RATTAN TRUST (REGD). v. INCOME TAX OFFICER
[Citation -1986-LL-0210-2]

Citation 1986-LL-0210-2
Appellant Name RATTAN TRUST (REGD).
Respondent Name INCOME TAX OFFICER
Court ITAT
Relevant Act Income-tax
Date of Order 10/02/1986
Assessment Year 1977-78
Judgment View Judgment
Keyword Tags trust income • trust deed
Bot Summary: P. K. MEHTA, A. M.: The assessee trust is in appeal for the asst. Counsel of the assessee, submitted that right from the asst. 1976-77 be the income of the assessee trust has been held to exempt and then same is the position of the asst. The Departmental Representative, on the other hand, submitted that the ITO had adopted a different approach for refusing exemption in the year under appeal and referred to the distinguishing features, when confronted with the order of the ITO granting exemption for the asst. To encourage discussion and litigation on such issues will only mean avoidable harassment to an assessee and to allow the perpetuation of time and money consuming litigation for an assessee. We uphold the assessee s claim for exemption of its income under s. 11 of the IT Act and allow the appeal. The assessee had moved a Stay Application but as to appeal itself is decided it has become infructuous and is dismissed as such.


P. K. MEHTA, A. M.: assessee trust is in appeal for asst. yr. 1977-78. issue involve is whether its income is entitled to exemption under s. 11 of IT Act. Shri Sudersah Kapoor, ld. counsel of assessee, submitted that right from asst. yrs. 1971-72, to asst. yr. 1976-77 be income of assessee trust has been held to exempt and then same is position of asst. yr. 1978-79 to 1982-83 . It was pointed out that so far as asst. yr. 1978-79 to 1982-83 are concerned, ITO s themselves granted exemption to trust income. As far as asst. yrs. 1971-72 to 1973-74 are concerned, it was stated that Tribunal upheld assessee s contention for its income to be exempt and matter was taken by Revenue in reference to High Court and High Court upheld decision of Tribunal by its judgment dt. 3rd March, 1980 reported in CIT vs. Rattan Trust (1980) 16 CTR (P&H) 38. For asst. yrs. 1974-75 and 1975-76, it was submitted that exemption was allowed by AAC and for asst. yr. 1975-76 Revenue filed appeal that Tribunal dismissed it by its order dt. 8th Nov., 1979. Again for asst. yr. 1976-77, exemption was granted by AAC. Copies of assessment order passed by different ITO s for years 1978-79 to 1982-83 were filed in support of submission made by counsel. It was contended that Revenue has thought it fit to refuse exemptions now only for asst. yrs. 1977-78, which is anomalous situation and betrays inconsistency on its part. Departmental Representative, on other hand, submitted that ITO had adopted different approach for refusing exemption in year under appeal and referred to distinguishing features, when confronted with order of ITO granting exemption for asst. yr. 1978-79 , he pointed out that same ITO who has granted exemption in that year had now refused it while deciding appeal as AAC. assessee s counsel in reply submitted that so far as first feature about amendment of Trust Deed by resolution dt. 13th March, 1971 was concerned matter stands concluded in assessee s favour by decision of High Court in CIT vs. Rattan Trust (1980) 16 CTR (P&H) 38: (1980) 123 ITR 562 (P&H). Next he pointed out that assessment orders of year 1978-79 and 1979-80 were no doubt passed by Shri B. S. Sondhi, who has latter on decided appeal for asst. yrs. 1977-78 as AAC but orders for asst. yrs. 1980-81 and 1982-83 have been passed by three different ITOs, namely, S/Shri N. D. Wariah, Davindar Nath and O. P. Malhotra. He Submitted that Department should adopt consistent approach and not pick out one assessment year for opposite kind of approach. Having heard parties on this issue and aftger pressing papers placed before us, we are satisfied that it will be futile to go into second distinguishing feature brought out by ITO for assessment year under appeal, first one having already been decided against Revenue by High Court. ITOs in subsequent asst. yrs. 1978-79 to 1982-83 (and they have been four in number) have not thought it fit to follow ITO s view taken for asst. yr. 1977-78 and have held income of trust to be exempt. This on Department s own showing eloquently indicates strength in stand of ITO for asst. yr. 1977-78. It is in such situation that Courts have held that even though there is no res judicature in income-tax proceeding Revenue is nevertheless expected to act consistently in successive assessment years. consistency of this kind is desirable to save time, energy and expenditure for parties to litigation. It is indeed incongruous to hold that even though on same facts trust income is exempt for successive asst. yr. 1978-79 to 1982-83 and in proceedings asst. yr. 1978-79 to 1982-83 and in preceding asst. yrs. 1971-72 to 1976-77, it is not so for asst. yr. 1977-78. To encourage discussion and litigation on such issues will only mean avoidable harassment to assessee and to allow perpetuation of time and money consuming litigation for assessee. It should also be duty of Revenue to cut litigation and save public expenditure and time. It will be sufficient for us to allow appeal of assessee on principle of consistency and revenue s own conduct. We uphold assessee s claim for exemption of its income under s. 11 of IT Act and allow appeal. assessee had moved Stay Application but as to appeal itself is decided it has become infructuous and is dismissed as such. *** RATTAN TRUST (REGD). v. INCOME TAX OFFICER
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