Director of Income Tax vs Sarla Education Trust

This is an application u/s 256(2) of the income tax Act, 1961 (�the Act�) arising out of the assessment years 1982-83 to 1986-87 seeking a mandamus to the Tribunal for drawing up a statement of case and referring the following question of law (for all the five years of assessment) for the opinion of the higher court :

"On the facts and in the circumstances of the case, whether the Tribunal was right in law in holding that the income of the assessee-trust was exempt u/s 10(22) of the income tax Act, 1961 as against the Assessing Officer holding that the income was exempt u/s 11 of the said Act."

The Tribunal has (vide para 10 of its appellate order dated 30-6-1993) arrived at a finding of fact that the assessee-trust was �solely and wholly� involved in activities which fall under the head �Education� and on that finding, the Tribunal has held the assessee-trust entitled to the benefit of section 10(22) of the Act. A perusal of the order of the Tribunal shows that all the documents brought on record and relevant for the purpose of recording the abovesaid finding were taken into consideration. The finding is purely one of facts.

It is submitted by the learned counsel for the department that interpretation of documents is a question of law and inasmuch as from a reading of the objects set out in the deed of trust an inference as to the same being an educational trust has been drawn, the question is certainly one of law inasmuch as after reading the objects as set out in the deed of trust and interpreting the same, the Court may arrive at a different finding.

We are not impressed with the submission. It is true that the interpretation of document is a question of law but then the finding as recorded by the Tribunal is based on a total reading of the documents and we do not find the Tribunal having committed any error of any nature whatsoever while interpreting several clauses of the deed of trust and other documents showing the activities actually carried out by the trust during the assessment years in question. Secondly, the question as suggested by the department does not lay any challenge to the finding of fact arrived at by the Tribunal. The question as framed by the department is itself founded on �on the facts and in the circumstances of the case�, meaning thereby that no challenge has been laid to the finding of fact arrived at by the Tribunal. In Karnani Properties Ltd. Vs. The Commissioner of Income Tax, West Bengal, their Lordships of the Supreme Court have held :

"When the question referred to the High Court speaks of �on the facts and in the circumstances of the case�, it means on the facts and circumstances found by the Tribunal and not facts and circumstances that may be found by the High Court on a reappraisal of the evidence. In the absence of a question whether the findings were vitiated for any reason being before the High Court, the High Court has no jurisdiction to go behind or question the statements of fact made by the Tribunal." (p. 540)

For the foregoing reasons, we are of the opinion that the question as suggested by the department does not arise as a question of law from the order of the Tribunal. The Tribunal in our opinion did not err in rejecting the application filed by the petitioner u/s 256(1). The petition u/s 256(2) is hereby rejected.

No order as to costs.