Commissioner Of Income Tax - Applicant(S v. Vaidhraj Veljibhai Vasram Kadva Patel - Respondent(S

ITR/288/1995 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 288 of 1995 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG HONOURABLE MR.JUSTICE M.R. SHAH =========================================================1[Whether Reporters of Local Papers may be allowed ]to see the judgment ?1[Whether Reporters of Local Papers may be allowed ]to see the judgment ? 2To be referred to the Reporter or not ? 3[Whether their Lordships wish to see the fair copy ]of the judgment ?Whether this case involves a substantial question of law as to the interpretation of the 4constitution of India, 1950 or any order made thereunder ? 5[Whether it is to be circulated to the civil judge ]?? ========================================================= COMMISSIONER OF INCOME TAX - Applicant(s) Versus VAIDHRAJ VELJIBHAI VASRAM KADVA PATEL - Respondent(s) =========================================================Appearance :MR MANISH R BHATTfor Applicant(s) : 1,MR NR DIVETIA for Respondent(s) : 1,MR SN DIVATIA for Respondent(s) : 1, ========================================================= CORAM :HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE M.R. SHAH Date : 04/08/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.GARG) Mr Manish R Bhatt learned counsel for the. . , Revenue. Mr S N Divatia learned counsel for the assessee. . . , . 2.At the instance of the Revenue, the Income TaxAppellate Tribunal, Ahmedabad Bench 'C', Ahmedabad, hasmadethisReferenceunderSection256 1( ) oftheIndianIncome Tax, on the following questions for opinion of thisCourt; 1.Whetheronthefactsandinthecircumstances of the case the AppellateTribunalwasjustifiedinlawinholdingthattheprovisionsofsection13 3 b( )( )applied only to trusts which were purelyfor charitable purposes and the assesseetrustwasentitledtoexemptionunder-section 11 of the Income tax Act 1961 ?, 2.Whetherinviewofthefindingof-the Income tax Officer that even thoughthe trust was described to be a charitablecum religious trust the Appellate Tribunalwasrightinlawinholdingthattheprovisions of section 13 1 b( )( ) of the Actdidnotapplyandtheexemptionasclaimed was available under section 11 ofthe Act ?3.Whether the appellate Tribunal wasjustified in holding that the amendment ofthetrustdeedon8 5 87- -shouldbe regarded as clarificatory in nature and itshould be made applicable ever since theinception of the assessee trust ?' 3.Thebasicquestion, raisedintheReference, is--that if the Trust is a charitable cum religious Trust, would itbe entitled to exemption under Section 11 of the IncomeTax Act, 1961 or provisions of Section 13 1 b( )( ) would applyfor disallowance of the exemption. In the matter of 213 ITR 492 [Shantagauri Ramniklal Trust And Others Vs.Commissioner of Income Tax And Another,239 ITR 528, ], an identical question has been answered by a Division Bench of this Court by holding that provisions of Section 13(1)(b) of the Act would not apply, if the Trust is a charitable-cum-religious Trust. Following that Judgment, we have also decided Income Tax Reference No. 234 of 1995 in favour of the assessee. 4. Though the learned counsel for the Revenue vehemently contended that the Judgment, in the matter of Shantagauri Ramniklal Trust And Others Vs. Commissioner of Income Tax And Another,deservestobereconsideredbyLargerBench, inabsenceofanyothermaterialoranyJudgment of the High Courts or some observations made bythe Supreme Court, it would not be prudent for us, nor it ITR/288/1995 ITR/288/19954/4JUDGMENTwould be possible to refer the matter to the Larger Bench,the prayer is rejected. The Questions No. 1 and 2 , in viewoftheearlierJudgmentsoftheCourt, areansweredinfavour of the assessee. 4. Though the learned counsel for the Revenue vehemently contended that the Judgment, in the matter of Shantagauri Ramniklal Trust And Others Vs. Commissioner of Income Tax And Another,deservestobereconsideredbyLargerBench, inabsenceofanyothermaterialoranyJudgment of the High Courts or some observations made bythe Supreme Court, it would not be prudent for us, nor it ITR/288/1995 ITR/288/19954/4JUDGMENTwould be possible to refer the matter to the Larger Bench,the prayer is rejected. The Questions No. 1 and 2 , in viewoftheearlierJudgmentsoftheCourt, areansweredinfavour of the assessee. 5.So far as the Question No 3 is concerned. , it cansimply be disposed of by observing that if the covenants of, the Trust Deed are clarified by clarificatory note, then theclarificationwouldchangethecomplexofthecovenantsright from the inception. A clarification would explain whatis already available if it does not change the very nature of, the earlier convenant of the Trust Deed. 6.Looking to the totality of the circumstances andthe judicial pronouncements made earlier, we are oftheopinion that all the questions are required to be answeredin favour of the assessee. The Reference is accordinglydisposed of. rmr.