High Court dismisses revenue's appeal on share donation to trust, upholds Tribunal's order.

The High Court dismissed the revenue's appeal against the Income Tax Appellate Tribunal's order for assessment years 2000-01 and 2001-02. The issue centered on whether holding shares donated to a trust with a condition of retention for at least 5 years, in contravention of Section 13(1)(d), would lead to denial of exemption under Section 11. The Court found the Tribunal's decision to be factual, based on the previous ruling in the assessee's favor for another assessment year. No substantial legal question arose, leading to the dismissal of the appeals without costs.

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Issues:
Appeal against the order passed by the Income Tax Appellate Tribunal for assessment years 2000-01 and 2001-02 - Interpretation of Section 13(1)(d) in relation to the exemption under Section 11.

Analysis:
The appeals were filed by the revenue against the order of the Income Tax Appellate Tribunal for the assessment years 2000-01 and 2001-02. The main question of law was whether holding shares donated to a trust with a condition of retention for at least 5 years, in contravention of Section 13(1)(d), would result in denial of exemption under Section 11. The Tribunal held that it is not for the assessee to sell the shares, and law cannot compel one to do the impossible.

Upon review, the High Court found the matter to be factual. The Assessing Officer had held that the assessee trust was required to dispose or convert assets not conforming to Section 11(5) into permissible investments within a specified time frame. The Tribunal's decision was based on the factual position and the previous decision in the assessee's favor for the assessment year 2002-03. The revenue did not appeal the decision for 2002-03 due to low tax effect, despite the issue being recurring.

The High Court concluded that the Tribunal's decision was based on an appreciation of the factual position, and no substantial question of law arose for consideration in the appeal. As a result, the appeals were dismissed, and no costs were awarded. The connected miscellaneous petition was closed accordingly.

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