COMMISSIONER OF INCOME TAX vs. VISHWAKARMA KELWANI MANDAL

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ITR/261/1985HC GujaratGJHC24012390198514 June 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
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What did the High Court hold?

The High Court decided both referred questions. For the first question, the Court held in the affirmative, meaning it agreed with the Tribunal that Section 13(1)(b) was not applicable and the assessee trust was entitled to the claimed exemption. For the second question, the Court held in the negative, finding that the assessee trust was not created for the exclusive benefit of a particular religious community (Gurjar Suthar Community or Caste) and therefore did not forfeit exemption under Section 11(1) due to Section 13(1)(b). The reasoning for both decisions was based on the High Court's prior judgments in I.T.R. No. 195/80 and I.T.R. No. 281/82, which were respectfully agreed with. The ratio decidendi is that if a trust's benefit is not restricted to a specific community in a manner that violates Section 13(1)(b), and if previous High Court judgments on similar facts concerning the same assessee have been decided in favour of the assessee regarding the applicability of Section 13(1)(b), then those decisions should be followed. The reference was disposed of accordingly, with no order as to costs.

What were the facts?

This case involves an Income Tax Reference filed by the revenue (Commissioner of Income Tax) against the assessee, Vishwakarma Kelwani Mandal. The reference was made at the instance of the revenue to the High Court of Gujarat at Ahmedabad for its opinion on two questions of law. The Income Tax Appellate Tribunal, Ahmedabad Bench 'A', had previously passed an order or taken a decision that is implicitly under challenge. The procedural history indicates that the revenue sought a reference under Section 256(1) of the Income-tax Act, 1961, and the High Court is now opining on the referred questions. The assessee was duly served but did not appear.

What were the issues?

The Tribunal had to decide two questions of law referred by the revenue: 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? 2. Whether the assessee trust was created for the benefit of a particular religious community designated as the "Gurjar Suthar Community or Caste" and therefore forfeited exemption under Section 11(1) due to Section 13(1)(b) of the Income-tax Act, 1961? Contentions: Revenue: The revenue, through its learned advocate Shri B.B. Naik, submitted that the first question had already been answered by the High Court in previous cases involving the same assessee (I.T.R. No. 195/80 and I.T.R. No. 281/82). The revenue implicitly argued that the previous decisions should be followed. Assessee: No arguments were recorded for the assessee as nobody appeared on their behalf, despite being duly served.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 261 of 1985

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE 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 -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus VISHWAKARMA KELWANI MANDAL -------------------------------------------------------------- Appearance: MR BB NAIK for MR MANISH R BHATT for Petitioner NOTICE SERVED for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA

Date of decision: 14/06/2001

ORAL JUDGEMENT (Per : MR.JUSTICE A.R.DAVE)

At the instance of the revenue, the following two questions have been referred to this court for its opinion under the provisions of sec. 256(1) of the Income-tax Act, 1961 by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A'.

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 Income-tax Act, 1061 were not applicable and the assessee trust was entitled to exemption as claimed?

2.

Whether the assessee trust was created for the benefit of a particular religious community who are designated as the "Gurjar Suthar Community or Caste" and therefore, it forfeited the exemption available under sec. 11(1) on account of the provisions of sec. 13(1)(b) of the Income-tax Act, 1961?

2.

Learned advocate Shri B.B. Naik has appeared for the applicant-revenue whereas nobody has appeared for the respondent-assessee though the respondent assessee has been duly served.

3.

Learned advocate Shri Naik has submitted that the first question has already been answered by this Court in case of the assessee itself in I.T.R. No. 195/80 as well as in I.T.R. No. 281/82. 4. This Court has decided the said question in the affirmative i.e. against the revenue and in favour of the assessee.

5.

In view of the ITRs referred to hereinabove and in respectful agreement with the said judgments, we answer the first question in the affirmative and the second question in the nagative i.e. in favour of the assessee and against the revenue.

The reference stands disposed of accordingly with no order as to costs.

(A.R. Dave, J.)

(D.A. Mehta, J.)

(hn)

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