The provision of a time element in Form No. 10 of the Income-tax Rules is beyond the provisions of S.11 and R.17, and investments made after the expiry of the prescribed period should be considered for the purpose of S.11(2) of the Income-tax Act.

1. These are references by the Income-tax Appellate Tribunal, Cochin Bench, under S.256(1) of the Income-tax Act, 1961, sent up at the instance of the Revenue. The two references arise out of an appeal filed to the Tribunal by the Revenue and a cross-objection preferred to it by the assessee. Both related to the assessment year 1971-72. The assessee, Shree Padma-nabhaswami Temple Trust, Trivandrum, is the charitable and religious trust. The previous year is the year ended 31-3-1971. The controversy revolves round the question whether the Trust whose objects are admittedly charitable within the meaning of S.2(15) of the Act, was entitled to the exemption conferred by S.11 of the Income-tax Act, as it stood at the relevant time. The material part of the Section as it stood at the relevant time read as follows:

"(2) Where any income referred to in clause (a) or clause (b) of sub-section (1) read with 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 finally set apart, for application to such purposes in India, such income 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 Income-tax Officer 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

(i) invested in any Government security as defined in clause (2) of S.2 of the Public Debt Act, 1944 (18 of 1944), or in any other security which may be approved by the Central Government in this behalf, or Office (Time Deposits) Rules, 1970) or a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in S.51 of that Act) or a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank), or

(iii) deposited in an account with a financial corporation which is engaged in providing long-term finance for industrial development in India and which is approved by the Central Government for the purposes of clause (viii) of sub-section (1) of S.M."

This Section allows certain income to be not included in the total income of the previous year subject to certain conditions being satisfied. One of the conditions is that the assessee specifies by notice in writing to the Income-tax Officer "in the prescribed manner" the purpose for which the income is being accumulated and the period for which the income is to be accumulated. By definition the expression "prescribed" means prescribed by Rules. That should turn our attention to the relevant Rule, which is R.17. That Rule reads:

"Notice for accumulation of income by charitable or religious trusts. The notice to be given to the Income-tax Officer under sub-section (2) of S.11 shall be in Form No. 10 and shall be delivered to him before the expiry of the time allowed under sub-section (1), or sub-section (2) of S.139, whether fixed originally or on extension, for furnishing the return of income."

And Form No. 10 which is referred to in the said rule contains the following provisions: Form No. 10

(see R.17)

Notice to the Income-tax Officer under S.11 (2) of the Income-tax Act, 1961.

To

The Income-tax Officer.

I on behalf of (name of the trust), hereby bring to your notice that it has been decided by a resolution passed by the trustees on (date) (copy enclosed) that, out of the income of the trust for the previous year (s) relevant to the assessment year 19 19 and subsequent previous year (s), an amount of Rs/ per cent of the income of the trust/such sum as is available at the end of the previous yea