M.M.Punchhi, J.

1. On the direction of this court under Section 256(2) of the I.T. Act, 1961, the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, has referred the following question of law for settlement:

" Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in upholding the order of the income-tax authorities denying exemption under Section 11(2) of the Income-tax Act, 1961, to the assessee on the ground that it had failed to give notice in Form No. 10 within the time prescribed by Rule 17 of the Income-tax Rules, 1962?"

2. The assessee is a trust. It came into existence on March 1, 1962. Up to the assessment year 1970-71, the trust used to derive income from donations and interest but in the succeeding year 1971-72, the assessment year relevant, the assessee had also income from property. In order to claim exemption under Section 11(2) of the said Act, the assessee in the first instance, filed an application on June 28, 1971 (annex. D with the statement), praying to the ITO that for the assessment year in question, return was to be filed before June 30, 1971, but time be extended uptill July 31, 1971. It attract