1981-VIL-19-SC-DT

Equivalent Citation: [1983] 140 ITR 1 (SC), 1982 AIR 32, 1982 (2) SCC 542

Supreme Court of India

Date: 07.04.1981

COMMISSIONER OF INCOME-TAX, GUJARAT III

Vs

AHMEDABAD RANA CASTE ASSOCIATION

BENCH

Judge(s)  : E. S. VENKATARAMAIAH. and R. S. PATHAK.

JUDGMENT

The judgment of the court was delivered by

PATHAK J.-These appeals by certificate granted by the High Court of Gujarat are directed against the judgment of the High Court delivered on June 29/30, 1972, on the application of s. 4(3)(i) of the Indian I.T. Act, 1922, and s. 11 of the I.T. Act, 1961.

The assessment years involved are 1960-61, 1961-62 and 1962-63 (the corresponding accounting periods being the financial years ending March 31, 1960, March 31, 1961, and March 31, 1962 respectively). The ITO held that the respondent was not entitled to the benefit under s. 4(3)(i) of the Act of 1922 in respect of the first two assessment years and under s. 11 for the assessment year 1962-63. The ITO proceeded on the view that the objects for which the respondent association was constituted contained certain clauses which permitted the respondent to apply the income to purposes which were not wholly charitable. The AAC maintained the order of the ITO. But the Income-tax Appellate Tribunal took an entirely contrary view and held that the respondent was entitled to the exemption claimed by it. Upon a reference made at the instance of the Commissioner of Income-tax, Gujarat, the Appellate Tribunal referred the following question for the opinion of the High Court :

" Whether, on the facts and in the circumstances of the case, the income of the assessee-trust is exempt under s. 4(3)(i) of the Indian I.T. Act, 1922, and s. 11 of the I.T. Act, 1961 ?" Before the High Court the controversy centred around sub-cls. (4) and (5) of cl. 3 of the memorandum of association of the respondent-association as well as sub-cl. (4) of cl. 8. The High Court after considering the entire matter at length in the light of the prevailing case law has found that the objects sufficiently control the application of the income derived by the respondent-association to purposes which can be described as entirely religious and charitable. After hearing the learned counsel for the parties we see no reason for interfering with the judgment of the High Court. The appeals are dismissed. Costs in one set.

Appeals dismissed.

 

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