COMMISSIONER OF INCOME-TAX vs. SARDA AND SARDA (C.A.)

ITR/8/1999HC GujaratGJHC24025166199904 September 2006Author: HONOURABLE MR. JUSTICE D.H.WAGHELA,HONOURABLE MR. JUSTICE R.S.GARG3 pages
AI SummaryDismissed

What were the facts?

The Commissioner of Income-tax, Rajkot (Revenue) has filed an Income Tax Reference before the High Court of Gujarat at Ahmedabad. The reference arises from an order of the Income-Tax Appellate Tribunal, Ahmedabad Bench “C”, in relation to I.T.A. No.118/Ahd/1984 for Assessment Year 1980-81. The Assessing Officer denied exemption under Section 11 of the Income Tax Act, 1961, to the assessee trust, Shri Manavadar Patel Samaj, Jamnagar, citing Section 13(1)(b) as the trust was created after April 1, 1962, for the benefit of a particular community or caste. This was upheld by the Assistant Commissioner of Income-Tax on October 19, 1988. The assessee appealed to the Tribunal, which held Section 13(1)(b) inapplicable, relying on its earlier decision in Leuva Patel Nutan Kelwani Mandal.

What did the High Court hold?

The High Court held that the provisions of Section 13(1)(b) of the Income Tax Act, 1961, were not applicable to the assessee trust. Consequently, the trust was entitled to the benefits flowing from Section 11 of the Act. This decision was based on the Tribunal's earlier judgment in the matter of Leuva Patel Nutan Kelwani Mandal, which was subsequently upheld by a Division Bench of the High Court in I.T.R. No. 109 of 1988 vide its judgment dated August 29, 2002. The learned counsel for the Revenue was unable to present any arguments contrary to these established judgments. The question referred to the Court was answered against the interest of the Revenue. The Reference was disposed of.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the provisions of sec.13(1)(b) of the I.T. Act, 1961 were not applicable and the assessee trust was entitled to exemption as claimed? Assessee's Contention: The assessee trust argued that Section 13(1)(b) was not applicable and it was entitled to exemption under Section 11. The Tribunal, in its order, found in favour of the assessee. Revenue's Contention: The Revenue contended that the trust was created after April 1, 1962, for the benefit of a particular community or caste, thus disentitling it to exemption under Section 11 due to the bar in Section 13(1)(b). The Assessing Officer and Assistant Commissioner upheld this view.

Which sections of the Income-tax Act were involved?

Section 13(1)(b),Section 11,Section 256(1)

AI-generated summary — verify with the full judgment below

ITR/8/1999 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE NO. 8 OF 1999 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG HONOURABLE MR.JUSTICE D.H.WAGHELA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the Civil Judge? ========================================================= COMMISSIONER OF INCOME-TAX, RAJKOT - Applicant(s)

Versus SHRI MANAVADAR PATEL SAMAJ, JAMNAGAR - Opponent(s) ========================================================= Appearance : MR. MANISH R. BHATT for Applicant(s). NONE for Opponent(s) though served. ========================================================= CORAM : HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE D.H.WAGHELA Date : 04/09/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.

The order continues below.

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