Judgement

S. B. MAJMUDAR, J.:- This appeal by special leave is directed against the decision of the Division Bench of the Karnataka High Court in Writ Appeal No.864 of 1974 decided on 4th September 1975. The said writ appeal, moved on behalf of the Revenue by Additional Commissioner of Income-tax, Mysore and First Income Tax Officer, Mangalore Circle, Mangalore against the order of learned Single Judge Venkataramiah, J., as he then was, in the Writ Petition No. 597 of 1973 came to be dismissed by the Appellate Bench of the High Court. In order to highlight the grievance of the Revenue in this appeal a few relevant introductory facts are required to be noted.

Background Facts.

2. Respondent A.L.N. Rao Charitable Trust, Mangalore, is a charitable trust. For the assessment year 1969-70, the respondent, hereinafter referred to as "the assessee" submitted its Return to the First Income-tax Officer, Mangalore Circle. In the said Return, the assessee claimed that a sum of Rs. 85,262/- which was the surplus income of the previous year, was exempt from tax under Section 11(1)(a) and sub-section (2) of the said Section. On the Assessing Authority holding that the assessee is not a genuine Trust