A.R. Tiwari, J.
1. These two miscellaneous civil cases are heard as connected matters and are being disposed of by this common order.
2. Miscellaneous Civil Case No, 335 of 1993.-At the instance of the Department, the Tribunal stated the case and referred the undernoted question, labelled as of law, on an application under Section 256(1) of the Income-tax Act, 1961 (for short 'the Act'), registered as R. A. No. 145/Ind. of 1992, arising out of the order dated May 25, 1992, passed by the Tribunal in I. T. A. Nos. 1053/Ind. of 1990 and 114/Ind. of 1991 for the assessment year 1987-88 :
' Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing the income of the assessee as exempt under Section 11 of the Income-tax Act, 1961 ?'
3. Miscellaneous Civil Case No, 31 of 1994.--The Department had filed the aforesaid application proposing three questions. By order dated March 30, 1993, passed on such application, registered as R. A. No. 145/Ind. of 1992 the Tribunal stated the case but referred only one question, as noted above. Thus two questions, questions Nos. 1 and 2 as proposed, were not accepted for reference to this court. To this extent the application was disallowed. Dissatisfied by this order to this extent, the Department took recourse to Section 256(2) of the Act and reiterated the same two questions for direction to the Tribunal to state the case and refer these two questions as well, as extracted below :
' 1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the income from conducting three draws of lottery through an agent is not business income of the assessee ?
2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the amount of Rs. 3 lakhs received by the assessee is not its income for the assessment year 1987-88 ?'
4. Briefly stated, the facts of the case are that the year of assessment is 1987-88, previous year ending on March 31, 1987. The assessee 'Indore Table Tennis Trust' is a public charitable trust registered under Section 12A of the Act. It received grant-in-aid of Rs. 10 lakhs in the instant assessment year 1987-88 from the Government of Madhya Pradesh for construction of stadium for indoor games. The said amount of Rs. 10 lakhs as also the donation of Rs. 88,301 and interest income of Rs. 64,948 were treated by the Assessing Officer as income of the trust. The assessee was held disentitled to the benefit of Section 11 of the Act. The Assessing Officer passed the order of the assessment on March 29, 1990 (annexure 'A'). On appeal, the Commissioner of Income-tax (Appeals) concluded that the assessee was entitled to exemption under Section 11 of the Act. He reached this conclusion on the assumption that Section 13 of the Act nowhere stated that exemption could be withdrawn for contravention of any of the provisions of any law. He, therefore, held that withdrawal of exemption on the ground that the assessee had contravened the provisions of the M. P. Lottery (Niyantran Tatha Kar) Adhiniyam, 1973, and the provisions of the Income-tax Act (by failure to deduct T. D. S.) was not in conformity with law (annexure 'B'). The order of the Commissioner of Income-tax (Appeals) dissatisfied both the parties. The assessee filed I. T. A. Nos. 1053/Ind. of 1990 and 894/Ind. of 1991 for the assessment years 1987-88 and 1988-89, whereas the Assistant Commissioner of Income-tax filed I. T. A. Nos. 114 and 1075/Ind. of 1991 for the assessment years 1987-88 and 1988-89. By common order dated May 25, 1992, I. T. A. Nos. 1053/ Ind. of 1990 and 894/Ind. of 1991, presented by the assessee, were allowed and I. T.A. Nos. 114 and 1075/Ind. of 1991, presented by the Assistant Commissioner of Income-tax were dismissed. On an application of the Commissioner of Income-tax, Bhopal, registered as R. A. No. 145/Ind. of 1992, arising out of the order dated May 25, 1992, passed in I. T. A. No. 1053/Ind. of 1990 and I. T. A. No. 114/Ind. of 1991 for the assessment year 1987-88, the Tribunal stated the case and referred the aforesaid solitary question of law. The Commissioner of Income-tax, Bhopal, filed application under Section 256(2) of the Act on partial rejection of the application, R.A. No. 145/Ind. 1992, arising out of the order passed in the aforesaid two appeals reiterating and proposing the remaining two questions unaccepted by the Tribunal for reference.
5. We have heard Shri A. M. Mathur, learned senior counsel with Shri Vivek Sharan, for the applicant/Department and Shri S. C. Bagdiya, learned senior counsel with Shri Pankaj Bagdiya, for the non-applicant/assessee, in both these miscellaneous civil cases.
6. It is not disputed before us that exemption from payment of tax was available to the assessee. The Assessing Officer proceeded on the linchpin that there was sufficient justification to withdraw the exemption. The position of law is not in tenebrosity. The conditions under which exemption is not available to a particular income are chronicled in Section 13 of the Act. The Commissioner of Income-tax (Appeals) considered the position of law and concluded that exemption from payment of tax was not liable to be withdrawn on the ground of contravention of the provisions. The assessee was thus allowed the benefit of exemption under Section 11 of the Act.
7. It is trite law that exemption once earned is not lost lightly. In Mangalore Chemicals and Fertilisers Ltd. v. Deputy CCT : 1993ECR23(SC) , it is held that eligibility once earned is not lost by any alteration via subsequent notification. It is also held that for disentitlement the violation of condition must be substantive.
8. Firstly, there is no proof of any contravention, secondly, the assessee cannot be denied the benefit of promissory estoppel as well. In Kasinka Trading v. Union of India : 1994ECR637(SC) , it is held as under (page 878) :
' The doctrine of promissory estoppel or equitable estoppel is well established in the administrative law of the country. To put it simply, the doctrine represents a principle evolved by equity to avoid injustice. The basis of the doctrine is that where any party has by his word or conduct made to the other party an unequivocal promise or representation by word or conduct, which is intended to create legal relations or effect a legal relationship to arise in the future, knowing as well as intending that the representation, assurance of the promise would be acted upon by the other party to whom it has been made and has in fact been so acted upon by the other party, the promise, assurance or representation should be binding on the party making it and that party should not be permitted to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings, which have taken place or are intended to take place between the parties.'
9. The Commissioner of Income-tax (Appeals) and the Tribunal both on appreciation of facts concluded that the assessee was entitled to the benefit of exemption under Section 11 of the Act. The conclusion is not shown to be perverse. In fact the question proposed is not of perversity at all. They reached the conclusion that there was no contravention of any of the provisions of the M. P. Lottery Adhiniyam and as such the assessee-trust was entitled to the benefit of Section 11 of the Act. The Tribunal also reached the conclusion that the grant-in-aid of Rs. 10 lakhs was towards the corpus of the trust and it could not be treated as income of the trust. Nothing substantial is urged to demolish the conclusion.
10. In the result, we find that the question referred to in Miscellaneous Civil Case No. 335 of 1993 merits to be answered in the affirmative, i.e., in favour of the assessee and against the Department.
11. Coming to the remaining two questions proposed in Miscellaneous Civil Case No. 31 of 1994, we find that the lottery was organised by the assessee through its sub-committee to whom this job was assigned. Income of Rs. 3 lakhs was earned from organization of the lottery. In 1986-87, the said amount was received by the sub-committee on March 22, 1986. It was reflected in the balance-sheet of the trust for 1987-88. On appreciation of these facts, the Tribunal reached the finding that the said amount of Rs. 3 lakhs was, though reflected in the balance-sheet of the trust for the assessment year 1987-88, was in fact received by the sub-committee on March 22, 1986, and as such it was the income of the trust for the assessment year 1986-87 and not for the assessment year 1987-88. The Tribunal was thus justified in holding that the income from conducting three draws of lottery through agent was not the business income of the assessee. The Tribunal held on appreciation of facts that it cannot be said that to organise the lottery was the business of the assessee. There was no continuous and systematic exercise of such an occupation or profession. The Tribunal was, therefore, justified in holding that the income from conducting three draws of lottery through an agent was not the business income of the assessee and was also correct in its conclusion that the amount of Rs. 3 lakhs received by the assessee was not its income for the assessment year 1987-88 as the amount was received on March 22, 1986, for the assessment year 1986-87.
12. The Tribunal declined to refer these two questions because the conclusion was based on appreciation of facts and there was no question of any legal acrobatics.
13. In CIT v. Ashoka Marketing Ltd. : [1976]103ITR543(SC) , and in CIT v. Kotrika Venkataswamy and Sons : [1971]79ITR499(SC) , it is held that a conclusion based on appreciation of facts does not give rise to any question of law.
14. Section 11 of the Act pertains to income from property held for charitable or religious purposes and details the income excludible from the total income and Section 13 of the Act provides the instance where Section 11 is held inapplicable. The Commissioner of Income-tax (Appeals) and the Tribunal held that Section 13 was not applicable and as such the benefit under Section 11 was available.
15. In view of the aforesaid position, we hold that there are no referable questions of law as proposed in Miscellaneous Civil Case No. 31 of 1994, and that the Tribunal committed no error in refusing to refer the same and in deciding about Section 11.
16. Accordingly, we dispose of these two miscellaneous civil cases as under :
(a) Miscellaneous Civil Case No. 335 of 1993 is disposed of by answering the question in the affirmative, i.e., in favour of the assessee and against the Department.
(b) Miscellaneous Civil Case No. 31 of 1994 is dismissed on the conclusion that it did not contain any referable questions of law.
17. These miscellaneous civil cases are thus disposed of in the terms indicated above but without any orders as to costs.
18. Counsel fee in each case for each side is, however, fixed at Rs. 750, if certified.
19. Transmit a copy of this order to the Tribunal relatable to reference dated March 30, 1993, on R. A. No. 145/Ind. of 1992.
20. Retain this order in the record of Miscellaneous Civil Cases No. 355 of 1993 and place its copy in the record of Miscellaneous Civil Case No. 31 of 1994 for ready reference.