COMMISSIONER OF INCOME-TAX Vs. KAMLA TOWN TRUST

JUDGEMENT

(1.) This reference under Section 256(1) of the Income-tax Act, 1961, has been made by the Appellate Tribunal at the instance of the Commissioner of Income-tax, Kanpur, and the following questions have been referred for the opinion of this court :

(2.) The assessee is a trust which derives income from property, interest and share income from a firm, Messrs. J.K., Calcutta. It had claimed exemption under Section 11(1)(a) of the Income-tax Act, 1961. The Income-tax Officer did not allow the exemption claimed by the assessee. Therefore, the assessee went in appeal and the Appellate Assistant Commissioner held through his order dated September 8, 1972, that the assessee was a charitable trust. Therefore, the provisions of Section 11(1)(a) of the Income-tax Act, 1961, were attracted subject to the conditions mentioned therein.

(3.) In pursuance of the order of the Appellate Assistant Commissioner, the Income-tax Officer, through his order dated July 27, 1973, determined the income of the assessee-trust at Rs. 2,17,621. He gave exemption to the tune of Rs. 10,000 only under Section 11(1)(a) and included the rest of the income as taxable income on the ground that the same had not been applied to charitable purposes. The income so computed included the share income of Rs. 2,05,150 derived from the firm, Messrs. J.K., Calcutta. Aggrieved by the order of the Income-tax Officer, the assessee went in appeal and contended that the original order of the Appellate Assistant Commissioner had not been properly implemented by the Income-tax Officer. It was further contended that the income of the trust had been attached by the Tax Recovery Officer, vide his order dated September 30, 1967. Therefore, the assessee had not physically received any income so as to satisfy the provisions of Section 11(1)(a) of the Income-tax Act, 1961. The Appellate Assistant Commissioner dismissed the appeal holding that the Income-tax Officer had properly implemented the order of remand and the arguments raised on behalf of the assessee raised fresh grounds which could not be entertained.