My Form 10 described the purpose of accumulation in the words of the trust's objects. The Assessing Officer says that is not a 'specific purpose'. Is he right?
On these facts the Tribunal agreed with him: a purpose stated as 'hold seminars/workshops/conferences/buyers sellers meets/etc. to promote trade and develop knowledge' was not specified with the required clarity and precision, and the trust had not demonstrated the specific purpose for which the accumulated funds were to be used. But the Tribunal did not tax the accumulation — following the Gujarat High Court in Bochasanwasi Shri Akshar Purushottam it restored the matter to the Assessing Officer to verify how the money was actually spent within the five years.
Decided by the ITAT (Om Prakash Kant AM and Anikesh Banerjee JM) on 2026-04-09, reported as ITA No. 913/Mum/2026 (ITAT Mumbai 'H(SMC)' Bench). It bears on section 11, section 11(2), section 12A, section 143(3), section 250 of the Income Tax Act 1961, in Charitable Trusts & Exemption and Capital Gains Exemptions matters.
This is the Revenue's argument on Form 10 succeeding — though not the Revenue winning the appeal, which was allowed for statistical purposes — and it is the point most trusts get wrong: the disputes about lateness get all the attention, but a Form 10 filed perfectly on time can still fail on content. The Assessing Officer's objection here — that the purposes were revenue in nature, uncertain and multiple, and merely reproduced the objects clause — is the standard one, and it succeeded. The escape route the Tribunal allowed is evidential, not formal: what saves the accumulation is proof of what the money was in fact applied to within the period, produced when the officer asks for it. Read this alongside Bochasanwasi, where the Gujarat High Court accepted that an inadequate Form 10 was cured by a trustees' resolution and an explanation given during assessment.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee is a public charitable trust registered under s.12A since 20 May 1982, whose objects are to promote, advance and protect trade, commerce and industry in India, to disseminate statistical and commercial information, to publish material of trade interest, and to advance any other object of general public utility not involving the carrying on of any activity for profit. For AY 2016-17 it returned income of Rs.2,37,130 and accumulated Rs.8,00,000 under s.11(2), filing Form No. 10 with the return. The purpose stated in the Form was to 'hold seminars/workshops/conferences/buyers sellers meets/etc. to promote trade and develop knowledge', matching a resolution dated 19 July 2016. In the s.143(3) assessment dated 10 December 2018 the Assessing Officer held that the purpose was stated in a summarised and generalised manner, clubbing multiple objects together, that the purposes were revenue in nature, uncertain and multiple, and that no specific purpose had been identified; relying on the Delhi High Court in Bharat Kalyan Pratisthan v DIT (E) (2008) 299 ITR 406 he disallowed the accumulation and assessed income at Rs.10,37,126. The CIT(A) dismissed the appeal, holding that s.11(2) contemplates accumulation for a definite and concrete purpose rather than for the objects in a blanket manner, and noting the Assessing Officer's finding that the trust had not applied a single rupee to charitable purposes during the year while accumulating under s.11(2) year after year.
On perusal of the record including the trustees' resolution, the purpose for accumulation under s.11(2) had not been specified with the required clarity and precision, and the Tribunal found merit in the Departmental Representative's contention that the trust had failed distinctly to specify the purpose for which the funds were accumulated (paragraph 6). Because the assessee's representative said the funds had in fact been used for specific purposes within the stipulated time, and following the course taken by the Gujarat High Court in Bochasanwasi of setting the matter aside for fresh verification, the issue was restored to the Assessing Officer for de novo adjudication with directions to verify the utilisation of the Rs.8,00,000 and the specific purpose to which it was applied, the assessee to furnish a detailed explanation with supporting evidence and to be heard (paragraphs 6 and 7). The appeal was allowed for statistical purposes (paragraph 8).
The Tribunal accepted the Departmental Representative's submission that s.11(2) mandates a clear and specific purpose and that a general or vague description of objects will not do, and found on the record — including the resolution relied on by the assessee — that the requisite clarity and precision were absent, and that the assessee had not clearly demonstrated the specific purpose for which the accumulated funds were proposed to be utilised. It nonetheless declined to confirm the disallowance because the assessee asserted at the hearing that the funds had actually been utilised for specific purposes within the stipulated time, and because the Gujarat High Court's approach in Bochasanwasi — where the Revenue's objection to the sufficiency of the Form 10 declaration was accepted but the assessee's explanation and trustees' resolution given during the assessment were held to satisfy the requirement — pointed to verification rather than disallowance (paragraph 6).
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Handle my notice → Ask a CA on WhatsAppOn these facts the Tribunal agreed with him: a purpose stated as 'hold seminars/workshops/conferences/buyers sellers meets/etc. to promote trade and develop knowledge' was not specified with the required clarity and precision, and the trust had not demonstrated the specific purpose for which the accumulated funds were to be used. But the Tribunal did not tax the accumulation — following the Gujarat High Court in Bochasanwasi Shri Akshar Purushottam it restored the matter to the Assessing Officer to verify how the money was actually spent within the five years. This was decided by the ITAT (Om Prakash Kant AM and Anikesh Banerjee JM) and bears on section 11, section 11(2), section 12A, section 143(3), section 250 of the Income Tax Act 1961. It is reported as ITA No. 913/Mum/2026 (ITAT Mumbai 'H(SMC)' Bench). This is the Revenue's argument on Form 10 succeeding — though not the Revenue winning the appeal, which was allowed for statistical purposes — and it is the point most trusts get wrong: the disputes about lateness get all the attention, but a Form 10 filed perfectly on time can still fail on content. The Assessing Officer's objection here — that the purposes were revenue in nature, uncertain and multiple, and merely reproduced the objects clause — is the standard one, and it succeeded. The escape route the Tribunal allowed is evidential, not formal: what saves the accumulation is proof of what the money was in fact applied to within the period, produced when the officer asks for it. Read this alongside Bochasanwasi, where the Gujarat High Court accepted that an inadequate Form 10 was cured by a trustees' resolution and an explanation given during assessment. If it applies to you, the first step is this: Draft the purpose in Form 10 as a project, not as an objects clause — name the activity, the intended outlay and the period; a list of the trust's objects joined by an 'etc.' is what failed here.
The assessee is a public charitable trust registered under s.12A since 20 May 1982, whose objects are to promote, advance and protect trade, commerce and industry in India, to disseminate statistical and commercial information, to publish material of trade interest, and to advance any other object of general public utility not involving the carrying on of any activity for profit. For AY 2016-17 it returned income of Rs.2,37,130 and accumulated Rs.8,00,000 under s.11(2), filing Form No. 10 with the return. The purpose stated in the Form was to 'hold seminars/workshops/conferences/buyers sellers meets/etc. to promote trade and develop knowledge', matching a resolution dated 19 July 2016. In the s.143(3) assessment dated 10 December 2018 the Assessing Officer held that the purpose was stated in a summarised and generalised manner, clubbing multiple objects together, that the purposes were revenue in nature, uncertain and multiple, and that no specific purpose had been identified; relying on the Delhi High Court in Bharat Kalyan Pratisthan v DIT (E) (2008) 299 ITR 406 he disallowed the accumulation and assessed income at Rs.10,37,126. The CIT(A) dismissed the appeal, holding that s.11(2) contemplates accumulation for a definite and concrete purpose rather than for the objects in a blanket manner, and noting the Assessing Officer's finding that the trust had not applied a single rupee to charitable purposes during the year while accumulating under s.11(2) year after year. The matter was decided on 2026-04-09 by the ITAT (Om Prakash Kant AM and Anikesh Banerjee JM). On those facts the ITAT held as follows. On perusal of the record including the trustees' resolution, the purpose for accumulation under s.11(2) had not been specified with the required clarity and precision, and the Tribunal found merit in the Departmental Representative's contention that the trust had failed distinctly to specify the purpose for which the funds were accumulated (paragraph 6). Because the assessee's representative said the funds had in fact been used for specific purposes within the stipulated time, and following the course taken by the Gujarat High Court in Bochasanwasi of setting the matter aside for fresh verification, the issue was restored to the Assessing Officer for de novo adjudication with directions to verify the utilisation of the Rs.8,00,000 and the specific purpose to which it was applied, the assessee to furnish a detailed explanation with supporting evidence and to be heard (paragraphs 6 and 7). The appeal was allowed for statistical purposes (paragraph 8).
The Tribunal accepted the Departmental Representative's submission that s.11(2) mandates a clear and specific purpose and that a general or vague description of objects will not do, and found on the record — including the resolution relied on by the assessee — that the requisite clarity and precision were absent, and that the assessee had not clearly demonstrated the specific purpose for which the accumulated funds were proposed to be utilised. It nonetheless declined to confirm the disallowance because the assessee asserted at the hearing that the funds had actually been utilised for specific purposes within the stipulated time, and because the Gujarat High Court's approach in Bochasanwasi — where the Revenue's objection to the sufficiency of the Form 10 declaration was accepted but the assessee's explanation and trustees' resolution given during the assessment were held to satisfy the requirement — pointed to verification rather than disallowance (paragraph 6). The decision followed or applied CIT (E) v. Bochasanwasi Shri Akshar Purushottam Public Charitable Trust (2018) 409 ITR 591 (Gujarat) — relied on, and its course of setting aside for verification adopted; Bharat Kalyan Pratisthan v. DIT (E) (2008) 299 ITR 406 (Delhi) — relied on by the Assessing Officer for the proposition that specification of a definite object is mandatory.
It was decided by the ITAT on 2026-04-09 and is reported as ITA No. 913/Mum/2026 (ITAT Mumbai 'H(SMC)' Bench). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 11, section 11(2), section 12A, section 143(3), section 250, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. On perusal of the record including the trustees' resolution, the purpose for accumulation under s.11(2) had not been specified with the required clarity and precision, and the Tribunal found merit in the Departmental Representative's contention that the trust had failed distinctly to specify the purpose for which the funds were accumulated (paragraph 6). Because the assessee's representative said the funds had in fact been used for specific purposes within the stipulated time, and following the course taken by the Gujarat High Court in Bochasanwasi of setting the matter aside for fresh verification, the issue was restored to the Assessing Officer for de novo adjudication with directions to verify the utilisation of the Rs.8,00,000 and the specific purpose to which it was applied, the assessee to furnish a detailed explanation with supporting evidence and to be heard (paragraphs 6 and 7). The appeal was allowed for statistical purposes (paragraph 8). It arises in Charitable Trusts & Exemption and Capital Gains Exemptions matters, on section 11, section 11(2), section 12A, section 143(3), section 250 of the Income Tax Act 1961, and was decided by Om Prakash Kant AM and Anikesh Banerjee JM. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Pass a trustees' resolution before the s.139(1) due date recording that purpose in the same words as the Form, and keep it with the Form; the Tribunal looked for the resolution and found it did not cure the vagueness. If the Form is already vague, build the record of actual utilisation within the five-year period — vouchers, project accounts, year-by-year application — because that is what the remand will turn on. Cite CIT (E) v Bochasanwasi Shri Akshar Purushottam Public Charitable Trust (2018) 409 ITR 591 (Guj) for the proposition that inaccuracy or want of full declaration in the prescribed format is not by itself fatal where the purpose was in fact stated during the assessment. Expect the Revenue to point out, as it did here, that the trust applied nothing to charitable purposes in the year while accumulating year after year; have the application figures ready.
Searched for later treatment; none was found. That is not the same as a source affirming it. No later decision citing this order has been found, and nothing overruling, doubting or distinguishing it. No appeal to a High Court against it has been traced. The requirement that a Form 10 state a definite purpose of accumulation has not been revisited by any later Bench or High Court so far as anything found goes. This is an April 2026 order of the Mumbai Bench, so the silence reflects its age. Two things about its shape matter more than the absence of later treatment. First, the appeal was allowed for statistical purposes. Nothing is finally decided even between these parties: the matter went back to the Assessing Officer for de novo adjudication, with directions to verify the utilisation of the Rs.8,00,000 and the specific purpose to which it was applied, and the trust may lose again on that verification. So the order is authority for the proposition that a vague Form 10 fails, and authority for the proposition that a vague Form 10 does not by itself produce a charge; it is authority for no result. Second, the finding against the trust is a finding on the record before the Bench, including the trustees' resolution of 19 July 2016. A Form 10 describing a project with an outlay and a period would not be answered by this order at all. The escape route it allows is evidential: proof of what the money was in fact applied to within the five-year period, produced when the officer asks for it. Read it alongside CIT (E) v Bochasanwasi Shri Akshar Purushottam Public Charitable Trust (2018) 409 ITR 591 (Guj), which is the authority the Bench followed and which is the stronger citation of the two. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
WHY NO QUOTATION IS GIVEN. The wording of the key sentence at paragraph 6 is not firm. In one version it reads 'the purpose for accumulation of funds under section 11(2)' and in another the words 'IMC Trust' are inserted into it - 'the purpose for accumulation of IMC Trust funds under section 11(2)'. Because the two do not agree word for word, nothing from this order is set in quotation marks on this page. If the sentence is needed for a submission, take it from the Tribunal's own record. ON THE STRUCTURE. The order runs to eight numbered paragraphs. The finding is at paragraph 6, the directions on remand at paragraphs 6 and 7, and the disposal - the appeal allowed for statistical purposes - at paragraph 8. WHOSE WORDS ARE WHOSE. Long passages at paragraphs 4 and 5 are quotations: paragraph 4 from the Gujarat High Court in Bochasanwasi, paragraph 5 from the Commissioner (Appeals)' order. They are not the Tribunal's own words, and no locator inside them is cited on this page. A citation to 'paragraph 4' of this order is a citation to the Gujarat High Court. OTHER DEFECTS IN THE REPORT. The head of the order records the appeal as arising from an order under s.143(3) dated 10 December 2018 for assessment year 2016-17, while paragraph 7 speaks of 'the appeals', in the plural, and of legal grounds being left open in language that does not parse. Only one appeal was before the Bench. ON THE FORM 10 THAT FAILED, so that the standard can be seen. The purpose stated was to 'hold seminars/workshops/conferences/buyers sellers meets/etc. to promote trade and develop knowledge', and it matched a trustees' resolution of 19 July 2016. The Assessing Officer's objection was that the purpose was stated in a summarised and generalised manner, clubbing multiple objects together, that the purposes were revenue in nature, uncertain and multiple, and that no specific purpose had been identified. The Tribunal agreed. A resolution in the same words as the Form does not cure the Form; it repeats it. WHAT THE ORDER DOES NOT DECIDE. It does not decide that the accumulation is taxable; it does not decide whether the trust in fact applied the money within the five years, which is what the remand is for; and it says nothing about the timing of the Form 10, which was filed with the return and was never in issue. The whole of the dispute is about content. Note too what the Revenue pressed and the Tribunal did not rule on: that the trust applied nothing to charitable purposes in the year while accumulating year after year. That argument is on the record and will be made again on the remand. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
On perusal of the record including the trustees' resolution, the purpose for accumulation under s.11(2) had not been specified with the required clarity and precision, and the Tribunal found merit in the Departmental Representative's contention that the trust had failed distinctly to specify the purpose for which the funds were accumulated (paragraph 6). Because the assessee's representative said the funds had in fact been used for specific purposes within the stipulated time, and following the course taken by the Gujarat High Court in Bochasanwasi of setting the matter aside for fresh verification, the issue was restored to the Assessing Officer for de novo adjudication with directions to verify the utilisation of the Rs.8,00,000 and the specific purpose to which it was applied, the assessee to furnish a detailed explanation with supporting evidence and to be heard (paragraphs 6 and 7). The appeal was allowed for statistical purposes (paragraph 8).
TaxSphere, “IMC Trust v ITO (Exemption) Ward 1(3), Mumbai”, https://taxnotice.vittsphere.com/caselaw/case/imc-trust-form-10-must-state-a-definite-purpose-of-accumulation/ (validity last checked 2026-09-08)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
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My trust filed Form 10 only after the scrutiny notice came — 338 days after the due date. The Commissioner refused to condone under s.119(2)(b). Is that the end of the accumulation claim?
