Law:

Section:

Section 11 of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - Assessment years 1978-79 and 1979-80 - Whether a dedication, of property by Hindu renouncing his/her entire right, title or interest in property for religious/charitable purposes for benefit of public at large or for part of it, is sufficient to create such endowment and there is no need to execute registered instrument for such dedication - Held, yes FACTS The assessee, a medical practitioner, filed her return of income for the assessment years 1978-79 and 1979-80. In the return she did not include income from a certain property. In reply to the show-cause notice issued by the ITO, the assessee submitted that the said property with hospital had been irrevocably set apart and dedicated for public charitable purpose in favour of a charitable trust on 1-4-1977 and accordingly placed a copy of trust deed and other details along with the certificate under section 12A. The ITO rejected the assessee's contention on the ground that the property in question was not transferred to the trust by means of registered deed as required under section 17 of the Registration Act, 1908. Thus, the assessee continued to be owner of the said property and such act of the assessee amounted to transfer within the meaning of section 63(b). On appeal, the Commissioner (Appeals) held that although the property was utilised by the trust but as the assessee was the founder and managing trustee, the legal ownership over the property still vested with the assessee and, therefore, the income from that property had to be assessed under section 22 in the hands of the assessee. On second appeal, the Tribunal having found that the property was dedicated by the assessee by renouncing her right in favour of the trust on 1-4-1977, held that the assessee ceased to be the owner of the property in question with effect from 1-4-1977 and, therefore, its income was not liable to be taxed in the hands of the assessee and further that no registered document was required to be executed by the assessee to create a religious endowment with respect to the property in question. On reference :…

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