COMMISSIONER OF INCOME TAX Vs. VENU NIDHI

JUDGEMENT

(1.) AT the instance of the Revenue, the following question of law is referred to this court for its opinion :

(2.) THE assessee has claimed exemption under Section 11 of the Act. The Income -tax Officer, however, denied such exemption to the assessee on the ground that the provisions of Section 13(2)(h) of the Act were applicable to it. Further, the Income -tax Officer took an adverse inference against the assessee as he was of the view that the assessee had not filed the audit report as contemplated under Section 12A(b) of the Act, within the prescribed time. In appeal, the Appellate Assistant Commissioner held that the provisions of Section 13(2)(h) were not applicable in the assessee's case. He further held that the default if at all in filing the audit report was a 'technical lapse'. He, therefore, held that the Income -tax Officer was not justified in denying the benefit of exemption under Section 11 of the Act.

(3.) WHILE disposing of the appeal by the Tribunal, a reference was made to the Tribunal's own decision in the case of Ambalal Sarabhai Trust No. 19 (I. T. A. No. 595 (Ahd.) of 1980, dated January 28, 1981) and the Tribunal has taken the view that the provisions of Section 13(2)(h) of the Act were not applicable and the assessee was, therefore, entitled to exemption under Section 11 of the Act. The said issue was taken by the Revenue in reference before this court and while deciding the said reference this court has referred to and relied on its earlier decision in the case of CIT v. Insaniyat Trust : [1988]173ITR248(Guj) , wherein, after elaborately discussing the provisions contained in Sections 11 and 13 of the Income -tax Act, 1961, this court had come to the conclusion that the provisions of Section 13(2)(h) are not applicable and the assessee was entitled to the exemption under Section 11 of the Act. The facts of the present case are similar to the facts of the Insaniyat Trust's case : [1988]173ITR248(Guj) and other similar matters. We follow the decision taken by this court in the above judgments. Accordingly, we answer the question referred to us partly in the negative and partly in the affirmative. However, it is in favour of the assessee and against the Revenue.