COMMISSIONER OF INCOME TAX vs. LEUVA PATEL KELWANI MANDAL

ITR/115/1987HC GujaratGJHC24011848198703 September 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court, while acknowledging the Tribunal's decision that the assessee trust was entitled to exemption, based its own opinion on Explanation 2 to Section 13 of the Act. This Explanation states that a trust or institution created for the benefit of scheduled castes, backward classes, scheduled tribes, or women and children shall not be deemed to be established for the benefit of a religious community or caste within the meaning of Section 13(1)(b). The Court found it unnecessary to delve into whether the Tribunal's finding that the institution was not for the benefit of a particular community or caste was correct. Since the main object was to build hostels for girls, and Explanation 2 to Section 13 provides that such institutions are not for the benefit of a particular community or caste, the exemption was upheld. The Court answered the referred question in favour of the assessee, without expressing an opinion on the correctness of the Tribunal's finding regarding the specific community.

What were the facts?

The assessee, Leuva Patel Kelwani Mandal, is a trust whose main object is to build hostels for girls of the Leuva Patel community. For the assessment year 1982-83, the assessee claimed exemption under Sections 11 and 12 of the Income Tax Act, 1961, asserting it was not created for the benefit of any particular religious community or caste. The Assessing Officer rejected this claim, holding that the assessee's case fell under Section 13(1)(b) of the Act. The Appellate Assessment Commissioner and the Income Tax Appellate Tribunal (ITAT) ruled in favour of the assessee, following a prior ITAT decision. The Revenue has filed a reference before the High Court.

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 Section 13(1)(b) of the Income-tax Act, 1961, were not applicable and the assessee trust was entitled to exemption as claimed? Assessee's Contention: The assessee claimed exemption under Sections 11 and 12 of the Act, arguing it was not created for the benefit of any particular religious community or caste. (Implied by the Tribunal's favourable decision). Revenue's Contention: The Revenue contended that the assessee's case was covered by Section 13(1)(b) of the Act, thus disentitling it to exemption. (Stated in the facts and reflected in the referred question).

Which sections of the Income-tax Act were involved?

Section 13(1)(b),Section 11,Section 12

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 115 of 1987

For Approval and Signature:

Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO -----------------------------

The order continues below.

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