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Issues involved: Determination of whether the respondent-assessee, a trust created in 1958, qualifies as a public charitable and religious trust for tax exemption under section 11 of the Income-tax Act, 1961.
Summary: In the present case, the Income-tax Appellate Tribunal referred the question of whether the respondent-assessee qualifies as a public charitable and religious trust for tax exemption under section 11 of the Income-tax Act, 1961. The trust was created in 1958 with various charitable objects including providing monetary help, financial assistance for education and businesses, medical aid, social welfare, and more to the Vaisya community. Initially, the Income-tax Officer granted exemption under section 4(3) of the Indian Income-tax Act, 1922, but later, the Commissioner of Income-tax set aside this decision stating that certain objects of the trust were not charitable. The Appellate Tribunal dismissed the appeal as the assessee conceded that some objects were not charitable. However, in a subsequent assessment year, the Appellate Tribunal reversed its decision based on a Supreme Court ruling that objects beneficial to a section of the public can constitute charitable purposes. The High Court agreed with the Tribunal, stating that the trust's objects, including providing help on marriage occasions, were indeed charitable and religious in nature. The Court held that the earlier decisions were not binding as they were based on concessions and outdated rulings, and concluded that the assessee qualifies as a religious and charitable trust entitled to exemption under section 11 of the Act. Therefore, the High Court answered the question in the affirmative, in favor of the assessee, ruling that the trust is entitled to tax exemption under section 11 of the Income-tax Act, 1961.
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