GOVENDA BHAT, C. J.

( 1 ) THIS is an appeal brought on behalf of the Additional Commissioner of income-Tax, Karnataka, and the First Income Tax Officer, Mangalore Circle, mangalore, against the order made in WP. 597 of 1973 by Venkata- ramiah, J, by which the learned Judge allowed the writ petition filed by the respondent herein and directed the Commr of Income-Tax to dispose cf the proceedings initiated by him under S. 263 of the Income-Tax Act, 1961, hereinafter called 'the Act', in the light of the interpretation of S. 11 of the Act made in the said order.

( 2 ) THE relevant facts in brief are: 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 Sec. 11 (1) (a) and sub- sec (2) of the said section. On the Assessing Authority holding that the assessee is not a genuine Trust and therefore not entitled to claim the benefit of Section 11, the assessee prefe

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