Commissioner of Income-tax Vs. Gulraj Educational Trust - Court Judgment

Excerpt:
- section 13: [altamas kabir & cyriac joseph,jj] custody of child - welfare of child vis--vis comity of courts - the minor girl child of 3 1/2 years was brought to india by her mother. the minor girl was a citizen of u.k. being born in u.k. her parents had set up their matrimonial home in u.k. and had acquired status of permanent residents of u.k. the child with her mother was supposed to return to u.k. but the mother cancelled her tickets and remained behind in india. the husband thereupon started procededings before the high court of justice, family division. u.k. praying for an order that the minor child be made a ward of the court and for a direction upon the wife to return the minor child to the jurisdiction of the said court. a further direction was given for the passport and other international travel documents of the minor child to be handed over to the solicitors of the husband. a petition seeking protection of minor child was thereupon filed by father of the husband before delhi high court. a direction for handing over custody of child to father of husband was also sought. the high court considering fact that the u.k. court was already in seisin of matter and had passed an interim order and by relying on principle of comity of nations and comity of judgments of the courts of two different countries in deciding the matter directed the wife to take the child of her own to u.k.or hand it over to father of husband to be taken to u.k. as measure of interim custody and that it would be for the u.k. court to decide the question of custody - order was challenged by wife - held, the order of high court was not liable to be interfered with. although, on first impression, it would appear that the interests of the minor child would best be served if she is allowed to remain with the wife, the order of u.k. court cannot be lost sight of., the order of u.k. court except for insisiting that the minor be returned to its jurisdiction, the english court did not intend to separate the child from the mother until a final decision was taken with regard to the custody of the child. the ultimate decision in that regard has to be left to the english court having regard to the nationality of the child and the fact that both the parents had worked for gain in the u.k. and had also acquired permanent resident status in the u.k. english court has not directed that the custody of the child should be handed over to the father but that the child should be returned to the jurisdiction of the courts in the u.k. which would then proceed to determine as to who would be best suited to have the custody of the child. the high court has taken into consideration both the questions relating to the comity of courts as well as the interest of the minor child, which, no doubt, is one of the most important considerations in matters relating to custody of a minor child. - 2. the question of law stated to be arising out of the order of the appellate tribunal and sought to be referred is as under :whether, on the facts and in the circumstances of the case as well as in law, the tribunal was justified in allowing exemption under section 11 of the income-tax act though there were infringements of section 13(1)(a) of the act ?' 3. the petitioner is a trust registered under section 12a of the income-tax act, 1961 (for short 'the act'). the trust was created prior to the commencement of the act.d.p. wadhwa, j.1. by these six different petitions, the commissioner of income-tax, delhi vi, new delhi, wants this court to direct the income-tax appellate tribunal (for short 'the appellate tribunal') to state the case and refer it to this court for its decision. since the contentions are common in all these petitions, these are being disposed of by a common order. 2. the question of law stated to be arising out of the order of the appellate tribunal and sought to be referred is as under : 'whether, on the facts and in the circumstances of the case as well as in law, the tribunal was justified in allowing exemption under section 11 of the income-tax act though there were infringements of section 13(1)(a) of the act ?' 3. the petitioner is a trust registered under section 12a of the income-tax act, 1961 (for short 'the act'). the trust was created prior to the commencement of the act. the income-tax officer made assessments in respect of all these years on varying amounts of total income, though, as noted above, the contentions raised were the same. the income-tax officer denied exemption to the petitioner under section 11 of the act because of infringement of certain provisions of section 13 of the act. the assessed appealed to the appellate assistant commissioner of income-tax. this appeal was allowed as the learned appellate assistant commissioner was of the view that the relevant provisions of section 13 were inapplicable as the trust was created or established prior to the commencement of the act. then, the revenue appealed to the appellate tribunal. the appellate tribunal upheld the order of the appellate assistant commissioner. the revenue then filled an application under section 256(1) of the act seeking to refer the aforementioned question of law for the decision of this court. this was also rejected by the appellate tribunal. 4. the income-tax officer found that the assessed made deposits and investments in concerns in which persons specified in sub-section (3) of section 13 of the act were substantially interested. he also found that neither the interest was adequate nor the deposits were secured as required under section 13(2)(a) and section 13(2)(h) of the act were not applicable as the deposits and investments were made prior to june 1, 1970, was not found acceptable. the assessed had relied upon the second proviso to clause (c) of section 13(1) of the act. under this proviso, benefit derived by persons referred to under to sub-section (3) of section 13 prior to june 1, 1970, in the case of charitable trusts created before the commencement of the act was saved from denying exemption under section 11 of the act. 5. it cannot be disputed that a question of law does arise in the present case though the appellate tribunal was of the view that since it was possible to have two interpretations on the second proviso to section 13(1)(c)(ii) of the act, it should be interpreted in favor of the assessed. reference was also made to the decisions of the calcutta and bombay appellate tribunals. 6. it was submitted before us by mr. gupta, learned counsel for the revenue, that the gujarat high court in cit v. insaniyat trust : [1988]173itr248(guj) had taken a view different from the one taken by the appellate tribunal in the present case. 7. mr. aggarwal, learned cousel for the assessed, stated that the proposed question did not arise out of the order of the appellate tribunal. he said there was no finding that there was any infringement of section 13(1)(a) of the act. he appears to be right in his submission but then it does appear to us that there was a mistake in setting out the question. the high court has power to recast or amend the question. the high court has power to recast or amend the question so as to bring out the real controversy between the parties. in fact, this can be done even at the time of deciding the reference. 8. it is not necessary to set out the details of the controversy at this stage. it does, however, appear to us that a question of law arises out of the order of the appellate tribunal. the question can be set out as under : 'whether, on the facts and in the circumstances of the case, the appellate tribunal was justified in allowing exemption under section 11 of the income-tax act, 1961, though there was infringement of the provisions of section 13 of the act ?' 9. we would, thereforee, require the appellate tribunal to state the case and refer it to this court for decision.