Law: Income Tax Act, 1922

Section: 4,4(3)(i),(ii),

(a) Income-tax Act (XI of 1922)---S. 4(3)(i), (ii) read with Societies Registration Act (XXI of 1860), Ss. 3 & 14-Exemption- Assessee a foundation registered under pro­visions of Societies Registration Act, 1860-Objects of Trust-Charit­able and for public welfare-Funds of such trust bound under law to be applied for public welfare and for no other purpose -Property of Trust even on its dissolution also not transferable to members of Trust but liable to be given to other charitable society-Society (Trust) in circumstances independent and its income liable to be used perpe­tually for charitable purposes only-Real nature and character of respondent Society, held not assailable in proceeding under Income-tax Act, 1922-Any of Trustees or Member of Society found guilty of misconduct or wilfully injuring Society's property such Trustees or member liable to be convicted in criminal Court-Misuse of funds, held further, no fact to be noticed in Income-tax assessment but to be dealt with elsewhere-Income of Society, held still further, exempt under provisions of S. 4(3)(i) and donations received by such Society also exempt under S.4(3)(ii) of Income-tax Act, 1922. I. T. A. No. 509 of 1971-72 distinguished. (1935) 1 I T R; (1963) 47 I T R 558; (1965) 58 T R 600 and (1973) 91 L T R 261 ref. ORDER M. T. SIDDIQUI (PRESIDENT).-These five departmental appeals will be disposed of by the same order in view of the identical nature of objections from which the same arise. The main objections concern the directions of the Appellate Assistant Commissioner to grant exemption to the incomes earned by the respondent from the charge to tax under the provisions of sec­tion 4(3)(i) and the exemption under section 4(3)(ii) to donations received by the respondent-Trust. 2. The brief facts of the case are that Messrs A,,,..Foundation was formed as a charitable institution and was duly registered on 2-6-1970 under the Societies Registration Act No. XXI of 1860, the founder members being Messrs S,,.who became the trustees and got the foundation registered Messrs G ,,,,.and A,,,. donated initially Rs. 10.000 each. In the years 1972-73 and 1973-74 the foundation received donations from the…

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