TMI Blog1994 (12) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is not, therefore, entitled to exemption under section 11 of the Income-tax Act, 1961 ? " The assessee is a charitable trust. In September, 1975, the assessee-trust had received a donation of Rs. 1,00,000 from one Shri Laherchand Uttamchand Trust Fund, The assessee-trust, in its turn, gave a donation of Rs. 50,000 during the previous year relevant to the assessment year 1976-77 and Rs. 55,001 during the previous year relevant to the assessment year 1977-78 to the very same trust, i.e., Shri Laherchand Uttamchand Trust Fund. The Income-tax Officer completed the assessments for the two years treating the assessee as a charitable trust entitled to exemption under section 11 of the Income-tax Act, 1961 (" the Act "). The Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission of the assessee was that the expression " person " used in the said provision would not include a trust too. The Commissioner of Income-tax did not accept the above contention of the assessee and held that since part of the income or property of the assessee-trust during the relevant two years, had been used or applied directly for the benefit of the LU Trust, which was a " person " within the meaning of section 13(3)(b) of the Act, the provisions of section 13(1)(c)(ii) were attracted in the case of the assessee-trust and, hence, it was not entitled to exemption under section 11 of the Act. The assessee appealed to the Tribunal against the order of the Commissioner of Income-tax. Before the Tribunal, it was reiterated on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11 or section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof-- . . . . (c) in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof--.... (ii) if any part of such income or any property of the trust or institution (whenever created or established) is during the previous year used or applied, directly or indirectly for the benefit of any person referred to in sub-section (3) : Provided that in the case of a trust or institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or institution, [ that is to say, any person whose total contribution up to the end of the relevant previous year exceeds five thousand rupees] ; . . . . " (emphasis supplied). The bracketed part in clause (b) of section 13(3) was inserted by the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1977, and hence, applies to assessments for the assessment year 1977-78 only. This amendment is, however, not relevant for the purposes of the present case where the contribution of Shri Laherchand Uttamchand Trust Fund was Rs. 1,00,000, far in excess of the above amount. It is clear from a reading of section 13, which opens with the non obstante clause " Nothing contained in section 11 or section 12 shall operate so as to exclude f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... du undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, hot falling within any of the preceding sub-clauses. It is not disputed before us that a " trust " is also a " person " within the meaning of section 2(31) of the Act. If that is so, we fail to understand how a different meaning can be ascribed to the same expression " person " appearing in the various sub-sections and clauses of section 13 of the Act. That being so, the assessee-trust having applied a substantial part of its income or property (even more than the total contribution of Laherchand Uttamchand Trust to it), the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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