TMI Blog1988 (3) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... TO however, held that the objects of the trust were charitable and, he, therefore, computed the income by applying the provisions of s. 11 of the IT Act. The net income of the assessee was determined at Rs. 7,560 which was below the taxable limit. As no demand was raised the assessee did not appeal against this assessment order though the finding of the ITO regarding inapplicability of s. 10(22) had gone against the assessee. 2. The CIT was, however, of the view that the assessment made was erroneous insofar as it was prejudicial to the interests of the Revenue. He found that there were certain receipts like souvenir advertisement collection and other collections and coats funds which had not been included in the income of the assessee wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een submitted before us by the learned Counsel for the assessee that the case of the assessee from the beginning had been that it should get exemption under s. 10(22) of the IT Act. He submitted that though the ITO had rejected this plea of the assessee, the assessee had not filed any appeal in view of the fact that there was no tax demand against the assessee. He pointed out that the Commissioner issued notice to the assessee stating that he intended to take action under s. 263, the assessee had drawn his attention to the assessee's claim under s. 10(22). It was stated that under this section the whole income is exempt under s. 10(22) and in those circumstances the question of going into the nature of these receipts would not arise. The co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions which are given in s. 10 (22). In this connection, he referred to the registration of the school by the Registrar of Societies of the Delhi Administration. It was further submitted that though in the Memorandum there are other objects mentioned but the question of income-tax assessment has arisen only because the school was being run and some finances were required for its running. It was also submitted that the main society which was in Bombay which was being assessed as Society of St. Frances Xavior Pillar India, at Bandra in Bombay has been granted exemption under s. 10 (22) though the missions and objects are similar. The learned Counsel, therefore, submitted that the order of the Commissioner should be set aside as he has not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l when the ITO had rejected its plea. It was submitted that the Commissioner could not consider this plea of the assessee in proceedings under s. 263. 6. We have considered the facts of the case and the rival submissions. We are of the view that while considering the assessment which had been made by the ITO the Commissioner should have also considered the other plea of the assessee that its income was exempt under s. 10(22) of the IT Act. In case this request was accepted, there would have been no occasion for interfering with the order of the ITO where he had computed the income by applying the provisions of s. 11. The provisions of s. 263 are no doubt for enabling the Commissioner to interfere with the orders of the ITO where some loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the application of income from the school for non-education purpose in a prior year was not very material and the fact that the assessee does have objects other than educational objects was also not material. The Trust was granted exemption under s. 10(22). 7. The submission of the assessee has force and the main plea of the assessee should not be brushed aside even in proceedings under s. 263. As the Revenue authorities have yet not applied their minds to grant of exemption under s. 10(22), we would consider it proper to modify the order of the Commissioner and direct the ITO that alongwith other points he should also consider the plea of the assessee under s. 10(22) of the IT Act in the light of such recognition granted to a siste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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