Commissioner of Income Tax vs Hamdard Dawakhana (Wakf)

Arijit Pasayat, C.J.—At the instance of the Revenue, the following questions have been referred for the opinion of this court u/s 256(1) of the Income Tax Act, 1961 (in short the "Act"), by the Income Tax Appellate Tribunal, Delhi Bench "C" (for short the "Tribunal") :

"(i) Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the running of the business of Hamdard Dawakhana by the assessed-trust was with a view to furthering the objects of the trust and quami income was eligible for exemption u/s 11 of the Income Tax Act, 1961 ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in upholding the sum of Rs. 7,21,206 received by the assessed as Income Tax refund while examining the question of application of income for charitable purpose ?"

We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessed in spite of notice. The assessment years involved are 1975-76 and 1976-77. So far as the first question is concerned, in view of the decision of this court in the assessed''s own case for earlier years, i.e., Additional Commissioner of Income Tax, Delhi-III Vs. Hamdard Dawakhana (Wakf), , the question has to be answered in the affirmative, in favor of the assessed and against the Revenue.

As regards the second question, the Tribunal referred to the language of Section 11(2) of the Act and held that Clauses (a) and (b) of the section referred to "income derived from property held under trust wholly for charitable or religious purposes." Unless the income referred to in Section 11(2) is income which is derived from property held under trust for religious and charitable purposes, the provisions of Section 11(2) of the Act have no application to a particular receipt. Refund of Income Tax can by no stretch of imagination be held as income derived from properly held under the trust. That being the position, the Tribunal was justified in its conclusion that the provisions of Section 11(2) of the Act had no application to the facts of the case. The answer, Therefore, is in the affirmative, in favor of the assessed and against the Revenue. Both the references stand disposed of.