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CASE NO.: Appeal (civil)  4305-4306 of 2002

PETITIONER: Asstt. Commissioner of Income Tax, Surat

RESPONDENT: Surat City Gymkhana

DATE OF JUDGMENT: 04/03/2008

BENCH: ASHOK BHAN & DALVEER BHANDARI

JUDGMENT: JUDGMENT O R D E R

CIVIL APPEAL NOS.4305-4306 OF 2002

       The respondent-assessee claimed exemption under Section 10(23) of the Income-tax  Act, 1961 for the Assessment Years 1991-92 and 1992-93.  The said exemption was claimed  on the basis that the objects of the respondent-assessee are exclusively charitable.  The  assessing officer rejected the claim.  Appeals filed before the Commissioner of Income-tax  (Appeals) were also dismissed.  Aggrieved thereby, the assessee filed further appeals before   the Income Tax Appellate Tribunal (’the Tribunal’).  The Tribunal, by order dated 20th  January 2001, allowed the appeals filed by the respondent-assessee.  The appellant filed  appeals before the High Court of Gujarat.  The Revenue claimed that the following two  substantial questions of law arise from the order of the Tribunal :

"(A) Whether, on the facts and circumstances of the case, the Income Tax  Appellate Tribunal was justified in law in holding that the objects of the Trust  restricting benefit to the members of the Club would fall within the purview of  the act of "General Public Utility" u/s 2(15) of the Income Tax Act constituting  as a section of public and not a Body of Individuals?

C.A.Nos.4305-4306/02 .... (contd.)

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(B) Whether, on the facts and circumstances of the case, the Income Tax  Appellate Tribunal was justified in law in holding that Registration u/s 12-A  was a falt-accompli to hold the A.O. back from further probe into the objects of  the Trust?"

       By the impugned order, the High Court dismissed the appeals,  in limine, relying on  a  decision of the same Court in the case of Hiralal Bhagwati v. Commissioner of Income-Tax  2000 (246) ITR 188 = 2000 (161) CTR (Gujarat) 401 holding that the questions raised in  the appeals are covered by the aforesaid decision.           Being dissatisfied by the order of the High Court, the Revenue has filed these appea ls.           This Court, on 22nd July 2002, granted leave in respect of Question No.’B’ only.  Th e  appeals were not entertained in respect of Question No.’A’ and it was noted that the  appeals by the High Court were rightly dismissed insofar as Question No.’A’ is concerned  as the appellant did not challenge the correctness of the judgment in the case of Hiralal  Bhagwati (supra).         On a perusal of the judgment of the Gujarat High Court in the case of Hiralal Bhagwa

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ti  (supra), we now find that Question No.’B’ is also concluded by the said judgment [refer to  1st para of page 196].  Since the Revenue did not challenge the decision in the said case, t he  same has attained finality.  Question No.’B’, therefore, is to meet the same fate as Questio n  No.’A’ as  this Court  had declined to grant leave in respect of  

C.A.Nos.4305-4306/02 .... (contd.) - 3 - Question No.’A’ on the ground that the Revenue did not challenge the correctness of the  decision in the case of Hiralal Bhagwati (supra).  It appears that the fact, that Question  No.’B’ was also covered by the aforementioned judgment, was not brought to the notice of  their Lordship and, therefore, leave was granted restricted to question No.’B’.         In this view of the matter, these appeals deserve to be dismissed.  Ordered accordin gly.   No costs.