DIRECTOR OF INCOME TAX Vs. RAUNAQ EDUCATION FOUNDATION

JUDGEMENT

(1.) The Revenue is aggrieved by an order dated 6th January, 2006 passed by the Income Tax Appellate Tribunal, Delhi Bench A in ITA No.2590/Del/2002 relevant for the assessment year 1987-88 and ITA No.2591/Del/2002 relevant for the assessment year 1998-99.

(2.) The sole question that has arisen in this appeal is whether the Assessee who is entitled to exemption under Section 10(22) of the Income Tax Act, 1961 can claim the benefit thereof for the purpose of income deemed to be chargeable to tax under Section 68 of the Act. According to the Assessing Officer, the undisclosed income could not be exempted under Section 10(22) of the Act and the Commissioner of Income Tax (Appeals) upheld the view taken by the Assessing Officer. On further appeal, the Tribunal considered the provisions of Sections 4 and 5 of the Act read with Section 2(24) and 2(45) as well as Section 10(22) of the Act and came to the conclusion that the use of the word 'income' in sub- section (22) of Section 10 of the Act is wide enough to include deemed income under Section 68 of the Act.

(3.) Learned counsel for the Assessee has drawn our attention to Orissa State Warehousing Corporation vs. Commissioner of Income Tax (1999) 237 ITR 589 wherein the Supreme Court has interpreted Section 10(29) of the Act which uses the expression 'derived from' which expression is missing in Section 10(22) of the Act. The Supreme Court held that the expression 'derived from' is intended to give a restrictive meaning to the word 'income' as used in Section 10(29) of the Act and, therefore, proceeding on that basis, the Supreme Court decided against the assessee.