Law:

Section:

Section 11 of the Income-tax Act, 1961 - Charitable or religions trust - Exemption of income from property held under - For assessment years 1974-75 to 1976-77, ITO disallowed assessee-trust's claim under section 11 - On appeal, Commissioner (Appeals) allowed assessee's claim of exemption under section 11 - Again, for assessment year in question, i.e., 1977-78, ITO disallowed assessee's claim of exemption under section 11 - Assessee again went in appeal but this time Commissioner (Appeals) directed ITO to consider whether assessee had satisfied requirements of sections 12, 12A and 13 - Whether Commissioner (Appeals) was right in directing ITO to examine whether provisions contained in sections 12, 12A and 13 were satisfied or not - Held, yes Facts For the assessment years 1974-75 to 1976-77, the assessee-trust claimed exemption under section 11, which was disallowed by the ITO. On appeal, the Commissioner (Appeals) allowed the assessee's claim. For the assessment year 1977-78 once again the assessee claimed exemption under section 11. The ITO disallowed the assessee's claim. On appeal, the Commissioner (Appeals) allowed the assessee's claim and directed the ITO to consider whether the assessee satisfied the requirements of sections 12, 12A and 13. On appeal, the assessee contended before the Tribunal that once the present Commissioner while disposing of the appeal agreed in all respects with the conclusion of the predecessor Commissioner, it was not open for the present Commissioner to go further and give directions to the ITO to examine whether the provisions contained in sections 12, 12A and 13 were satisfied or not. The Tribunal accepted the assessee's contentions and set aside the directions issued by the Commissioner (Appeals). On reference: Held It is elementary that the provisions contained in section 11 concerning the exemption of a public charitable institution do not take automatic effect. They take effect subject to the fulfilment of the conditions specified in other provisions such as sections 12, 12A and 13. In the instant case, the ITO did not consider it necessary to go into these aspects because at the threshold he refused the assessee's claim…

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