The Commissioner Of Income-Tax, Panchkula v. M/S Haryana C. M. Relief Fund, Chandigarh

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Case No. : I. T. A. No. 609 of 2007 Date of Decision : December 15, 2008. The Commissioner of Income-tax,Panchkula....Appellant Vs.M/s Haryana C. M. Relief Fund, Chandigarh ....Respondent CORAM : HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE L. N. MITTAL * * * Present :Mr. Yogesh Putney, Senior Standing Counselfor the Revenue. Mr. Akshay Bhan, Advocateand Mr. Sandeep Goyal, Advocatefor the assessee. * * * ADARSH KUMAR GOEL, J. (Oral) : 1.Revenue has preferred this appeal under Section 260A of theIncome Tax Act, 1961 (for short, “the Act”) against the order dated25.4.2007 of the Income Tax Appellate Tribunal (ITAT), ChandigarhBench`B', Chandigarh passed in ITA No. 601/CHANDI/2006 for theAssessment Year 2004-05, proposing to raise following substantialquestions of law :- “a)Whether in the facts and circumstances of the case, the Hon'ble ITAT wasright in holding that the interest income derived bythe assessee on bank deposits earned by theassessee are exempt u/s 11(1)(a) whereas there isno material evidence on record that there was a`legal obligation' within the meaning ofexplanation (1) to section 13 of the Income TaxAct, 1961. b)Whether in the facts andcircumstances of the case, the Hon'ble ITAT wasright in holding that the interest on bank depositsis exempt u/s 12(1) even though these are notvoluntary contributions, as required u/s 12(1) ofthe Income Tax Act, 1961.” 2.The assessee is a registered society and is also registered underSection 12-A of the Act. The Assessing Officer sought to tax interestincome received by the assessee from the deposit in the bank. On appeal,the plea of the assessee that the income was exempt under Section 11 of theAct was upheld. The said view has been further affirmed by the Tribunal. 3.We have heard learned counsel for the parties and perused therecord. 4.It is not disputed that the interest has been earned on a depositwhich is property of the assessee. Section 11 of the Act clearly exemptsincome derived from property of assessee wholly for charitable or religiouspurposes to the extent to which such income is applied for such purposes. 5.Learned counsel for the Revenue submits that the assessee isnot a Trust. We cannot accept the submission in view of explanation toSection 13(1) of the Act, which defines the term `Trust', inter-alia forpurposes of Section 11, to include any other legal obligation. 6.It was also submitted that income was not from voluntary contributions under Section 12(1) of the Act. This question does not ariseas the assessee does not seek to be exempted on account of contributionsbut on account of the interest income from property under Section 11(1)(a)of the Act. Accordingly, we are unable to find any substantial question oflaw.7.The appeal is dismissed. (ADARSH KUMAR GOEL)JUDGE December 15, 2008monika ( L. N. MITTAL )JUDGE