Madras High Court
Commissioner Of Income-Tax vs Matriseva Trust on 25 March, 1999
Equivalent citations: [2000]242ITR20(MAD)
Author: R. Jayasimha Babu
Bench: R. Jayasimha Babu
JUDGMENT A. Subbulakshmy, J.
1. At the instance of the Revenue, the following questions have been referred to us for our consideration :
"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the donation of Rs. 31,050 made by the assessee to another institution, would tantamount to application of income for charitable purposes, thus satisfying the requirements of Section 11 ? and (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the deficiency of funds of this year could be set-off against the earlier year's surplus ?"
2. During the assessment year 1984-85, the assessee-trust had donated a sum of Rs. 31,050 to another charitable trust known as the service trust. The assessee-trust claimed exemption under Section 11 of the Act, which Was rejected by the Income-tax Officer. On appeal, the Commissioner (Appeals) had allowed the claim of the assessee. The Tribunal had confirmed the order of the Commissioner (Appeals).
3. With regard to the first question, this court in the decision reported in CIT v. Thanthi Trust [1982] 137 ITR 735, had held that the trust which has applied the money for charitable purposes was entitled to exemption without having to show how the money had been dealt with by the transferee institution. This court has answered the question referred there in favour of the assessee and against the Revenue.
4. Following the aforesaid decision of this court and for the reasons stated therein, we answer the first question referred to us in favour of the assessee and against the Revenue.
5. With regard to the second question, the Tribunal has held that the trust is entitled to set off the amount of excess application of the last year against the deficiency of Rs. 82,516 of the present assessment year.
6. When similar questions came up before the Rajasthan High Court and the Gujarat High Court in the case of CIT v. Maharana of Mewar Charitable Foundation [1987] 164 ITR 439 and CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal [19951 211 ITR 293, respectively, both the Rajasthan High Court and the Gujarat High Court have answered the questions in favour of the assessee and against the Revenue.
7. Following the aforesaid decisions of the Rajasthan and Gujarat High Courts, we answer the second question referred to us in favour of the assessee and against the Revenue.