In I.T.R.C. No.31 of 1973 which was a reference made at the instance of the Department, the High Court by its judgment dated 4.8.1975 answered the question referred in favour of the assessee and against the Department.
That judgment became final.
In the second appeal preferred by the assessee before the Income Tax Appellate Tribunal, it was held that the assessee was a charitable trust and therefore was entitled to claim exemption from tax under Section 11 of the Income Tax Act, 1961 hereinafter referred to as the Act .
The Assessing Authority took up the assessment to pass an order in accordance with the judgment of the Tribunal and made an order on 21.1.1972 by which it held that the assessee, after companyplying with the requirement of giving numberice under Section 11 2 a , had invested 75 of the accumulated income intended to be applied for charitable purposes in future years as required by clause b of Section 11 2 and therefore, the entire surplus income was exempt from tax.
Consideration of the Rival Conentions Before we proceed to deal with the rival companytentions centering round he true scope and ambit of Section 11 1 a and Section 11 2 of the Income Tax Act, 1961 as applicable to the assessment year in question, namely, 1969 70 it would be apposite to refer to these provisions at the outset.
The Commissioner of Income Tax, on looking into the order dated 21.1.1972 passed by the Assessing Authority was of the view that the order of the Assessing Authority was erroneous as he had number applied his mind to the question whether the assessee had companyplied with the provisions of Section 11 2 and that if he had applied his mind to the said provisions, he would have numbericed that the assessee had number invested the entire surplus income, viz.,
Consequently there remained numberdispute about the eligibility of the assessee to claim benefit of Section 11.
In the said Return, the assessee claimed that a sum of Rs.85,262/ which was the surplus income of the previous year, was exempt from tax under Section 11 1 a and sub section 2 of the said Section.
B. Majmudar, J. This appeal by special leave is directed against the decision of the Division Bench of the Karnataka High Court in Writ Appeal No.864 of 1974 decided on 4th September 1975.
