High Court Of Gujarat
CIT vs. Shreyas Nidhi, Swati Nidhi, Venu Nidhi & Swasthya Nidhi
Sections 11, 13(2)(h)
M.S. Shah & K.A. Puj, JJ.
IT Ref. No. 113 of 1990
3rd July, 2002
Counsel Appeared : Manish R. Bhatt, for the Applicant : None, for the Respondent
JUDGMENT
K.A. PUJ, J. :
At the instance of the Revenue, following question of law is referred to this Court for its opinion : “Whether, on the facts and in the circumstances of the case, the provisions of ss. 13(2)(h) and 13 (3) applied and whether the assessee-trust was entitled to exemption under s. 11 of the IT Act, 1961?”
2. The assessee has claimed exemption under s. 11 of the IT Act, 1961 (‘the Act’). The ITO, however, denied the said exemption to the assessee on the ground that the provisions of s. 13(2) (h) of the Act were applicable to it. Further, the ITO took an adverse inference against the assessee as he was of the view that the assessee had not filed audit report as contemplated under s. 12A(b) of the Act, within the prescribed time. In appeal, the AAC held that the provisions of s. 13(2)(h) were not applicable in the assessee’s case. He further held that the default if at all in filing the audit report was ‘technical lapse’. He, therefore, held that the ITO was not justified in denying the benefit of exemption under s. 11. Being aggrieved by the order of the AAC, the Revenue came up in appeal before the Tribunal. At the time of hearing of the said appeal, the learned counsel for the assessee placed before the Tribunal a copy of its order in the case of Ambalal Sarabhai Trust No. 19 [IT Ref. No. 595/Ahd/80, dt. 28th Jan., 1981] and highlighted the fact that on an identical point which came up before the Tribunal in that case, the Tribunal was pleased to hold that the provisions of s. 13(2)(h) were not applicable and, therefore, the assessee was entitled to exemption under s. 11 of the Act. He, therefore, urged that the Tribunal should likewise hold in the said appeal also. While disposing of the appeal by the Tribunal, a reference was made to the Tribunal’s own decision in the case of Ambalal Sarabhai Trust No. 19 (supra) and the Tribunal has taken the view that the provisions of s.13(2)(h) were not applicable and the assessee was, therefore, entitled to exemption under s. 11. The said issue was taken by the Revenue in reference before this Court and while deciding the said reference, this Court has referred to and relied on its earlier decision in the case of CIT vs. Insaniyat Trust (1988) 71 CTR (Guj) 145 : (1988) 173 ITR 248 (Guj) : TC 23R.1545, wherein, after elaborately discussing the provisions contained in ss. 11 and 13, this Court had come to the conclusion that the provisions of s. 13(2)(h) are not applicable and the assessee was entitled to the exemption under s. 11 of the Act. The facts of the present case are similar to the facts of the Insaniyat Trust’s case (supra) and other similar matters. We follow the decision taken by this Court in the above judgments. Accordingly, we answer the question referred to us partly in the negative and partly in the affirmative. However, it is in favour of the assessee and against the Revenue. The reference is, accordingly, disposed of with no order as to costs.
[Citation : 258 ITR 712]
