Harijan Evam Nirbal Varg Avas Evam Vikash Nigam Ltd. vs Commissioner of Income Tax

Om Prakash, J.—The Income Tax Appellate Tribunal (Allahabad Bench), drew up a statement of the case for the assessment year 1981-82 and referred the following questions at the instance of the assessee and of the Revenue :

" Whether, on the facts and in the circumstances of the case, the Tribunal having found the assessee eligible for exemption u/s 10(26B) was justified in not declaring the whole of its income totally exempt from tax, irrespective of its nature and sources ?"

(at the instance of the assessee)

" Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the income attributable to executing the housing schemes and the other connected schemes therewith for the benefit of Scheduled Castes is exempt u/s 10(26B) of the Income Tax Act, 1961, when the corporation was also formed for promoting the interests of backward classes and other weaker sections of the society ?"

(at the instance of the Revenue)

These questions came up for our consideration in the assessee''s case relating to the assessment year 1979-80 which was decided by us by an order dated December 6, 1995, in Income Tax Reference No. 86 of 1986 Commissioner of Income Tax Vs. Harijan Evam Nirbal Varg Avas Nigam, . In the said order, we held that the assessee is entitled to exemption u/s 10(26B) of the Income Tax Act, 1961, only in respect of the housing schemes executed pursuant to the main object No. 1 of the memorandum of association of the assessee for the promotion of the interests of the members of the Scheduled Castes and that no exemption can be claimed under that provision in respect of the income which accrued from carrying on the activities under the main objects Nos. 2, 3, 4 and 5 of the memorandum of association of the assessee and from the house building activity, in so far as that relates to the people of backward classes and other categories.

Following our order dated December 6, 1995, pertaining to the assessment year 1979-80, the question referred at the instance of the assessee is partly answered in favour of the assessee and against the Revenue and the question referred at the instance of the Revenue is answered in the affirmative in terms of our order dated December 6, 1995.