Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Income Tax Act II 13 & 260(A) 1961 Sections 2(15) |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Income Tax Act, 1961; Sections 2(15), 11, 13 & 260(A): Charitable Institution-Benefits of exemption under Section 11-Entitlement to-Held, since the dominant purpose of establishment of the assessee-lnstitution being charitable, assessee entitled to benefits under Section 11 of the Act. Charitable Institutions-Lending of money to its founder without security-Benefits of exemption under Section 11-Effect on-Held, since assessee lent certain income to prohibited category of person without adequate security and interest, benefit of exemption under Section 11 was lost in view of provisions under Section 13(1)(c)(ii) of the Act. Constitution of India, 1950; Article 136-Appeal-Finding of facts recorded by Subordinate Courts-Interference-Generally finding of facts by Courts below not disturbed unless it is perverse-Under the facts and circumstances of the case, correct finding of facts recorded by revenue authorities were reversed by the Tribunal and affirmed by the High Court on perverse reasoning-Hence set aside. Words & Phrases: 'Founder', 'Foundation '-Meaning of in the context of Section 13(3)( a) and 13(3)(c) of Income Tax Act, 1961. Respondent-assessee, a company limited by guarantee was incorporated under Companies Act. It was an institution established wholly for charitable purposes and a non-profit Organisation and as such registered under the provisions of the Income Tax Act. Assessee claimed benefits of exemption under Section 11 of the Act for the assessment years 1989-90 and 1990-91. Assessing Officer denied the exemption on the ground that objects of assessee institution were not charitable purposes and assessee had breached the condition under Section 13 as well. Appellate authority confirmed the order of Assessing Officer. However, Tribunal allowed the appeals and High Court affirmed it. Hence these appeals. It was contended for the Revenue that since activities of assessee fell outside the definition of charitable purpose it was not entitled to the benefit of Section 11 of the Act; and that since assessee lent its income to the founder of Institution without appropriate security, assessee lost the benefit of exemption under Section 11 of the Act. On behalf of respondent-assessee, it was submitted that the judgment/order of the Tribunal which was affirmed by High Court, ought not to be disturbed by the Supreme Court in appeal under Article 136 of the Constitution of India; and that since 'B' was merely signatory to the Memorandum of Association of the Company, he could not be considered as founder of the Institution. |
Judge | Hon'ble Mr. Justice B.N. Srikrishna |
Neutral Citation | 2002 INSC 522 |
Petitioner | Director Of Income Tax |
Respondent | M/s. Bharat Diamond Bourse |
SCR | [2002] Supp. (5) S.C.R. 95 |
Judgement Date | 2002-12-16 |
Case Number | 8211 |
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