[CIT v. J. K. Charitable Trust, (2009) 308 ITR 161
(SC)]
The challenge in the appeals in each case before the
Supreme Court was to the order passed by a Division Bench of the Allahabad
High Court answering the reference made by the Income-tax Appellate Tribunal,
Allahabad Bench (in short ‘the ITAT’) u/s.256(1) of the Income-tax Act, 1961
(in short ‘the Act’) in favour of the assessee and against the Revenue. For
answering the references in favour of the assessee, the High Court relied upon
its judgment for two previous assessment years, i.e., 1972-73 and
1973-74 in the assessee’s case which is reported in CIT v. J. K. Charitable
Trust, (1992) 196 ITR 31. The present dispute relates to several
assessment years i.e., 1972-73 (in respect of an assessment reopened
u/s.147(1) of the Act) and the A.Y.s 1975-76 to 1982-83.
Learned counsel for the Revenue-appellant submitted before
the Supreme Court that each assessment year is a separate assessment unit and
the factual scenario had to be seen. The dispute related to the question
whether the respondent-assessee’s trust was hit by the provisions of S.
13(1)(c) and S. 13(2)(a)(f) and (h) of the Act and, therefore, could not be
given the benefit of exemption provided u/s.11 of the Act.
Learned counsel for the assessee submitted before the
Supreme Court that for several years no appeal had been filed even though the
factual position was the same, i.e., for the A.Y. 1983-84 up to the A.Y.
2007-08. No appeal was filed even against the decision reported in CIT v.
J. K. Charitable Trust, (1992) 196 ITR 31. It was also pointed out that
several other High Courts had taken a similar view and no appeal was preferred
by the Revenue against any of the judgments of the different High Courts.
Reference is made to the decisions reported in CIT v. Trustees of the Jadi
Trust, (1982) 133 ITR 494 (Bom.), CIT v. Hindusthan Charity Trust,
(1983) 139 ITR 913 (Cal.), CIT v. Sarladevi Sarabhai Trust, (No. 2)
(1988) 172 ITR 698 (Guj.) and CIT v. Nirmala Bakubhai Foundation,
[1997] 226 ITR 394 (Guj).
Learned counsel for the Revenue submitted that even though
appeal had not been preferred in respect of some assessment years, that did
not create a bar for the Revenue filing an appeal for other assessment years.
Reliance was placed on a decision of the Supreme Court in
C. K. Gangadharan v. CIT, (2008) 304 ITR 61.
The Supreme Court noted that the factual scenario was
undisputed that for a large number of assessment years no appeal had been
filed. The basic question, therefore, was whether the Revenue could be
precluded from filing an appeal even though in respect of some other years
involving identical dispute no appeal was filed.
The Supreme Court observed that in this case, it was
accepted by the learned counsel for the appellant-Revenue that the fact
situation in all the assessment years was the same. According to him, if the
fact situation changes, then the Revenue could certainly prefer an appeal
notwithstanding the fact that for some years no appeal was preferred. The
question was of academic interest in the present appeals as undisputedly the
fact situation was the same. The Supreme Court therefore held that the appeals
were without merit and were accordingly dismissed.
