COMMISSIONER OF INCOME TAX vs. MAYUR FOUNDATION

ITR/97/1996HC GujaratGJHC24021777199630 August 2006Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE R.S.GARG3 pages
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What did the High Court hold?

The High Court held that the Appellate Tribunal was correct in law and on facts in allowing the benefits under Section 11(2) of the Income Tax Act, 1961, to the assessee. The Court's reasoning was based on its prior judgment in Commissioner of Income-Tax vs. Mayur Foundation, reported in (2005) 274 ITR 562. In that judgment, the Division Bench had affirmed the Tribunal's decision that the assessee was entitled to the benefits under Section 11(2) for Assessment Year 1980-81. Given that the present reference pertains to the same assessee and the identical issue for a subsequent year, the Court followed its earlier precedent. The ratio decidendi is that a consistent finding in favour of the assessee on the applicability of Section 11(2) for an earlier year, when affirmed by the High Court, should be applied to subsequent years for the same assessee, absent any distinguishing facts. The reference was answered against the Revenue. No costs were awarded.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'C', referred a question of law to the High Court of Gujarat concerning Assessment Year 1981-82. The reference arose from ITA No. 3107/Ahd/1991. The ITAT had relied on its prior decision in ITA No. 1825/Ahd/1987 for Assessment Year 1980-81, which also involved the same assessee, Mayur Foundation. The earlier matter had been referred to the High Court via Reference Application No. 471/Ahd/1991. A Division Bench of the High Court had previously decided this matter, reported in (2005) 274 ITR 562 (Commissioner of Income-Tax vs. Mayur Foundation), ruling in favour of the assessee.

What were the issues?

1. Whether, the Appellate Tribunal is right in law and on facts in holding that the assessee is entitled to the benefits allowable under Section-11(2) of the Act? (Question of law and fact, concerning Section 11(2) of the Income Tax Act, 1961). Assessee's Contention: The assessee, Mayur Foundation, is entitled to the benefits allowable under Section 11(2) of the Income Tax Act, 1961. This contention is supported by the High Court's prior judgment in a similar case for an earlier assessment year. Revenue's Contention: The judgment does not record specific arguments made by the Revenue in this reference. However, the reference itself indicates the Revenue is challenging the Tribunal's decision in favour of the assessee regarding the benefits under Section 11(2).

Which sections of the Income-tax Act were involved?

Section 11(2)

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ITR/97/1996 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE NO. 97 OF 1996 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG

HONOURABLE MR.JUSTICE M.R. SHAH ========================================================= 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 - Applicant(s) Versus MAYUR FOUNDATION - Respondent(s) ========================================================= Appearance : MRS. MONA BHATT for MR. MANISH R. BHATT for Applicant(s). MR. B.D. KARIA for Opponent(s). ========================================================= CORAM : HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE M.R. SHAH Date : 30/08/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.GARG) The In

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