R.K.AGRAWAL, J. - (1.) THE Tribunal, Allahabad, has referred the following questions of law under s. 256(1) of the IT Act, 1961, hereinafter referred to as "the Act" for opinion to this Court : "1. Whether in law and circumstances of the case, the Tribunal was justified in upholding the decision of the AAC directing to allow exemption under s. 11 of the IT Act, 1961, ignoring the fact that there can be no valid transfer of immovable property without a registered and stamped instrument of transaction ? 2. Whether in law and circumstances of the case, the Tribunal was justified in holding that the provisions of s. 123 of Transfer of Property Act and s. 17 of Indian Registration Act, 1908 do not apply to the dedication/endowment made to the charitable trust ? 3. Whether transfer of an immovable property by any person without any consideration to a trust which is not regarded as charitable trust, is covered under the definition of dedication/endowment -
(2.) THE present reference relates to the asst. yr. 1982 -83.
(3.) BRIEFLY stated the facts giving rise to the present references are as follows : The assessee trust claimed itself to be a charitable trust and pleaded before the ITO that its income was exempt under s. 11 of the Act. The claim of the assessee was, however, rejected by the ITO by observing as below : "In response to notice issued under s. 143(2), Shri B.K. Agarwal attended on behalf of the assessee trust and filed the details as called for during the course of assessment proceedings. He submitted that the trust has been registered under s. 12A of the IT Act and produced the copy of the order under s. 12A of the IT Act and produced the copy of the order properties No. 44, 200, 112, Harrisganj, Kanpur, have been mutated in the name of the trust during the year under consideration. Photocopies of these mutation orders have been filed. The other three properties claimed by the trust as belonging to it have not been mutated till the end of the accounting year under consideration. In the preceding assessment years, the income from all the six properties was protectively taxed in the hands of the trust and it was substantially taxed in the hands of M/s SRGP, HUF, to whom these properties belong. This was because of the various decisions quoted in the assessment order for the asst. yr. 1981 -82. However, since during the accounting year, three properties have been mutated in the name of the trust, the income of Rs. 1,765 approx. relatable to these three properties would be taxed substantially in the hands of the trust. The rest of the income from properties i.e., Rs. 15,148 will be taxed in the hands of M/s SRGP. HUF, to whom these properties belong. This was because of the various decisions quoted in the assessment order for the asst. yr. 1981 -82. However, since during the accounting year, three properties have been mutated in the name of the trust, the income of Rs. 1,765 approximately relatable to these three properties would be taxed substantially in the hands of the trust. The rest of the income from properties, i.e., Rs. 15,148 will be taxed in the hands of M/s SRGP HUF, to whom these properties belong. The exemption as per rule against the property income would be allowed." The assessee appealed before the AAC, who reversed the order of the ITO by observing as follows : "The appeal has been filed against ITO's action of refusing to allow exemption under s. 11. The facts of the case are that appellant. The ITO found that out of six properties 3 were mutated in the name of the appellant trust while remaining 3 still remained in the name of the HUF. Accordingly, the income of the three properties was assessed in the hands of the appellant trust substantially while the income of the remaining three properties was assessed in the hands of the HUF. and that the appellant is entitled to exemption under s. 11. As per the reasons given therein the assessment is set aside with the directions that the ITO will recomplete the assessment after determining the income from all six properties in the hands of the appellant trust allowing exemption under s. 11 subject to fulfilment of conditions mentioned in s. 11.";