SARABHAI FOUNDATION Vs. INCOME TAX OFFICER
LAWS(IT)-1989-3-18
INCOME TAX APPELLATE TRIBUNAL
Decided on March 14,1989

Appellant
VERSUS
Respondents

JUDGEMENT

Per Shri K. R. Dixit, Judicial Member - The central issue in this appeal is in respect of the claim to exemption as a public charitable trust made by the Sarabhai Foundation, the appellant before us. The question are : - (1.)1. Whether the assessee can be called a public charitable trust
(2.)If so, whether it is entitled to exemption under section 11 in respect of its income. The second question gives rise to a further question : "Whether the grant of exemption is forfeited on the ground that the property or income of the Trust have been used for the benefit of the trustees or any concerns in which they have a substantial interest by application of sub-sections (1) (c) and (3) of section 13." 2. There are no less than 83 grounds of appeal but they all converge on the above points.
Briefly stated, the facts which have given rise to these questions are that the Inspecting Assistant Commissioner (IAC) disallowed the claim of exemption under sec. 11 in respect of all the items on the ground that the income was not set for charitable purpose and that the income was not spent for charitable purpose and that the Trust property or income was used for the benefit of persons maintained in sec. 13(3). The Commissioner confirmed it in respect of all except three items on the ground that conditions under section 11 were not satisfied and those under section 13 were violated.

(3.)THE investigation by the IAC which resulted in the assessment proceeded in three stages i.e., (1) examination of the return, which led to (2) a visit to the assessees premises and property which further led to (3) a "detailed investigation."


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