Judgment : 1. Heard learned counsel appearing for the parties. 2. D.B. Income Tax Reference No.41/1980 was decided by a Division Bench of this Court, presided by the Chief Justice on 12.08.1987, relying upon CIT vs. Bharatchandra Banjdeo [(1985) 154 ITR 236], wherein it was held that even if only a part of the palace is in self occupation of the former ruler, and the rest has been let out, the exemption available under section 10(19A) of the Income Tax Act will be available to the entire palace. The Division Bench observed that no decision taking contrary view has been cited before it, and thus there was no good reason to depart from the view taken in CIT vs. Bharatchandra Banjdeo (supra), which is a plausible view. 3. An application for recalling the order was filed by the Income Tax Department on 24.05.1988, on the ground that the observations and the decision by the Division Bench in Reference runs contrary to the decision of this Court in the case Maharawal Laxman Singh vs. CIT [(1986) 160 ITR 103], in which the matter was considered, and it was held that the assessee is not entitled to exemption in respect of that part of the palace, which has been rented out. 4. During the pendency of the recall application, the conflict of opinion between Maharawal Laxman Singh vs. CIT (supra) and the view expressed in D.B.Income Tax Reference No.64/1986 [Commissioner of Income-Tax, Jaipur vs. Shri Maharao Bhim Singh of Kota through Maharao Brij Raj Singh, Kota [2014(3) WLC (Raj.) 402], decided on 26.03.2014, was referred to a Larger Bench. 5. A three-Judge Bench of this Court decided the Income Tax Reference No.64/1986 on 26.03.2014, after considering the entire case law. 5. A three-Judge Bench of this Court decided the Income Tax Reference No.64/1986 on 26.03.2014, after considering the entire case law. Relying on Commissioner of Central Excise vs. Hari Chand Shri Gopal [ (2011) 1 SCC 236 ], Indian Oil Corporation Limited vs. Commissioner of Central Excise, Vadodara [ (2012) 5 SCC 574 ], Novopan India Limited, Hyderabad vs. Collector of Central Excise and Customs, Hyderabad [1994 Supp (3) SCC 606] and State of Gujarat and Others vs. Essar Oil Limited and Another [ (2012) 3 SCC 522 ], the three Judge-Bench held that the general principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same have to be construed strictly and that in construing the exemption notification, question of equity does not arise. The exception or exemption provision must be construed strictly. Give it or does not give it at all. An exemption is a stand alone process. 6. The three-Judge Bench further held that in case of taxing statute, one must have regard to the strict letter of the law and if the Revenue satisfies the Court that the case falls strictly in the provisions of law, the subject can be taxed. Such being the position of law, the Ruler cannot be held entitled to exemption of annual value of that part of the palace, which he has let out and has parted with possession thereof in favour of a third party. In Mohammad Ali Khan vs. CWT [1983 (14) ITR 948], the word “occupation” was interpreted to mean that the Ruler continues to occupy the palace, i.e., it should be in his actual use or actual possession and he should exercise actual physical control over the palace. When a portion of the palace has been let out to tenants on rent, the Ruler is not in occupation of the entire palace and cannot be said to be in actual possession or in actual use of the portion of the palace occupied by the tenants. In Commissioner of Income-Tax, Jaipur vs. Shri Maharao Him Singh of Kota through Maharao Brij Raj Singh, Kota (supra), it was held as follows: “54. In Commissioner of Income-Tax, Jaipur vs. Shri Maharao Him Singh of Kota through Maharao Brij Raj Singh, Kota (supra), it was held as follows: “54. Even in Mohammad Ali Khan, referred to above, the Supreme Court observed that in case of taxing statute, one must have regard to the strict letter of the law and if the Revenue satisfies the Court that the case falls strictly in the provisions of law, the subject can be taxed. Such being the position of law, the Ruler cannot be held entitled to exemption of annual value of that part of the palace, which he has let out and has parted with possession thereof in favour of the third party. So long as he continue to occupy the palace, whether by actually utilizing it or by keeping it vacant but retaining its control, it shall be for the purpose of Section 10 (19A), supra, deemed to be in his occupation. He shall however disentitle himself of the exemption from income-tax on the annual value of such part of the palace, possession and/or control of which he has parted with in favour of tenant. 55. In our considered opinion, earlier Division Bench judgment, in Maharawal Laxman Singh vs. C.I.T. -(1986) 160 ITR 103 (Raj.), in which it was held that under Section 10(19A) of the Income Tax Act, 1961, the annual value of any one palace in the occupation of a Ruler is exempt from tax in computing his total income, lays down correct law and the later Division Bench judgment in C.I.T. vs. H.H.Maharao Bhim Singhji -(1988) 173 ITR 79, having not been correctly decided, does not lay down good law. We, therefore, answer the reference accordingly.” 7. In our view, after this Court had expressed an opinion in Maharawal Laxman Singh vs. CIT (supra), the Division Bench of this Court in this case vide judgment and order dated 12.08.1987 could not have rendered a contrary opinion. The observations by the Court that no decision taking the contrary view has been cited before us, and that the Court did not find any good ground to depart from the view, was expressed in ignorance of the judgment of this Court in Maharawal Laxman Singh vs. CIT (supra). 8. The observations by the Court that no decision taking the contrary view has been cited before us, and that the Court did not find any good ground to depart from the view, was expressed in ignorance of the judgment of this Court in Maharawal Laxman Singh vs. CIT (supra). 8. We are relieved to resolve the conflict between two judgments the question was referred by Division Bench to a Larger Bench, which has since been decided in the Reference on 26.03.2014, following the opinion of the Maharawal Laxman Singh vs. CIT (supra). 9. In the facts and circumstances of the case, the Department ought to have moved an application for review rather than applied for recall. Learned counsel appearing for the Department had prayed that the application for recall to be considered as an application for review, and since the matter is now concluded by the Larger Bench of this Court, the Court may review the order dated 12.08.1987, and bring its opinion in consonance with the judgment of three-Judge Bench in D.B.Income Tax Reference No.64/1986 decided on 26.03.2014 [Commissioner of Income-Tax, Jaipur vs. Shri Maharao Bhim Singh of Kota through Maharao Brij Raj Singh, Kota]. 10. Learned counsel appearing for the assessee would submit that a Special Leave Petition against the judgment of three-Judge Bench of this Court dated 26.03.2014 in D.B.Income Tax Reference No.64/1986 is pending in the Apex Court. 11. It is admitted to both the parties that the Apex Court has not passed any interim order, nor has stayed the operation of the judgment of the three-Judge Bench dated 26.03.2014. 12. In view of the aforesaid discussion, we allow the prayer of the learned counsel appearing for the Income Tax Department to convert the recall application into review application, and allow the review application. 13. We have heard both the parties and do not find out any good ground to take a different view, which can be taken in the judgment of three-Judge Bench dated 26.03.2014 in D.B. Income Tax Reference No.64/1986 [Commissioner of Income-Tax, Jaipur vs. Shri Maharao Bhim Singh of Kota through Maharao Brij Raj Singh, Kota]. 14. The Income Tax Reference is decided, following the view and confirming the view taken by this Court in Maharawal Laxman Singh vs. CIT (supra). The question is answered in favour of the Department and against the assessee. The Department will proceed in accordance with law. 14. The Income Tax Reference is decided, following the view and confirming the view taken by this Court in Maharawal Laxman Singh vs. CIT (supra). The question is answered in favour of the Department and against the assessee. The Department will proceed in accordance with law. It is made clear that the judgment, will be subject to the decision of the Supreme Court in the pending Special Leave Petition against the judgment of the three-Judge Bench of this Court.