Prospective rectification of trust deed cannot revive income-tax exemption for earlier assessment years under sections 11 and 12.

A civil court's rectification of a trust deed was held to operate only prospectively from the date of the decree, so it could not change the character of the trust for earlier assessment years. The earlier finding that the trust was not charitable for those years continued to govern the exemption claim under sections 11 and 12 of the Income-tax Act, 1961. On that basis, the assessee could not rely on the later rectification to obtain tax exemption for the assessment years in question, and the reference was answered in favour of the Revenue.

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Issues: Whether the assessee-trust was entitled to exemption from income-tax under sections 11 and 12 of the Income-tax Act, 1961, on the basis that it was a public charitable trust and on the strength of the civil court's rectification of the trust deed.

Analysis: The trust deed had been rectified by a civil court after the relevant assessment years. The rectification was held to operate only prospectively from the date of the decree and not retrospectively so as to alter the character of the trust for earlier years. The earlier decisions holding the trust to be non-charitable for the assessment years in question continued to govern those years, and the assessee could not claim exemption on the basis of the later rectification.

Conclusion: The assessee was not entitled to exemption under sections 11 and 12 of the Income-tax Act, 1961, for the assessment years in question, and the answer to the reference was in favour of the Revenue.

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