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JUDGMENT Govinda Bhat, CJ.-This is an appeal brought on behalf of the Additional Commissioner of Income-tax, Karnataka, and the First Income-tax Officer, Mangalore Circle, Mangalore, against the order made in W.P. No. 597 of 1973 (A.L.N. Rao Charitable Trust v. Addl. Commissioner of Income-tax [1975] 101 ITR 838 (Kar.)) by Venkataramiah J. by which the learned judge allowed the writ petition filed by the respondent herein and directed the Commissioner of Income-tax to dispose of the proceedings initiated by him under section 263 of the Income-tax Act, 1961, hereinafter called "the Act", in the light of the interpretation of section 11 of the Act made in the said order. The relevant facts in brief are: Respondent, A.L.N. Rao Charitable Trust, Mangalore, is a charitable trust. For the assessment year 1969-70, the respondent, hereinafter referred to as "the assessee", submitted its return to the First Income-tax Officer, Mangalore Circle. In the said return, the assessee claimed that a sum of Rs. 85,262, which was the surplus income of the previous year, was exempt from tax under section 11(1)(a) and sub-section (2) of the said section. On the assessing authority holding that the assessee is not a genuine trust and, therefore, not entitled to claim the benefit of section 11, the assessee preferred an appeal before the Appellate Assistant Commissioner, which was dismissed. In the second appeal preferred by the assessee before the Income-tax Appellate Tribunal, it was held that the assessee was a charitable trust and, therefore, was entitled to claim exemption from tax under section 11 of the Act. In I.T.R.C. No. 31 of 1973 (Addl. Commissioner of Income-tax v.A.L.N. Rao Charitable Trust [1976] 102 ITR 474 (Kar.)) which was a reference made at the instance of the department, this court by its judgment dated August 4, 1975, answered the question referred in favour of the assessee and against the department. Therefore, that the assessee is a charitable trust entitled to claim the benefits of section 11 is no longer in dispute. The assessing authority took up the assessment to pass an order in accordance with the judgment of the Tribunal and made an order on January 21,…

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