COMMISSIONER OF INCOME TAX vs. SORABJI NASARWANJI PARUCK

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ITR/404/1983HC GujaratGJHC24011870198303 December 1996Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE R.BALIA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court answered the referred question in the negative, in favour of the revenue and against the assessee. The reasoning was based on a prior Division Bench decision of the same High Court in CIT vs. Sorabji Nusserwanji Parekh (201 ITR 939). In that case, for assessment year 1972-73, the Court had held that a trust created to establish schools or colleges for Zoroastrian students, which had not successfully established any such institution or carried on educational activity in the sense of imparting knowledge, and was merely giving scholarships without control or actual imparting of learning, was not entitled to total exemption under Section 10(22). The present case, concerning assessment years 1975-76 and 1976-77, involved an identical question and facts, leading to the same conclusion. The reference was disposed of accordingly.

What were the facts?

This case involves an Income Tax Reference before the High Court of Gujarat. The Commissioner of Income Tax is the petitioner, and Sorabji Nasarwanji Paruck is the respondent. The reference concerns assessment years 1975-76 and 1976-77. The core of the matter is whether the assessee's income was entitled to exemption under Section 10(22) of the Income Tax Act, 1961. The High Court noted that the question was directly covered by its own prior decision in the assessee's own case, CIT vs. Sorabji Nusserwanji Parekh (201 ITR 939), which dealt with assessment year 1972-73 and an identical question.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the income of the assessee was entitled to exemption under subsection (22) of Section 10 of the Income Tax Act, 1961? Assessee's Contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the reference itself implies the assessee argued for exemption under Section 10(22). Revenue's Contentions: The judgment does not record any specific contentions made by the revenue before the High Court. However, the reference implies the revenue argued against the exemption.

Which sections of the Income-tax Act were involved?

Section 10(22),Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 404 of 1983

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question 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?

-------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus SORABJI NASARWANJI PARUCK -------------------------------------------------------------- Appearance: MR MANISH R BHATT for Petitioner MRS KETTY A MEHTA for Respondent No. 1

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

CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. Date of decision: 03/12/96

ORAL JUDGEMENT (per R.K. Abichandani, J)

1.

The following question has been referred for the opinion of this Court under Section 256(1) of the Income Tax Act:

1.

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the income of the assessee was entitled to exemption under subsection (22) of Section 10 of the Income Tax Act, 1961?"

2.

The question is directly covered in assessee's 1972-73 (the present case is for assessment years 1975-76 and 1976-77), while answering the identical question referred to it, the High Court held that the assessee trust was created to establish schools or colleges for imparting education to Zoroastrian students but it had not been successfully establishing any school or college, and no educational activity in the sense of normal schooling or actual imparting of knowledge or learning to the students was carried on by the trust. The institution was simply giving scholarships to the needy Parsi students for technical education without keeping any control over such students or without actually imparting any knowledge to them, therefore, the assessee trust was not entitled to total exemption from income tax under Section 10(22) of the Act. In this view of the matter, the question referred to us is answered in the negative in favour of the revenue and against the assessee. The reference stands disposed of accordingly.

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