COMMISSIONER OF INCOME TAX Vs. KRISHNA WARRIER P

JUDGEMENT

(1.) ON the application of the Commissioner of Income-tax, the Income-tax Appellate Tribunal, Madras Bench " B ", drew up a statement of the case and have referred the following questions for our decision.

(2.) THIS reference is a composite one and relates to income-tax of the income of an institution known as the Arya Vaidya Sala for the two assessment years 1962-63 and 1963-64. To understand the contentions urged on behalf of the revenue at whose instance this reference has been made and those of counsel for the assessee, it is necessary to refer to a few facts.

(3.) THE liability to income-tax of the 60% of the profit of Arya Vaidya Sala made up of the 25% set apart for the Arya Vaidya Sala itself, 25% for the Arya Vaidya Hospital and 10% for Arya Vaidya Pata Sala arose in relation to the assessment years 1952-53, 1953-54, 1954-55, 1955-56 and 1956-57. This court held that the above 60% is not liable to be taxed and this view has been affirmed by the Supreme Court in the decision in Commissioner of Income-tax v. P. Krishna Warrier, [1964] 53 I.T.R: 176 ; [1964] 8 S.C.R. 36 (S.C.). This decision was rendered under the Indian Income-tax Act, 1922. THE definition of " charitable purpose " has been altered by the Income-tax Act, 1961, and the present definition is contained in Section 2(15) of that Act reading as follows: