Fund created - ngo
Querist :
Anonymous
(Querist) 05 December 2011
This query is : Resolved
Dear Friends,
An NGO created a Building Fund 5 years ago, confirming the Income Tax Authorities that the amount will be utilised for the purpose within 5 years. However, the amount is still not utilised after expiry of 5 years. What should be done in this respect?
Thanks & Regards,
Gaurav
A V Vishal
(Expert) 05 December 2011
Income accumulated or set apart u/s 11(2) for attainment of specific purposes has to be used for the specified purposes within the period of accumulation etc. The infringement of the conditions of accumulation can occur on any or all of the following grounds:-
(i) it is applied to purposes other than charitable or religious purposes,
(ii) It is ceases to remain invested in the manner specified u/s 11(5),
(iii) It is not applied for the purposes for which it was accumulated, or
(iv) It is credited or paid to any religious or charitable.
In the occurrence of any of the aforesaid infringement, the amount will be taken as the income of the previous year in which the infringement has taken place. It may happen that any assessee is unable to apply
accumulated income for the purposes for which it was accumulated because of reasons beyond his control. In such a situation, section 11(3A)allows the assessee to make an application to the assessing officer requesting for change of purpose(s) for application of income. Upon such application, the A.O. may allow the change if the substituted purposes are
in conformity with the objects of the charitable trust or institution. However,
transfer of income to another charitable trust will not be allowed under this provision.
