JUDGMENT

Srikrishna, J.-These appeals arise out of the judgments of the High Court of Bombay dismissing the appeals filed by the Revenue under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as the Act ). Civil Appeal No.8211/2001 pertains to assessment year 1989-90 while Civil Appeal No.8212/2001 pertains to the assessment year 1990-91. Since the issues, fact and law are common, both the appeals are disposed of by this common judgment.

2. The respondent-assessee is incorporated as a Company limited by guarantee under the Companies Act, 1956 and is a non-profit service organization. For the assessment years 1989-90 and 1990-91 returns were filed by the assessee along with audited Income and Expenditure Accounts and Balance Sheets for the relevant previous years. The assessee claimed the benefit of Section 11 of the Act on the ground that it was an institution established wholly for charitable purposes within the meaning of Section 2 (15) of the Act and had been registered as such under Section 13 of the Act. The Assessing Officer (hereinafter referred to as the AO ) denied the benefit of Section 11 on two grounds. First, he held that the respondent-assessee wa