COMMISSIONER OF INCOME TAX Vs. SHERVANI CHARITABLE TRUST

JUDGEMENT

(1.) THE Tribunal, Delhi Bench, New Delhi has referred the following questions of law under s. 256(1) of the IT Act, 1961 (the Act), for opinion to this Court :

(2.) THE reference relates to the years 1977 -78, 1978 -79 and 1981 -82.

(3.) BRIEFLY stated the facts giving rise to the present reference are as follows : The assessment orders for the asst. yrs. 1977 -78 and 1978 -79 are fresh assessment orders after the original assessment orders were set aside by the then CIT(A) with the direction to consider the judgment of the Settlement Commission under s. 245D(4) for the asst. yrs. 1967 -68 to 1970 -71 and 1972 -73 to 1976 -77. These orders were passed passed fresh assessment orders holding that the income was not so exempt on the ground that a Special Leave Petition had been filed before the Hon'ble Supreme Court against the judgment of the Settlement Commission. The assessment for the asst. yr. 1981 -82 is an original assessment, where the income has been held to be taxable and not exempt as a public charitable trust for the same reasons as for asst. yrs. 1977 -78 and 1978 -79. The CIT(A), after considering the facts and circumstances of the case, held that the provisions of s. 13(2)(b) were not applicable and the assessee cannot be denied exemption under ss. 11 and 12 due to this reason. As regards asst. yrs. 1977 -78 and 1978 -79, the CIT(A) found that his predecessor has set aside the assessment orders for the above years and directed the ITO to take into consideration the judgment of the Settlement Commission and thus limited the scope of enquiry by the ITO. The CIT(A), therefore, held that the ITO was not authorised to raise the issue of applicability of s. 13(2)(b) in the fresh assessments for these two years. He, accordingly, annulled the finding of the ITO in this regard.