March, 1997 disallowing the benefit of accumulation under s. 11(2) of the Act for the amount of Rs. 3,00,000 and demanded the tax at Rs. 1,27,676. Against the said order, the assessee preferred an appeal before the CIT(A), Vijayawada, who, by his order dt. 29th Aug., 1997, allowed the appeal by placing reliance on Director of IT (Exemption) vs. Trustees of Singhania Charitable Trust (1993) 199 ITR 819 (Cal). Challenging the said order of the appellate authority, the Revenue preferred an appeal before the Tribunal, Visakhapatnam, in ITA No. 133/Visakha/1997. The Tribunal, by its order dt. 5th March, 2003, reversed the order of the CIT(A) dt. 29th Aug., 1997, and allowed the appeal preferred by the Revenue holding as follows :

"In view of the latest position of law as has been held by the apex Court in the case of Nagpur Hotel Owner's Association, although there is no specific time limit in the statute for passing on notification/information to the AO regarding the purpose of accumulation, yet the assessee has to pass the information before the assessment is completed. Even holding such view of the matter and without taking resort to the case laws, strictly by the AO the information passed on to the AO on 10th March, 1997, the information was not sufficient and it was just stating that "for future utilization towards the object of the trust". It is not specific and in the absence of such specific object, only compliance of the object of the trust will not amount compliance of the specific purpose as has been contemplated under s. 11(2) of the IT Act. Therefore, the order passed by the CIT(A) suffers from serious infirmity and has to be rejected. Holding such view of the matter, we cancel the order of the CIT(A) and the appeal filed by the Revenue is hereby allowed."

Against the said order of the Tribunal, the present appeal was preferred by the assessee.

4. Learned counsel for the appellant submitted that the explanatory letter was submitted to the AO on 10th March, 1997, well before the completion of assessment by the AO and as per the ratio laid down in CIT vs. Nagpur Hotel Owners Association (2001) 165 CTR (SC) 1 : (2001) 247 ITR 201 (SC), and hence, the AO should have taken the same into consideration as sufficient compliance with s. 11(2) of the Act. She also submitted that though the Tribunal has taken note of the explanation dt. 10th March, 1997, it has not gone into the contents of the said explanation, but merely quoted from the order of the AO, and hence, the order of the Tribunal is incorrect in law. Learned counsel appearing for the Revenue, on the other hand, submitted, by placing reliance on r. 17 of the IT Rules r/w s. 139 of the Act, that the assessee should have filed required information by 30th Sept., 1996 but submitted the information only on 10th March, 1997 and hence could not be taken into consideration. But, he fairly submitted that the explanation in the letter dt. 10th March, 1997 is in sufficient compliance with s. 11(2) of the Act.

5. Sec. 11(2) of the Act reads as follows :

"Where eighty-five per cent of the income referred to in cl. (a) or cl. (b) of sub-s. (1) r/w the Explanation to that sub-section is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, namely :

(a) such, person specifies, by notice in writing given to the AO in the prescribed manner, the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed ten years;

(b) the money so accumulated or set apart is invested or deposited in the forms or modes specified in sub-s. (5)…"

6. A perusal of the above provision makes it clear that the assessee should supply the information in Form No. 10 and indicate the purposes for which the accumulated funds were meant to be utilized.

7. The said provision came up for consideration in Trustees of Singhania Charitable Trust (supra). The High Court of Calcutta was considering the following questions of law when they were referred to it under s. 256(1) of the Act for the asst. yr. 1984-85 :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that there is nothing illegal on the part of the assessee in giving notice to the ITO in Form No. 10 listing all its objects for the purpose of accumulation of income as provided in s. 11(2) of the IT Act, 1961, which requires specification of the purposes

2. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in cancelling the order of the CIT under s. 263 of the IT Act, 1961, holding that the assessment of the ITO allowing accumulation of the income under s. 11(2) of the IT Act, for all the objects for which the trust was created and not for any specific objects, was neither erroneous nor prejudicial to the interests of the Revenue"

8. In the said case the ITO allowed exemption under s. 11 of the Act by relying on the notice given by the assessee under s. 11(2) of the Act. The CIT, by invoking powers vested in him under s. 263 of the Act, called for and examined the assessment records of the assessee. After notice to the assessee and response, he set aside the order of assessment and ordered for de novo enquiry. The assessee preferred an appeal to the Tribunal. The Tribunal held that since a plurality of charitable purposes is not ruled out under the scheme of the Act, no objection could possibly be taken to the assessee's listing out all the objects of the trust in Form No. 10. The matter was taken by the Revenue to the High Court. It was contended that one purpose is inter-linked with the other and, therefore, the mention of all the purposes does not make any difference and satisfies the requirement of sub-s. (2) of s. 11. The said contention of the assessee was not accepted holding that the said contention would render the requirement of specification of the purpose for accumulation in that sub-section redundant. It was held that the purposes to be specified cannot, under any circumstances, tread beyond the objects clause of the trust and the Legislature could not have thought of the need of specification of the purpose if it did not have in mind the particularity of the purpose or purposes falling within the ambit of the objects clause of the trust deed. Accordingly, it answered question No. 2 in the negative and declined to answer question No. 1. It remanded the matter to the Tribunal to allow the assessee to adduce fresh evidence whether in the form of any resolution or otherwise showing that the specific purpose for which the trust requires the accumulation of the income exists and observed that the said evidence should be considered by the Tribunal.

9. The said section was considered by the High Court of Delhi in CIT vs. Hotel & Restaurant Association (2003) 182 CTR (Del) 374 : (2003) 261 ITR 190 (Del) and it was held as follows :

"…It is true that specification of certain purpose or purposes is needed for accumulations of trust's income under s. 11(2) of the act. At the same time the purpose or purposes to be specified cannot be beyond the objects of the trust. Plurality of the purposes for accumulation is not precluded but it depends on the precise purpose for which the accumulation is intended. In the present case, both the appellate authorities below have recorded a concurrent finding that the income was sought to be accumulated by the assessee to achieve the object for which the assessee was incorporated. It is not the case of the Revenue that any of the objects of the assessee-company were not for charitable purpose. The aforementioned finding by the Tribunal is essentially a finding of fact giving rise to no question of law."

10. In another case before the Delhi High Court in Director of IT vs. Mitsui & Co. Environmental Trust (2007) 211 CTR (Del) 352 : (2008) 303 ITR 111 (Del) the above issue was considered and the aforementioned decision of the Calcutta High Court was also noticed. Following the earlier judgment in Hotel & Restaurant Association (supra) the High Court reiterated its view.

11. The Supreme Court also had an occasion to consider s. 11 of the Act in Nagpur Hotel Owners' Association (supra), wherein the issue related to the time period within which the information should be furnished to the assessing authority. The Supreme Court categorically held that the intimation required under s. 11 of the Act has to be furnished before the assessing authority before he completes the concerned assessment.

12. In the case before us, the required information was furnished through Form No. 10 along with the return and subsequently on 10th March, 1997 the assessee submitted another letter to the AO intimating the specific purpose for which the said amount was sought to be utilized by indicating that they want to utilize the amount for the objects mentioned in cl. 3(a) of the trust deed. Unlike the facts mentioned in the aforementioned case before the Calcutta High Court, in the instant case, the assessee specifically mentioned the purpose for which the accumulated income was sought to be utilized. Learned counsel for the Revenue also fairly submitted that the said intimation is sufficient compliance within the meaning of s. 11(2) of the Act. But, his opposition is only with regard to the furnishing of the required information on 10th March, 1997, as he submits that it ought to have been furnished by 30th Sept., 1996, the last date for filing of the return. It is an admitted fact that the said information was furnished before the completion of the assessment.

13. In view of the ratio laid down by the Supreme Court in Nagpur Hotel Owners' Association (supra) and the acceptance of the date of information by the assessee as 10th March, 1997, viz., before the date of completion of assessment by the Tribunal, we do not think that the objection raised by the learned counsel for the Revenue has any substance.

14. In view of the above, we answer the substantial question of law in favour of the assessee and against the Revenue, and accordingly, allow the appeal. The miscellaneous petitions, if any, stand disposed of. No costs.