The High Court of\nPunjab and Haryana has come to a critical verdict regarding the accumulation of\naccount done by the specific society. The honourable courts have mentioned that\nif the threshold of the amount accumulation surpassed 15% figure, then it\nshould utilize for a particular purpose rather than future aim or objects.<\/p>\n\n\n\n
The moto of the society\nis to build a sense of nationality and patriotism among the citizens, to\nprotect the war history of Punjab. For the assessment year 2014-15, society\ngathered a certain sum of money. It then transferred to Punjab State War Heroes\nMemorial & Museum Society, Amritsar (PSWHMMS), which is not working as per\nthe provision of the Government of Punjab. <\/p>\n\n\n\n
When the society comes\nunder the radar of the tax authority, the amount then transferred to the Punjab\nState War Heroes Memorial & Museum Society. The society was claiming this\ntransfer as a part of their income. <\/p>\n\n\n\n
During the assessment of this scenario, the assessing officer comes to an interesting finding regarding this monetary transfer. During the scrutiny process, the accessing officer concludes that this transfer is a clear-cut violation of section 11(2) and 11(3)(d) of the Income Tax Act<\/em><\/strong>[1]<\/em><\/strong><\/a><\/sup>. <\/p>\n\n\n\n In the second appeal,\nthe Tribunal supported the observation, and therefore, the assessee-society\naddressed the High Court for judicial assistance. <\/p>\n\n\n\n Furthermore, the\ndivision bench of the high court rejected the charges of the assessee based on\nthe following facts:<\/p>\n\n\n\n However, subsection (2)\nprovides a bit of relief in this aspect. The subsection supports the\naccumulation out of 85%, but it is only allowed for future projects that seek\nmore significant monetary help. <\/p>\n\n\n\n The court supported the lower authorities’ order and observed that the accumulated amount could be considered as an income of the assessee because the accumulation has to be for a specific purpose and not for the aims and objects of the trust.<\/p>\n\n\n\n Read our article<\/b>:Types of ITR (Income Tax Returns)<\/a><\/mark><\/p>\n\n\n\n Any income obtained\nfrom the property contained under religious purposes or trust for charitable\nshall not deem as a part of the total income as per the provisions under\nsection 60 to 63 for clubbing of income. <\/p>\n\n\n\nProvision under the Income Tax Act, section 11 regarding the accumulation of the income by the society<\/h2>\n\n\n\n