DIRECTOR OF INCOME TAX Vs. GURU NANAK FOUNDATION

JUDGEMENT

(1.) THE Tribunal has, while allowing the appeal filed by the assessee and granting registration to it in terms of s. 11(2) of the IT Act, 1961, clearly recorded a finding that the accumulated amount had been spent by the assessee for purchase of land for setting up a school. The Tribunal has, in this connection referred to the payment of earnest money of Rs. 1 which was placed on record. The Tribunal has on that finding reversed the view taken by the AO and the CIT(A) and held that the accumulation was bona fide and the result (sic) of registration to the assessee unjustified. The Tribunal has in this regard, observed : another resolution by way of clarification, clarifying the income of Rs. 34,98,691 was being accumulated for the specific purpose of purchasing land for setting up a secondary public school. When this clarification was filed with the AO, he refused to accept the same on the ground that it was too late to do so. This action of the AO was not justified. He overlooked that in both the quantum of income sought to be accumulated was the same. The assessee has in fact clarificatory resolution. The purchase of the land was only a means of achieving the objective of the assessee for which specific power has been taken in cl. (a) of the memorandum of association. Thus, the bona fide of the accumulation or the purpose for which the income was accumulated are beyond question. The accumulated amount has also been invested for the purpose for which it was accumulated."

(2.) IT is in the light of the above finding, academic now to consider whether there was a possibility of the accumulated amount being utilized for a non -charitable purpose. The fact of the matter is that the accumulated amount has already been utilized by the trust for a purpose which is admittedly charitable.

(3.) NO substantial question of law arises for our consideration in this appeal which fails and is hereby dismissed.