1978 (11) TMI 93 - AT - Income Tax

Tax Tribunal grants charitable trust status exemption on appeal, directs amendment.

The ITAT allowed the appeal, holding that the assessee is a charitable trust entitled to exemption. The assessment was directed to be amended to reflect ... Charitable trust - public charitable trust - scope of objects in the trust deed - distinction between trust status and exemption under section 11 - exemption under section 11 dependent on compliance with sections 11, 12 and 13Charitable trust - public charitable trust - scope of objects in the trust deed - distinction between trust status and exemption under section 11 - The assessee is a public charitable trust. - HELD THAT: - The Tribunal examined the trust deed dated 9th April, 1973 and found that the stated objects - to establish, maintain and grant aid to hospitals, nursing homes, orphanages and to grant relief during natural calamities - are all charitable objects. The ITO had conflated two distinct questions: the legal character of the trust (to be determined from the objects in the trust deed) and the question whether the trust's income is exempt under section 11 (which depends on compliance with conditions in sections 11, 12 and 13). The ITO did not decide entitlement to exemption, apparently because the income was computed as a loss with no demand raised. The Tribunal therefore confined itself to the question before it - the status of the trust - and held that the assessee is a charitable trust, without expressing any opinion on whether its income is exempt under section 11 or remanding that question for fresh consideration. [Paras 5, 6]Assessee held to be a charitable trust; assessment to be amended to record its status as such.Final Conclusion: Appeal allowed; assessee's status declared to be that of a charitable trust and the assessment amended accordingly; no decision expressed on entitlement of the trust's income to exemption under section 11. The appeal was filed against authorities' decision that the assessee is not a charitable trust. The trust deed showed charitable objects. The ITAT held that the assessee is a charitable trust entitled to exemption. The assessment was directed to be amended to reflect the charitable trust status. The appeal was allowed.