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Judgment
The Income Tax Appellate Tribunal, Allahabad has referred the following question of law u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act), for opinion to this court:
"Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the provisions of section 13 are not applicable in this case and that the assessee-trust is entitled to exemption u/s 11 of the Income Tax Act, 1961 ?"
Briefly stated the facts giving rise to the present reference are as follows:
The present reference relates to the assessment year 1979-80. The respondent-assessee is a trust and it claimed exemption in respect of its income u/s 11 of the Act which was not granted by the Income Tax Officer on the ground that it had advanced moneys to the firm M/s. J.K. Bankers on interest at the rate of 9.5 per cent per annum. The Income Tax Officer found that the respondent-assessee had received a total amount of Rs. 76,741 by way of rent, interest and other miscellaneous receipts as against the expenses in Puja, Bhog, establishment, building repairs and general charges were only Rs. 13,563. He denied exemption to the trust u/s 11 of the Act on the ground that it was hit by provisions of section 13(2)(a) of the Act in the previous year. Following the past history, the Income Tax Officer refused exemption claimed by the respondent-assessee in the assessment year in question. In the appeal preferred before the Appellate Assistant Commissioner it granted exemption to the respondent-assessee following the order of the Income Tax Appellate Tribunal. The revenue''s appeal before the Tribunal has failed.
We have heard Sri A.N. Mahajan, learned standing counsel for the revenue and find that similar question came up for consideration for the assessment years 1975-76 and 1976-77 before this court in CIT v. Shri Baldeoji Maharaj 1996 UPTC 72. This court had held that the Tribunal was right in holding that the provisions of section 13 of the Act are not applicable in the case and the trust was entitled to exemption under sections 11 and 12 of the Act.
Respectfully following the aforesaid decision of this court, we answer the above question in the affirmative, i.e., in favour of the assessee and against the revenue. However, there shall be no order as to costs.