COMMISSIONER OF INCOME TAX Vs. GULRAJ EDUCATIONAL TRUST

JUDGEMENT

(1.) BY these six different petitions, the CIT, Delhi VI, New Delhi, wants this Court to direct the Tribunal (for short "the Tribunal") to state the case and refer it to this Court for its decision. Since the contentions are common in all these petitions, these are being disposed of by a common order.

(2.) THE question of law stated to be arising out of the order of the Tribunal and sought to be referred is as under : "Whether, on the facts and in the circumstances of the case as well as in law, the Tribunal was justified in allowing exemption under S. 11 of the IT Act though there were infringements of S. 13 (1)(a) of the Act ?

(3.) THE ITO found that the assessee made deposits and investments in concerns in which persons specified in sub -s. (3) of S. 13 of the Act were substantially interested. He also found that neither the interest was adequate nor the deposits were secured as required under S. 13(2)(a) of the Act. The contention of the assessee that the provisions of S. 13(2)(a) and S. 13(2)(h) of the Act were not applicable as the deposits and investments were made prior to June 1, 1970, was not found acceptable. The assessee had relied upon the second proviso to cl. (c) of S. 13(1) of the Act. Under this proviso, benefit derived by persons referred to under sub -s. (3) of S. 13 prior to June 1, 1970, in the case of charitable trusts created before the commencement of the Act was saved from denying exemption under S. 11 of the Act.