HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income Tax-I, Coimbatore v. M/s. G.R. Govindarajulu & Sons
Civil Appeal No. 4916 of 2006
[2015] 9 SCR 289 ·
11(1)(a) · 11(1) Explanation (2) · 11(2) · 11(5)
Sources & disclosures includedDownload original judgment / order
Two-judge bench · A.K. Sikri, J. · R. F. Nariman, J.
Assessment years: 1994-95
01 · Facts of the case
The respondent, described in the judicial narrative as a public charitable trust, returned nil taxable income for AY 1994-95. It disclosed gross income of Rs. 99,41,221 from interest, rent, bus collections, miscellaneous receipts and GRS hotel surplus. It had actually applied Rs. 47,27,533 for its objects and stated in the return that Rs. 32 lakh was set apart for charitable expenditure in the following year (paragraph 1).
The Assessing Officer allowed the actual expenditure but rejected the set-apart claim because no option had been exercised before filing the return. No amount had been invested in government securities. The Commissioner (Appeals) accepted the return itself as an exercise of option; the Tribunal and Madras High Court upheld that approach. Revenue appealed from the High Court's 7 September 2004 decision in Tax (Appeal) No. 561/2004 (paragraphs 5-8; jurisdiction entry).
Source: reported judgment / paragraphs 1; 5-8 / PDF pages 2, 9, 10 / judicial text
02 · Discussion by the Hon’ble Court
The Court set out section 11 and reproduced the A.L.N. Rao explanation of the relationship between actual application, the basic accumulated-income exemption and the further relief available on compliance with section 11(2). It summarised the treatment in three stages: expenditure for charitable objects; setting apart up to 25% of total income in the historical case; and further relief to the extent of the specified qualifying investment. The Rs. 47,27,533 already spent and allowed was undisputed (paragraphs 2-5).
On the mode of exercising the option, the Court agreed with the assessee. As the law in issue prescribed no specific mode, stating the option when filing the return satisfied the requirement. The Assessing Officer's insistence on a separate earlier exercise could not stand (paragraphs 6-8).
That procedural success did not justify the whole quantum allowed below. The Court applied 25% to gross income of Rs. 99,41,221 and stated the resulting amount as Rs. 24,85,305. The Rs. 32 lakh claim exceeded that limit. Given the recorded absence of government-securities investment for further relief, the whole income could not be treated as exempt. The Court distinguished validity of the option from the amount deductible/exempt under the provisions it applied (paragraphs 6, 9).
03 · Judicial decision
Revenue's appeal was allowed and the High Court order was set aside. The Assessing Officer was directed to recompute taxable income consistently with the judgment: retain the undisputed Rs. 47,27,533 actually applied and the historical 25% set-apart relief of Rs. 24,85,305 stated by the Court, rather than exempting the whole Rs. 32 lakh set apart or the entire income. The finding that the return validly exercised the option remained favourable to the assessee. The Court did not itself state a final taxable-income figure (paragraphs 8-10).
Source: reported judgment / paragraphs 8-10 / PDF pages 10, 11 / judicial text
04 · Outcome / in whose favour
In whose favour: Revenue on excessive exemption and recomputation; assessee on validity of the option in the return
Revenue civil appeal allowed; High Court order set aside; Assessing Officer directed to recompute
Legal and quantum limits resolved; consequential computation left to the Assessing Officer
Not a rejection of the option in the return and not a direction to disallow the actual charitable expenditure. The historical percentage and procedure concern AY 1994-95; the Court states no final taxable-income figure.
Source: reported judgment / paragraphs 4-10 / PDF pages 9, 10, 11 / judicial text
05 · AKHB REVIEW POINT
Track validity of an election separately from the amount it supports. The assessee succeeded on making the option in its return but lost on exemption beyond the ceiling applied to its facts. A case label showing Revenue's appeal allowed hides that issue-level split. Do not describe this as a remand for unconstrained reconsideration: the Assessing Officer must apply the limits already decided.
The report needs special statutory-version care. Its extract prints 15%/85%, while its treatment of AY 1994-95 repeatedly applies 25%; the embedded A.L.N. Rao discussion also reproduces older Rs. 10,000 language. Preserve the actual historical result without presenting every quoted percentage, notice rule, period or investment description as one coherent current consolidation. The validity-of-option point was later expressly used in Jindal Steel & Power (6 December 2023), paragraphs 44-45, for the Rule 5 depreciation option. That bounded later analogy does not perpetuate the historical 25% threshold, dispense with expressly prescribed formalities in a different version, or establish comprehensive later treatment.
Source: reported judgment / paragraphs 2-4, 6-10 / PDF pages 3, 4, 9, 10, 11 / judicial text; reported judgment / paragraphs 40-45 / PDF pages 35, 36, 37, 38 / judicial text
Detailed disposition and connected groups
- issue results
- issue
- Actual application of income
- result
- Rs. 47,27,533 allowed by the Assessing Officer remained undisputed
- in whose favour
- Assessee; not contested
- pinpoints
- source url
- Open cited source
- source sha256
- a5b694e7da88151c3ac822c24ee779e7232572d77b907b260f294742b4a01699
- asset id
- 2015_9_289_299
- pdf pages
- 9; 10; 11
- printed scr pages
- 297; 298; 299
- paragraphs
- 5; 9
- source role
- judicial text
- issue
- Mode/timing of option
- result
- Option expressed in the return was valid under the law considered; no specific separate mode was prescribed
- in whose favour
- Assessee
- pinpoints
- source url
- Open cited source
- source sha256
- a5b694e7da88151c3ac822c24ee779e7232572d77b907b260f294742b4a01699
- asset id
- 2015_9_289_299
- pdf pages
- 10
- printed scr pages
- 298
- paragraphs
- 6-8
- source role
- judicial text
- issue
- Quantum of set-apart exemption
- result
- Only the historical 25% amount of Rs. 24,85,305 stated by the Court could be allowed; the entire Rs. 32 lakh was excessive
- in whose favour
- Revenue on the excess
- pinpoints
- source url
- Open cited source
- source sha256
- a5b694e7da88151c3ac822c24ee779e7232572d77b907b260f294742b4a01699
- asset id
- 2015_9_289_299
- pdf pages
- 10; 11
- printed scr pages
- 298; 299
- paragraphs
- 9
- source role
- judicial text
- issue
- Further relief and whole-income exemption
- result
- No government-securities investment was made; no further deduction on that footing or whole-income exemption was available
- in whose favour
- Revenue
- pinpoints
- source url
- Open cited source
- source sha256
- a5b694e7da88151c3ac822c24ee779e7232572d77b907b260f294742b4a01699
- asset id
- 2015_9_289_299
- pdf pages
- 9; 10; 11
- printed scr pages
- 297; 298; 299
- paragraphs
- 4, 6, 9
- source role
- judicial text
- issue
- Consequential computation
- result
- Assessing Officer to recompute in accordance with the judgment; no final taxable-income figure fixed by the Court
- in whose favour
- Revenue obtains recomputation
- pinpoints
- source url
- Open cited source
- source sha256
- a5b694e7da88151c3ac822c24ee779e7232572d77b907b260f294742b4a01699
- asset id
- 2015_9_289_299
- pdf pages
- 11
- printed scr pages
- 299
- paragraphs
- 10
- source role
- judicial text
Additional statutory context, not separate holdings
12; 60; 61; 62; 63Judicial authorship and separate opinions
A.K. Sikri, J.Act identified in the reviewed source
Income-tax Act, 1961Verified relationships between specified judgments
- earlier case id
- sc-2015-09-03-gr-govindarajulu-sons
- later case id
- sc-2023-12-06-jindal-steel-power
- relationship
- option in return principle applied by analogy to rule 5 depreciation
- evidence
- source url
- Open cited source
- source sha256
- a5b694e7da88151c3ac822c24ee779e7232572d77b907b260f294742b4a01699
- asset id
- 2015_9_289_299
- pdf pages
- 10
- printed scr pages
- 298
- paragraphs
- 8
- source role
- judicial text
- source url
- Open cited source
- source sha256
- 3d522a4c1abc22eb7fb630b26c850b5cf5d6e3ebcc38ba60e8336987f96a48e1
- asset id
- 2023_16_484_524
- pdf pages
- 37; 38
- printed scr pages
- 520; 521
- paragraphs
- 44-45
- source role
- judicial text
- scope limit
- Jindal relies on the mode-of-option point; this is not a later adoption of the historical charitable-trust percentage, nor a comprehensive subsequent-treatment audit.
Scope and limits of the recorded treatment checks
- checked at
- 2026-10-04T12:18:20+00:00
- method
- Bounded literal-name search of consolidated judicial page text for Govindarajulu, followed by reading the relevant later primary judgment
- result
- Jindal Steel & Power explicitly discusses this decision at paragraph 44 and applies the option principle at paragraph 45. Earlier matches involving other persons with the surname were not treated as later treatment of this case.
- source asset id
- 2023_16_484_524
- pdf pages read
- 1; 35; 36; 37; 38; 39; 40; 41
- scope limit
- The later comparison is confined to the identified passage and related context; no entire new Jindal merits review is claimed.
- checked at
- 2026-10-04T12:18:20+00:00
- method
- Public-web query using site:sci.gov.in, Govindarajulu and 11
- result
- The bounded query did not establish an additional usable later primary source.
- scope limit
- The report-text comparison, not search snippets, supplies the cited treatment evidence.
Source & verification
Download original judgment / order · Open cited source rendition
Identified source rendition: 11 PDF pages; SHA-256 a5b694e7da88151c3ac822c24ee779e7232572d77b907b260f294742b4a01699. Original bytes preserved. Judgment paragraphs 1-10 on physical pages 2-11 (SCR 290-299), fully read, including the complete statutory extract and embedded A.L.N. Rao discussion. Paragraph 3 is not visibly numbered at the transition into the cited decision on page 4; the next numbered paragraph is 4 on page 9. Page 1 and opening of page 2 are editorial/report material. Final paragraph 10 and reporter ending are on page 11; no adjacent opinion.
- AY 1994-95 is expressly stated in paragraph 1. No other AY is attributed to this appeal.
- The appeal determines historical section 11 relief for actual application and the set-apart amount, including the form of the option, the 25% limit applied by the Court, and the recorded absence of government-securities investment for further relief. Sections 12 and 60-63 occur in the statutory extract, not as separate disputed issues. Paragraph 7 prints Section 11A Explanation-II; this is disclosed rather than treated as an independent adjudication under section 11A. The judgment's quoted 15%/85% wording and its applied 25% historical limit must not be conflated.
- The preserved reported eSCR rendition is the primary source; no newly retrieved signed original or original-PDF hash is claimed.; The source images confirm that the section 11 extract on physical pages 3-4 prints 15%/85%, while paragraphs 4 and 9 apply 25% to AY 1994-95. These versions are not silently harmonised or treated as a current statute.; The embedded A.L.N. Rao passage contains historical Rs. 10,000 and government-securities language. Its full original judgment was not separately read for this batch.; At the transition to A.L.N. Rao on physical page 4 no paragraph 3 number is visibly printed; the case-reference list calls it paragraph 3 and the judicial numbering resumes at 4. Page pins remove the ambiguity.; Paragraph 7 visibly prints Section 11A Explanation-II. The surrounding statutory text and decision concern section 11; no separate section 11A issue is invented.; Paragraph 9 states 25% of Rs. 99,41,221 as Rs. 24,85,305. The note retains the Court's whole-rupee amount rather than silently replacing it with an arithmetical figure or inventing final taxable income.
- The preserved report identifies one civil appeal. No additional connected appeal number is inferred.
Statutory scope
Historical Income-tax Act, 1961 provisions and source-described periods only. No automatic mapping to the Income-tax Act, 2025.
Later treatment
Source checked 2026-10-04. No comprehensive later-treatment or present-law audit has been performed. Actual bounded checks are separately described; a limited search or comparison does not establish that no other later authority exists.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
Identified source links
- reported judgment — PDF 11 pages
SHA-256: a5b694e7da88151c3ac822c24ee779e7232572d77b907b260f294742b4a01699
- reported judgment — PDF 41 pages
SHA-256: 3d522a4c1abc22eb7fb630b26c850b5cf5d6e3ebcc38ba60e8336987f96a48e1
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