Commissioner Of Income-Tax v. Sree Narayana Chandrika Trust.

The Judgment of the Court was delivered by

T.L Viswanatha Iyer, J.:— These cases before us relate to the assessments made on the respondent-assessee for the assessment years 1977–78 to 1982–83. We shall state the facts in Income-tax References Nos. 253 to 256 of 1985 and apply the decision therein to the other cases, as was done by the Appellate Tribunal in the appeals before it.

2. These references are at the instance of the Revenue under section 256(1) of the Income-tax Act, 1961 (“the Act”), with two questions raised by the assessee as well. They relate to the assessment years 1977–78 and 1979–80 for which the accounting periods are the years ending March 31 of 1977 and 1979. The question raised by the Revenue for these years reflect the scope of the dispute between the parties for the subsequent years as well, which we shall deal with later, namely, whether the assessee is entitled to the exemption under section 10(22A) of the Act. The two questions raised by the assessee relate to its claim for exemption under section 11 of the Act, which was negatived by the Tribunal in the view that clauses (bb) and (c) of sub-section (1) of section 13 were attracted to the case and, therefore, the assessee was not entitled to exemption under section 11. The question of exemption under section 11 does not arise for any of the subsequent years, where the claim was limited only to section 10(22A). The questions referred are as follows:

“1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee-trust was established for the purposes mentioned in section 10(22A) of the Income-tax Act, 1961, and that it will be an institution entitled to claim exemption in respect of its income under the said section?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right, in any case, in holding that the assessee-trust is an institution entitled to claim exemption in respect of its income under section 10(22A) of the Income-tax Act, 1961, with regard to the assessment year 1977–78?

3. Whether, on the facts and in the circumstances of the case, the Tribunal was right, in any case, in holding that the entire income of the assessee-trust, including the income from the firms in which the assessee was a partner, is entitled to exemption under section 10(22A) of the Income-tax Act, 1961?

At the instance of the ass (sse):

4. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee-trust was carrying on business, that the business was not being carried on in the course of carrying out the primary object; of the trust, that section 13(1)(bb) of the Income-tax Act, 1961, is attracted in the case of the assessee and that the assessee is not, therefore, entitled to exemption in respect of its income under section 11 of the said Act?

5. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that section 13(1)(c) of the Income-tax Act, 1961, is attracted in the case of the assessee-trust and that the assessee-trust is not entitled to exemption in respect of its income under section 11 of the said Act?”

3. The assessee is a charitable trust constituted under a deed of trust dated March 15, 1972, by Sri C.F Kesavan Vaidyar, his wife and two sons. The objects of the trust are set but in clause 3 of the deed of trust, and as it originally stood, it included establishment, maintenance, development and improvement of hospitals, vaidyasalas, dispensaries, etc., besides other objects like establishment, maintenance, development and improvement of educational institutions, hostel, boarding houses, library, reading rooms, etc. The objects clause was, however, amended by a resolution of the board of trustees held on November 30, 1977, which was approved by the Commissioner of Income-tax on july 6, 1978. After the amendment, which took effect on November 30, 1977, the clause read as follows:

“To establish, maintain, develop and improve hospitals and other institutions for the receipt and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persops during convalescence or of persons requiring medical attention or rehabilitation existing solely for philanthropic purposes and not for purposes of profit.”

4. In effect, the amendment was to bring the objects clause strictly in accord with section 10(22A) of the Act and thereafter the object of the trust was only the establishment and running, etc., of hospitals. We may mention here itself that the assessee-trust has not, after its constitution, embarked on any object other than the est esablishment and running of a hospital, at any time, and all its funds were beng utilised only for that purpose. That this fact was not in dispute has been recorded by the Tribunal in more than one place in its order in paragraphs 9.4, 9.8, 10.2 and 10.3 This has also been admitted in paragraph 4 of the enclosure to the Commissioner's application for reference.

5. The foundation for a hospital to be run by the trust was laid in 1973 and it was opened on April 25, 1978. For the purpose of augmenting the income available for the purpose of the hospital, the trust became a partner in three firms, namely, Beena Enterprises, Coimbatore, from April 1, 1972, Chandrika Agencies, Bangalore, from April 1, 1976, and Chandrika Enterprises, Irinjalakuda, from July 1, 1976. The trust, however, ceased to be a partner in Chandrika Agencies, Bangalore, before March 31, 1979, though it continued in the other two firms. The Tribunal has found as a fact that the trust joined the firms as partner only to raise income for the purpose of running the hospital and that the share income is being held in trust only for running the hospital.

6. The assessee claimed exemption from assessment both under section 10(22A) and section 11. The claim under section 11 was negatived because of the provisions contained in section 13(1)(bb) and section 13(1)(c) to which the questions raised by the assessee relate. We are not entering into the details of this claim as the matter stands concluded against the assessee by the decision in its own case for the prior years 1975–76 and 1976–77 in CIT Sreenarayana Chandrika Trust, [1994] 207 ITR 108 : [1993] KLJ (Tax Cases) 644, to which one of us was a party. The two questions referred at the instance of the assessee have, therefore, to be answered in favour of the Revenue.

7. The main dispute between the parties centred on whether the assessee is entitled to exemption under section 10(22A) of the Act. As mentioned earlier, the income of the trust from the firms was being utilised only for the purposes of the hospital for putting it up and equipping it in the first instance and thereafter for its running. The Income-tax Officer rejected the claim for exemption under both the sections, which was affirmed by the Commissioner (Appeals). But the Tribunal allowed the claim under section 10(22A), (though not under section 11), after an elaborate consideration of the facts and the law on the point. The Tribunal held that the trust was an institution existing for the purposes mentioned in section 10(22A) which could claim exemption of all its income from tax, and not merely of the income from the hospital run by it. It is this finding that is under challenge in these references.

8. Section 10(22A) provides that in computing the total income of a previous year of any person, any income of a hospital or other institution for the reception and treatment of persons suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic Purposes and not for purposes of profit shall not be included. This is akin to section 10(22) which excludes from levy the income of a university or other educational institution existing only for educational purposes and not for purposes of profit. The object with which section 10(22A) was introduced is explained as follows in the Notes on Clauses to the Finane Bill, 1970 (see [1970] 75 ITR (St.) 70):

“Sub-clause (b) seeks ta insert a new clause (22A) in section 10 of the Income-tax Act. The effect of the proposed amendment will be that the income of hospitals or oth?r medical institutions will be completely exempt from tax, notwithstanding that such income is not fully spent during the year in which it is earned.”

9. The Memorandum explaining the provisions of this Bill explains the matter further (see [1970] 75 ITR (St.) 93):

“34. Exemption from tax of the income of hospitals and other medical institutions.— At preser t, universities and other educational institutions existing solely for educational purposes and not for purposes of profit enjoy complete exemption from tax on their incomes. However, in the case of hospitals and similar other institutions for treatment of illness, there is no specific exemption from tax unlike in the case of universities. Medical institutions come under the category of charitable institutions and have to satisfy the conditions relating to application of not less than 75 per cent, of their current incomes to their objects in the same year in order to qualify for exemption from tax on the remainder which is accumulated. In the context of tie modifications proposed in the provisions relating to the exemption from ax of the income of charitable and religious trusts and institutions (vide paragraphs 18.1 to 18.5 of this Memorandum), it is proposed to make a specific provision for exempting from tax the income of hospitals and other medical institutions which exist solely for philanthropic purposes and not for purposes of profit. The provision, as proposed, will cover also institutions for treatment of mental defectiveness as also those for treatment of persons during convalescence or of persons requiring medical attention or rehabilitation. The income of all these categories of institutions will be exempt from tax altogether, as in the case of universities and other educational institutions at present.”

10. Relevant portions of Circular No. F. No. 194/16-17II(A1) issued by the Central Board of Direct Taxes may also be usefully extracted to discern the precise scope of the exemption under sections 10(22) and 10(22A):

“3. The question for consideration is whether an educational institution existing solely for educational purposes but which shows some surplus at the end of the year is eligible for this exemption. If the profit of the educational institution can be diverted for the personal use of the proprietor thereof, then the income of the educational institution will be subject to tax. However, there may be cases where the educational institutions may be owned by trusts or societies to whom the provisions of section 11 may be applicable. Where all the objects of these trusts are educational, and the surplus, if any, from running the educational institution is used for educational purposes only, it can be held that the institution is existing for educational purposes and not for purposes of profit. However, if the surplus can be used for non-educational purposes, it cannot be said that the institution is existing solely for educational purposes and such institutions will not be eligible for exemption under section 10(22). But, in such cases, the applicability of section 11 can be examined and if the conditions laid down therein are satisfied, the income will be exempt under section 11.

4. What has been stated in respect of educational institutions will equally apply to hospitals and other institutions referred to in section 10(22A). In the case of hospitals and similar institutions, if the surplus is used for philanthropic purposes, the income of the institution will be eligible for exemption under section 10(22A). It is not necessary that the surplus should be used for medical purposes only.”

11. This gives the backdrop of the exemption and its scope and purpose. It is manifest that the object was to exempt the income of hospitals and similar institutions from the levy of tax, even if any surplus was derived, provided the surplus was used for philanthropic purposes, which need not be medical purposes. In other words, what was intended was a benefit to hospitals and to trusts or societies running them, provided the institution was not one run for profit. We may reiterate here that the Department has no case that the hospital run by the assessee-trust is one run with the motive of profit.

12. The first question that arises for consideration is whether the assessee-trust could claim to be a hospital or other institution falling within the purview of section 10(22A). Senior standing counsel for the Revenue would find a dichotomy between the trust and the hospital, and according to him, the trust which is running the hospital is different from it, despite the fact that the trust has not indulged in any activity other than running the hospital. We need hardly say that these contentions are stoutly refuted by cotmsel for the assessee.

13. We have already pointed out that this section is analogous to section 10(22) which relates to educations 1 institutions and, therefore, the decisions thereunder and the analogy of trusts or societies running educational institutions could usefully be referred to for deciding the point in issue. Before doing so, we remind ourselves again that the trust before us has been existing over the years solely for the purpose of establishing, developing and running its hospital, and the only activity in which it has been engaged is the running of the hospital. The terms of the deed of trust are clear that it has been created solely for philanthropic purposes and not for purposes of profit. There is also no case that any part of the income of the trust is distributed to any person, or that it is running the hospital with any motive of profit.

14. We may refer in the first instance to a decision of the Calcutta High Court in CIT v. Boon Foundation, [1985] 154 ITR 208, a case falling under section 10(22). The assessee was a registered society, whose sole existence was for educational purposes. During the previous year relevant to the assessment year 1973–74, the assessee had commenced activities connected with the imparting of educaticn and, for that purpose, it took all the necessary preliminary steps including purchase of books and periodicals. The educational activity as such was not started in that year. The assessee claimed exemption for its income under section 10(22) for the assessment years 1973–74 and 1974–75. The court held that if the institution exists solely for educational purposes the fact that the recipient or the owner of the income is a person other than the educational institution or university would not affect the position. The word “institution” is not defined in the Act. A society registered under the Societies Registration Act whose primary objects are to establish, support, manage or conduct schools, colleges, etc., would also come within the purview of an educational institution. If a society primarily engages itself in educational activities or runs (a school or college, it is entitled to claim the exemption under section 10(22). It is immaterial vhether the society itself is an educational institution or it runs an educational institution.

15. In rendering this decision, the Calcutta High Court referred to the decision of the Madras High Court in Addl. CIT v. Aditanar Educational Institution, [1979] 118 ITR 235, which was also a case of a society registered under the Societies Registration Act constituted to establish, run, manage or assist colleges, schools and other educational organisations existing solely for educational purposes. The assessee received donations from a trust. It started a college and utilised the entire donation for the college. The question was whether the assessee was an educational institution entitled to the exemption under section 10(22). The Departmental view was that this provision applied only to educational institutions as such and not to anyone else who might be financing the running of the institution. In that context, the High Court upheld the assessee's plea, holding that the purpose for which it had come into existence was education at the level of colleges and schools. In order to effectuate its objects, the assessee had necessarily to impart education only through the medium of a college consisting of professors and students. Unless a college itself is brought into existence by the professors, a college could ordinarily come into existence only by third parties. Therefore, it could not be said that the assessee was a mere financing body not coming within the expression “other educational institutions” in section 10(22). An educational society could be regarded as an educational institution if the society was running an educational institution. In holding so, the High Court rejected the further contention of the Revenue that the college which was the educational institution was incorporated as a separate registered body. In other words, the High Court equated the society which was running the educational institution with the educational institution itself inasmuch as the society existed only for educational purposes.

16. An analogous case is that in CIT v. Sindhu Vidya Mandal Trust, [1983] 142 ITR 633 (Ahmadi and Mankad JJ.), where the Gujarat High Court held that where the trust existed solely for educational purposes, and was running primary and secondary schools, such schools were part of the assessee-trust, which fell within the expression “other educational institutions” in section 10(22) entitled to exemption thereunder. Another similar case of a society running an educational institution and the society being thereby treated as an educational institution is CIT v. Academy of General Education, [1984] 150 ITR 135 (Kar). The assessee-academy was running many educational institutions and controlled and aided many others. It derived income from securities, properties and from other sources like dividends, interest, registration fees, donations, etc. The question was whether its income was exempt under section 10(22). The Division Bench of the Karnataka High Court, speaking through Jagannatha Shetty J (as he then was), upheld the assessee's plea and exempted the income from tax.

17. In Katra Education Society v. TTO, [1978] 111 ITR 420, a Bench consisting of D.M Chandrashekar and R.M Sahai JJ., of the Allahabad High Court held that there was no reason why an educational society cannot be regarded as an educational institution if that society was running educational institutions.

18. Agarwal Shihsha Samiti Truit v. CIT, [1987] 168 ITR 751 is an analogous decision of the Rajasthan High Court, rendered by J.S Verma C.J (as he then was) and Inder Sen Israri J. The assessee collected donations with the sole purpose of disbursing the same for educational institutions run under the auspices of one Agarwal Shiksha Samiti. The court held that merely because these educational institutions were not run and managed directly by the assessee-trust, it could not be stated that the assessee did not fulfil the requirements under section 10(22). Admittedly, the assessee collected money for purposes of education; it had no profit motive at all. Therefore, it was entitled to exemption under section 10(22).

19. The decision of the Andhra Pradesh High Court in Governing Body of Rangaraya Medical College v. ITO, [1979] 117 ITR 284 is in point. The governing body of the Rangaraya Medical College was a society registered under the Societies Registration A.ct to manage the college which had been started by another society, the Medical Educational Society, six years earlier. The college had not been formally transferred to the assessee, as the assessee was awaiting orders from Government on its application for exemption from payment of stamp duty aid registration charges. The assessee had collected compulsory donations of Rs. 12,000 per seat and the bank accounts and deposits were maintained in the name of the society itself and not in the name of the college. The objects of the society were widely worded, to manage the medical college and ancillary institutions and various others. The question was whether the society could claim exemption under section 10(22). Jeevan Reddy J., speaking for himself and Chinnappa Reddy J., held that the assessee society was not, different from the medical college. This, he said, despite the fact that the ownership of the college did not vest in the society and continued to be with the Medicial Educational Society. The court said that there was no distinction between the society and the college, and the society was an educational institution with no motive of private or personal profit. Merely because certain surplus arose from the society's operations, it could not be held that the institution was run for the purpose of profit so long as no person or individual was entitled to any portion of the said proiit and the said profit was utilised for the purpose and for the promotion of the objects of the institution. The income of the society was, therefore, exempt under section 10(22).

20. We must also refer to the decision of the Calcutta High Court in Birla Vidhya Vihar Trust v. CIT, [1982] 136 ITR 445, where Sabyasachi Mukharji J., speaking for the court, dealt with the question in all its elaboration. The assessee in that case was a charitable trust running educational institutions. The question was whether the trust could claim exemption as an educational institution in respect of the income it derived from the educational institutions. The question was answered in the affirmative with the observation that the condition precedent for claiming benefit under section 10(22) was that the university or the educational institution must exist solely for educational purposes and not for purposes of profit. If this condition is fulfilled, then the fact that the recipient or owner of the income is a person other than the educational institution or university would not affect the position.

21. The position is thus well established on the strength of these decisions that if a trust or society exists solely for educational purposes and it runs an educational institution, its income will be the income of the educational institution and, therefore, exempt under section 10(22). The fact that the assessee had other objects, will not disentitle it to the exemption so long as the activity carried on by it is that of running an educational institution and its activities are not for profit. The same ratio must apply to hospitals as well. The trust which is running the hospital and is existing solely for that purpose falls within the purview of section 10(22A) with exemption for its income, if the other requirements of the section are satisfied. It should be treated as the hospital itself, as it exists solely for the running of the hospital and not for any other purposes. In other words, the society cannot be dissociated from the hospital, which is run by it. They have to be treated as one and the same.

22. We now pass on to the next question as to whether the income derived by the trust as a partner of the firms in which it had made some investments for the purpose of augmenting the resources available for the hospital is exempt under section 10(22A). In this connection, it must be mentioned that if there is an integral unity between the trust and the hospital for purposes of section 10(22A), as held above, the amount invested belongs to the hospital and the income derived on such investment is also that of the hospital. A hospital is not merely the building in which it is housed, or the equipment that is contained in it, but something more. It is an institution, and that institution belongs to the trust. In dealing with the question whether the income is that of the hospital, the significance of fiie expression “any income of a hospital” in section 10(22A) has to be noted. In our opinion, both the words “any” and “of” carry a meaning. It is not income from, a hospital that is exempt but any income of a hospital. If the word had been “from”, the position would have been that the income should have been derived from the actual running of the hospital itself. What appears to be relevant is that the income should reach the hospital to be utilised by it for philanthropic purposes and not for purposes of profit. The stress at pears to be on the recipient of the income. If that is the hospital, that is the trust running it, section 10(22A) must apply. We may here refer with advantage to a decision rendered by this court in Commr. Of Income Tax v. St. Georgre Forane Church, [1988] 170 ITR 62, where this court said that the construction of a building by a religious institution, whose income was exempt under section 11, amounted to application of the income for purposes of section 11 and, therefore, exempt. Though not directly in point, the ratio of this decision must apply to the case on hand having regard to the use of the words “any” and “of” in section 10(22A). This view of ours is supported, inter alia, by the facts of the cases already referred to in Addl. CIT v. Aditcnar Educational Institution, [1979] 118 ITR 235 (Mad), where the donation rsceived by the trust was held to be exempt; CIT v. Academy of General Education, [1984] 150 ITR 135 (Kar), where the income sought to be exempted included income from securities, properties and from other sources like div dends, interest, registration fee, donations, etc.; Governing Body of Rangraya Medical College v. ITO, [1979] 117 ITR 284 (AP), where the income wis by way of compulsory contribution for seats in the college; and Agarwal Shiksha Samiti Trust v. CIT, [1987] 168 ITR 751 (Raj), where the receipts were by way of donations.

23. In Aditanar Educational Institution's case, [1979] 118 ITR 235, it was observed by the Madras High Court that a society by merely running an educational institution cannot utilise the provision in section 10(22) as an instrument for exemption in respect of all its sources of income which had ho connection with its educational activity and that there must be some correlation between the income earned and the educational institution. At the same time, it was not possible to lay down in precise terms as to what would be the income of the educational institution which will be exempt. That will depend on the facts of each case.

24. In Birla Vidhya Vihar Trust's case, [1982] 136 ITR 445 (Cal), the court expressed the opinion that the word “of” in section 10(22) envisaged the source, that is to say, the generation of a particular type of income or the source of a particular type of ncome. It was thus held that it is not the entirety of the income of the recipient—the trust—but the income of the particular source, namely, the educational institution in that case, that fell within the purview of section 10(22).

25. As noted by us, the various types of income had been held exempt under section 10(22) if they were utilised for the purposes of the educational institution. Particularly in Academy of General Education's case, [1984] 150 ITR 135 (Kar), the income assessed was of varied character and from various sources.

26. The emphasis, in our opinion, is not on whether the income was derived from the educational institution or hospital itself, but on the purpose for which the institution, trust or society was existing and utilising the income. Such an interpretation will subserve the object of the two provisions of clauses (22) and (22A) which appears to be to foster the growth of educational institutions and hospitals existing solely for such purposes and not for profit.

27. There was a feeble argument raised by standing counsel that the assessee was not utilising the income for the hospital purposes. But this argument fails in the light of the admission made by the Commissioner himself in his application for reference that the entire income of the assessee was utilised only for the hospital purposes.

28. One subsidiary question requires to be considered and this arises for the years 1977–78 and 1978–79. During the accounting periods relevant to these years, the hospital was under construction and became functional only on April 25, 1978. The question, therefore, arises whether the income of the assessee-trust during these years is exempt, as there was no hospital as such in existence during that period. Counsel for the assessee referred to the decisions in Boon Foundation's case, [1985] 154 ITR 208 (Cal) and Secondary Board of Education v. ITO, [1972] 86 ITR 408 (Orissa). In both these cases, the income derived at the preliminary stages of the establishment of the educational institutions concerned was held entitled to the exemption. In Doon Foundation's case, [1985] 154 ITR 208 (Cal), the assessee had only taken the preliminary steps towards the running of a teaching course; and the income derived during this period was held to be that of an educational institution. In the other case, Sexondary Board of Education's case, [1972] 86 ITR 408 (Orissa) had a fund constituted under the Orissa Secondary Education Act, 1953. One of the sources of the income of the Board was the profits from compilation, publication and printing and sale of text books. The income was to be utilised towards development and expansion of educational purposes and the surplus, if any, was to form part of a sinking fund to be devoted to the cause of education as and when necessary. The income derived from the activities mentioned above was treated as that of an educational institution and exempted.

29. We may advert to a decision of the Karnataka High Court which is apposite, Mangilal Gotawat Charitable Trust v. CIT, [1984] 150 ITR 682. The court held that the expression “other institutions” in section 10(22A) does not necessarily mean that patients must be admitted and treated as in-patients or that there must be facilities for such treatment in the institution for claiming the benefit of section 10(22A).

30. The works related to the hospital of the assessee were started in the year 1973 though it became functional as a hospital only on April 25, 1978. All the activities in the meanvmile were geared to the establishment of the institution and its functioning as a hospital and, therefore, we are of the view that the income derived during the period was also the income of the hospital entitled to exemption. We may note that adoption of any other view of the matter will be to syphon off the income required for the starting of a hospital by way of tax, thereby depleting the resources available to the institution, defeating the very object behind section 10(22A).

31. The result of the above discussion is that the Tribunal was justified in holding that the assessee was entitled to the exemption under section 10(22A) for the years 1977–78 ind 1979–80 and that it was not entitled to any benefit under section 11 b?cause of the operation of section 13(1)(bb) and section 13(1)(c).

32. We shall now deal with the other references and applications under section 256(2) which have been heard along with these references. The questions referred for the year 1978–79 are similar, except that one further question has been referred at ths instance of the assessee, namely, “whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the order of the Commissioner of Income-tax passed under section 263 is no barred by limitation”. We shall deal with this question which arises in Income-tax References Nos. 81 and 82 of 1986 relating to this year.

33. The Income-tax Officer made an order of assessment on January 12, 1981, holding that income accruing to the assessee-trust from the firms of which it was a partner was exempt under section 10(22A), as income accruing to the hospital, deviating from the stand taken by him earlier. The Commissioner of Incomejtax took up the matter in revision under section 263 and set aside the order of assessment. The revisional order was passed on January 11, 1983, and communicated within a period of six days thereafter. The question was whether the exercise of the revisional power was barred by time. The Tribunal held otherwise and sustained the order. It is in these circumstances that the additional question has been referred.

34. Sub-section (2) of section 263 as it stood at the relevant time, prescribed that no order shall ae made under sub-section (1) of the section after the expiry of two years from the date of the order sought to be revised. The Tribtmal was of the view that the Commissioner had passed his order within the time prescribed, though it was communicated later.

35. The question as to when an order can be stated to have been made was the subject of consideration by this court in Govt. Wood Workshop v. State Of Kerala, [1988] 69 STC 62 : [1987] 1 KLT 804 in which this court stated, after relying on various decisions of the Supreme Court culminating in B.J Shelat v. State of Gujarat, (1978) 2 SCC 202 : AIR 1978 SC 1109, as follows (at page 69):

“The order of any authority cannot be said to be passed unless it is in some way pronounced or published or the party affected has the means of knowing it. It is not enough if the order is made, signed, and kept in the file, because such order may be liable to change at the hands of the authority who may modify it, or even destroy it, before it is made known, based on subsequent information, thinking or change of opinion. To make the order complete and effective, it should be issued, so as to be beyond the control of the authority concerned, for any possible change or modification therein. This should be done within the prescribed period, though the actual service of the order may be beyond that period.”

36. The Tribunal has not referred to this decision though it is relevant. We feel that the matter has not been considered by the Tribunal in the manner in which it should have been, particularly after advertence to the aforesaid decision. We, therefore, decline to answer the additional question referred at the instance of the assessee in Income-tax References Nos. 81 and 82 of 1986.

37. The question involved in Income-tax References Nos. 25 and 26 of 1992 and 33 of 1993 is only regarding the entitlement of the assessee to exemption under section 10(22A). Our earlier discussion on the point will cover these references also. There are four applications under section 256(2) of the Act filed by the Commissioner, namely, Original Petitions Nos. 1283 of 1987, 12710 and 12712 of 1992 and 741 of 1994. These applications have been filed only to refer some supplemental questions challenging the applicability or otherwise of section 10(22A). We do not think it necessary to refer the questions to this court inasmuch as the questions raised are questions of fact. Further, we have dealt with the various aspects of the applicability or otherwise of section 10(22A) while dealing with the references and we do not feel it necessary to direct reference of any supplemental question in these applications which relate to the assessment years 1978–79 and 1980–81 to 1982–83.

38. The references and the original petitions are, therefore, disposed of as follows:

Original Petitions Nos. 128.5 of 1987, 12710 and 12712 of 1992 and 741 of 1994 are dismissed. The questions referred at the instance of the assessee in Income-tax References Nos. 253 to 256 of 1985 and 81 and 82 of 1986 relating to the exemption under section 11 are answered against the assessee and in favour of the Revenue. The questions referred at the instance of the Revenue in these matters as also in. Income-tax References Nos. 25 and 26 of 1992 and 33 of 1993 are answered against the Revenue and in favour of the assessee. We decline to answer the additional questions referred at the instance of the assessee in Income-tax References Nos. 81 and 82 of 1986. There will be no order as to costs.

39. Communicate a copy of this judgment under the seal of this court and the signature of the Registrar to the Income-tax Appellate Tribunal, Cochin Bench, for information.