1976 (12) TMI 27

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....ng that the relief under section 88 was also admissible on the initial, donation of Rs. 21,000 made to the Ramchandra Karwa Charitable Trust for the purpose of starting or founding the trust ? " The assessee is a Hindu undivided family and the reference relates to the assessment year 1967-68. During the previous year relevant to this assessment year, the assessee made an initial gift of Rs. 21,000 for the purpose of founding the trust, Ramchandra Karwa Charitable Trust. During the course of the assessment proceedings, the assessee claimed exemption under section 88 of the Act on this sum of Rs. 21,000 as donation given to the fund. But the Income-tax Officer did not allow the claim of exemption. The assessee then preferred an appeal b....

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....ation was made to an existing fund or institution. During the relevant period the relevant provisions of section 88 of the Act were, as follows: " 88. Donations for charitable purpose, etc.--(1) Subject to the provisions of this section, the assessee shall be entitled to a deduction from the amount of income-tax on his total income with which he is chargeable for any assessment year ....... (b) in the case of any other assessee, of an amount equal to the income-tax calculated at the average rate of income-tax, on any sums paid by the assessee in the previous year-- (i) as donations to the National Defence Fund ...... (ii) as donations to any other fund or any institution to which this section applies ;.... " Sub-section (5....

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....ed by law or is an institution financed wholly or in part by the Government or a local authority ........" It is not disputed before the Tribunal that when the donation in question was given, the trust in question was, in fact, founded. This appears from the submissions made on behalf of the department before the Tribunal. The department's case is that the provisions of section 88(1)(b) (ii) would have been attracted if the donation in the instant case had been made to an existing fund or institution. In other words, if a donation is made for the purpose of starting or founding a fund or institution, it is submitted on behalf of the department, such a donation would not attract the provisions of section 88(1)(b) (ii) of the Act. Th....