COMMISSIONER OF INCOME TAX Vs. RAMNIWAS KARWA

JUDGEMENT

(1.) AT the instance of the CIT, the following question of law has been referred by the Tribunal, Gauhati Bench, under S. 256(1) of the IT Act, 1961, hereinafter referred to as "the Act" :

(2.) THE assessee is an HUF and the reference relates to the asst. year 1967 -68. During the previous year relevant to this assessment year, the assessee made an initial gift of Rs. 21,000 for the purpose of founding the trust, Ramchandra Karwa Charitable Trust. During the course of the assessment proceedings, the assessee claimed exemption under S. 88 of the Act on this sum of Rs. 21,000 as donation given to the fund. But the ITO did not allow the claim of exemption.

(3.) THE assessee thereafter preferred an appeal before the Tribunal against the order of the AAC. The Tribunal held that relief under S. 88 was admissible also on the initial donation made for the purpose of starting or founding a fund or institution. The Tribunal, therefore, directed that relief under S. 88 of the Act should be allowed on the amount of Rs. 21,000 given to Ramchandra Karwa Charitable Trust provided it was found that Ramchandra Karwa Charitable Trust fulfilled the various conditions laid down in sub -s. (5) of S. 88 of the Act. On the above facts, the above -mentioned question of law has been referred.