R.N. Ray, J. - (1.) HEARD Sri Shekhar Srivastava, learned counsel for the Revenue, and none appeared for the assessee.
(2.) WE were asked to decide the following question as referred to under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), as to : "Whether, on the facts and in the circumstances of the case, was the Tribunal legally correct in holding that the income of the assessee could not be brought to tax and hence the assessment itself was a nullity and that no interest could have been charged under Sections 139 and 217 notwithstanding the fact that the Tribunal's decision has not become final in view of the reference application under Section 256(1) filed by the Commissioner of Income-tax ?" The facts of the case are that the assessee had been claiming that it was a wholly charitable institution and its income should not be subject to tax under Sections 12 and 13 of the Act. The Income-tax Officer rejected the contention and assessed the tax and also charged interest for nonpayment of tax. Against the said order, the assessee preferred an appeal before the Tribunal and the Tribunal was pleased to hold that the assessee was 'completely a charitable institution and as such the Income-tax Officer was wrong in assessing the tax under Sections 12 and 13 of the Act and it was also held that the assessment itself was bad in law. There could not be any question of interest, since the findings by the Tribunal are based on reasoning. It cannot be said that the finding is perverse so that interference by the High Court may be necessary.
(3.) SINCE the institution of the assessee is completely charitable, as such it is not subject to tax under Sections 12 and 13 of Act. Interest imposed for non-payment of tax was also erroneous. With these findings, we answer this reference in favour of the assessee and against the Revenue.;