COMMISSIONER OF INCOME-TAX VS DHARMOODAYARN CO.
2001 P T D 2527
[248 I T R 8161
[Supreme Court of India]
Present: S.P. Bhanwha, Doraiswamy Raju and Mrs. Ruma Pal, JJ
COMMISSIONER OF INCOME‑TAX
versus
DHARMODAYAM CO. (and another appeal)
Civil Appeals Nos.6083 with 6298 of 1997, decided on 21/11/2000.
(Civil Appeal No.6083 of 1997 is by special leave from the judgment and order, dated January 10, 1997, of the Kerala High Court in I.T.R. No. 42 of 1994).
(Civil Appeal No.6298 of 1997 is by special leave from the judgment and order, dated February 19, 1997, of the Kerala High Court in I. T. R. No. 22 of 1995).
Income‑tax‑‑‑
‑‑‑‑Charitable trust‑‑‑Exemption of income‑‑Business itself held on trust‑‑ New provision requiring conditions to be fulfilled applies‑‑‑Appellate Tribunal holding such trust need not satisfy new provision‑‑‑High Court‑ Reference‑‑‑Decision without due consideration of conditions‑‑‑Set aside‑‑ Matter remanded to Tribunal for fresh consideration‑‑‑Indian Income Tax Act, 1961, S.11(4A).
From the decisions of the High Court (see (1997) 225 ITR 686 and (1998) 233 ITR 250) upholding, on a reference, the decision of the Appellate Tribunal that, since the kury business carried on by the assessee itself was held under trust for carrying out the primary objects of the trust, it would not be hit by the provisions of section 11,(4A) of the Income Tax Act, 1961, requiring certain conditions to be fulfilled, the Department preferred appeals to the Supreme Court:
Held, that it was necessary for the Tribunal to determine whether the trust satisfied the requirements of section 11(4A).
The Supreme Court, accordingly, set aside the orders of the Tribunal and the High Court remanded the matters to the Tribunal for fresh consideration.
CIT v. Dharmodayam Co. (1997) 225 ITR 686 (Ker.) and CIT v. Dharmodayam Co. (1998) 233 ITR 250 (Ker.) set aside‑ and matters remanded to the Tribunal.
CIT v. Dharmodayam Co. (1997) 109 ITR,527 (SC),ref.
M.L. Verma, Senior. Advocate (K. Mirsaand Dhananjay Kr. Singh, Advocates with him).for Appellant.
V. U. Bradi and C.N. Sreekumat Advocates for Respondent.
ORDER
The assessment years here involved are 1984‑85 and 1985‑86. Until the introduction of section 11(4A) into the Income Tax Act, 1961 on April 1. 1984, the case of the assessee was governed by the decision of this Court in its own case (CIT v. Dharmodayam Co. (1977) 109 ITR 527). Section 11(4A) has introduced conditions in the application of sub sections (1), (2), (3) and (3A) of section 11. It does not appear that the Tribunal has applied its mind to these conditions and given findings of fact as to whether or not they are satisfied, Nor has the High Court given due consideration to this aspect. To be able to decide whether the assessee is entitled to the benefit of the exemption under section 11, it is necessary for the Tribunal to determine whether it satisfies the requirements of section 11(4A).
Accordingly, the orders of the High Court under challenge and the orders of the Tribunal from which the reference was made are set aside and the matters (I.T.A. No.681/Cock. of 1987 and I.T.A. No. 264/Cock. of 1989) are restored to the file of the income‑tax Appellate Tribunal, Cochin, to be considered afresh in the light of what has been stated above.
The appeals are allowed accordingly.
No orderas to costs.
M.B.A./967/FC Appeals allowed.