1999 PLP 3421 (PTD)
DIRECTOR OF INCOME-TAX (EXEMPTION) Versus SHILPAM
| Citation | 1999 PLP 3421 (PTD) |
| Forum / Court | 230 I T R 126 |
| Bench Members | Vinod Kumar Gupta and Dipak Prakas Kundu, JJ |
| Parties | DIRECTOR OF INCOME-TAX (EXEMPTION) Versus SHILPAM |
| Primary Law | Income-tax |
Q1: What are the key laws and sections cited in 1999 PLP 3421 (PTD)?
This judgment primarily cites: Income-tax as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 1999 PLP 3421 (PTD)?
The case was heard and decided by the 230 I T R 126 bench comprising: Vinod Kumar Gupta and Dipak Prakas Kundu, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 1999 PLP 3421 (PTD) (DIRECTOR OF INCOME-TAX (EXEMPTION) Versus SHILPAM). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- We have heard the learned advocates for the parties. Even though two questions have been referred for our opinion, we think that the second question need not be touched since the first one deals with the points of controversy between the parties. The question as referred is as follows:
Headnotes / Summary
Condition for claiming exemption-- Predominant object of activity of institution should be to carry out a charitable purpose and not to earn profit
Institution deriving some profit by sale of books
Does not disentitle institution to benefit of exemption-- Indian Income Tax Act, 1961, S.11(4-A). The Income-tax Officer rejected the claim of the assessee, a charitable trust, for exemption under section I 1(4-A) of the Income Tax Act, 1961, on the ground that the sale of books, etc., by which profit was earned by the institution could not be considered as a charitable purpose. However, on appeal, the Appellate Assistant Commissioner and on further appeal, the Tribunal, allowed the claim for exemption on the ground that section 11(4-A) entitled a charitable institution to the benefit of exemption, even if some profit was earned in the course of the carrying .on of the charitable purpose. On a reference: Held, affirming the decision of the Tribunal, that if the predominant object of the assessee was to carry out a charitable purpose and not to earn profit, the charitable purpose would not lose its character merely because some profit had arisen from the activity. Therefore, the assessee was entitled to exemption under section 11(4=A) of the Act. CIT v. Andhra Pradesh State Road Transport Corporation (1986) 159 ITR 1 (SC) applied. J.P. Khaitan for the Assessee. R.C. Prasad and P.K. Bhowmick for the Commissioner.
Judgment & Decree
We have heard the learned advocates for the parties. Even though two questions have been referred for our opinion, we think that the second question need not be touched since the first one deals with the points of controversy between the parties. The question as referred is as follows: "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in allowing exemption under section 11(4-A) of the Income Tax Act, 1961, when the Income-tax Officer denied the same for the assessee's failure to fulfil the conditions prescribed in the said section?" The learned Appellate Assistant Commissioner and the Tribunal have taken the view that section 11(4-A) of the Income-tax Act permits the charitable institution the benefit of exemption even if some profit is earned in the bargain. The learned Income-tax Officer had refused to grant exemption under section 11 on the ground that the sale of books, etc. by which a profit was earned by the institution could not be considered as charitable purpose. The Supreme Court in the case of CIT v. Andhra Pradesh State Road Transport Corporation (1986) 159 ITR 1 has clearly observed that the predominant object of the activity, whether it is to carry out a charitable purpose or to earn profit, is of prime consideration in deciding the question of exemption under section 1.1 of the Act. According to their Lordships if the predominant object is to carry out a charitable purpose and not to earn profit, the charitable purpose would not lose its character merely because some profit has arisen from the activity. The aforesaid ratio is clearly applicable to the facts of the case and we accordingly hold that the assessee was entitled to the grant of exemption. The question is answered in the affirmative accordingly. M.B.A./3109/FC Reference answered.