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TMI Blog2007 (12) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... did not come within the definition of the expression "Local Authority". 5. Under the circumstances, Gujarat Maritime Board made an application to the Commissioner for registering it (Board) as a "Charitable Institution" as defined under Section 2(15) of the Income-tax Act, 1961 (hereinafter for the sake of brevity as "1961 Act"). Accordingly, they claimed exemption as Charitable Institution in respect of income derived from their property/business under Section 11 of the 1961 Act. This has been denied by the Department. 6. The short controversy which we are required to decide in this case is: whether the Maritime Board is entitled to the status of a Charitable Institution under Section 11 of the 1961 Act. We may clarify that in this case we are concerned with registration and not with application of income. 7. Before analyzing various provisions of the 1961 Act, we are required to analyse the provisions of Gujarat Maritime Board Act, 1981 ("1981 Act" for short). 8. As can be seen from the preamble of the 1981 Act, it is clear that the Board has been constituted, inter alia, for purposes of development and maintenance of minor ports. Under the said Act the Maritime Board also r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or the Central Government or any other authority, as the case may be, may establish and maintain for the protection of the port and the docks, warehouses and other property of the Board; (g) the cost of repairs and maintenance of the property belonging to or vested in the Board and all charges upon the same and all working expenses; (h) the cost of the execution and provision of any new work or appliance specified in section 25 which the Board may determine to charge to revenue; (i) any expenditure incurred under section 26; (j) any other expenditure which may be incurred by the Board generally for the purposes of this Act; (k) any other charge which may on the application of the Board or otherwise be specially sanctioned by the State Government or for which the Board may be legally liable. (2) All moneys standing at the credit of the Board which cannot immediately be applied in the manner or for the purposes specified in sub-section (1) shall- (a) be deposited in the State Bank of India or any corresponding new bank as defined in clause (d) of section 2 of the Banking Companies Acquisition and Transfer of Undertaking Act, 1970 [ or in any corporation or financial institu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1952, to the extent to which such income is applied to such purposes outside India : Provided that the Board, by general or special order, has directed in either case that it shall not be included in the total income of the person in receipt of such income; (d) income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution… 11.(4) For the purposes of this section "property held under trust" includes a business undertaking so held, and where a claim is made that the income of any such undertaking shall not be included in the total income of the persons in receipt thereof, the "Assessing Officer shall have power to determine the income of such undertaking in accordance with the provisions of this Act relating to assessment; and where any income so determined is in excess of the income as shown in the accounts of the undertaking, such excess shall be deemed to be applied to purposes other than charitable or religious purposes." 10. According to Section 2(15), the expression "Charitable Purpose" has been defined by way of an inclusive definition so as to include relief to the poor, education, medical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, "any other object of generally public utility". From the said decisions it emerges that the said expression is of the widest connotation. The word "general" in the said expression means pertaining to a whole class. Therefore, advancement of any object of benefit to the public or a section of the public as distinguished from benefit to an individual or a group of individuals would be a charitable purpose (CIT, v. Ahmedabad Rana Caste association [1983] 140 ITR 1 (SC)). The said expression would prima facie include all objects which promote the welfare of the general public. It cannot be said that a purpose would cease to be charitable even if public welfare is intended to be served. If the primary purpose and the predominant object are to promote the welfare of the general public the purpose would be charitable purpose. When an object is to promote or protect the interest of a particular trade or industry that object becomes an object of public utility, but not so, if it seeks to promote the interest of those who conduct the said trade or industry (CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC)). If the primary or predominant object of an institution ..... X X X X Extracts X X X X X X X X Extracts X X X X
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