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TMI Blog1971 (11) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. That section, omitting the proviso, is in these terms: " 4. (3)(i) Subject to the provisions of clause (c) of sub-section (1) of section 16, any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, in so far as such income is applied or accumulated for application to such religious or charitable purposes as relate to anything done within the taxable territories, and in the case of property so held in part only for such purposes, be income applied or finally set apart for application thereto: . " The proviso is unnecessary for deciding the question. Clause (c) of sub-section (1) of section 16 of the Act has admittedly no application. The Tribunal held that the assessee is entitled to the exemption. Before dealing with the question, we have to deal with the contention raised by counsel for the assessee that the finding entered by the Tribunal on a reading of the relevant documents, the trust deed, and the memorandum of association of the assessee-society as it was, and as it was amended, that the objects of the society are for charitable purposes is a finding on a question of fact and that no specific q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and other aid to deserving students in any school anywhere, of any sex, caste, creed or colour. (c) To provide funds for annual prizes to students for essays and compositions, theses on religion, art, culture and other topics selected by the board of trustees. (d) To provide funds for the establishment of collection of paintings, sculpture, carving, metal work and other crafts ; scientific inventions, research, mechanical and, philosophic ; natural history ; museums, aquariums, zoos, gardens, kennels, etc., and refuges for domesticated animals and birds. (e) To start, construct, maintain and manage widow's homes, orphanages, maternity homes, amenity homes for the public, homes for the infirm and disabled ; T. B. sanatoriums and leper asylums, lunatic asylums, libraries, reading rooms, clubs and associations for the development of art, culture and other literary and religious pursuits and recreation for general public utility. (f) To help and promote rural reconstruction work. (g) To purchase lands, erect buildings, acquire properties, construct tanks, wells, roads, instal and maintain electrical and other generating plants, water pumping stations, wireless and telephone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... howsoever by way of profits, to the persons who at any time are or have been trustees or members of the Charities or to anyone of them or to any person claiming through any of them. Provided that nothing herein contained shall prevent the payment in good faith of remuneration to employees of the Charities or to any member thereof or other persons for any service rendered to the Charities or prevent the Charities from giving subsistence allowances to or maintaining members who either work for the Charities or are too old or disabled or sick to work and have no means of maintaining themselves. 4. In the event of the Charities being dissolved for any cause whatever if there shall remain after the satisfaction of all debts and liabilities any property whatsover the same shall not be paid or distributed among the members of the Charities or any of them, but shall be given or transferred to some other society or institution having objects similar to the objects of the Charities to be determined by the votes of not less than three-fifths of the members personally or by proxy at the time of the dissolution." It is admitted on all hands that the question must be answered with reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal obligation for private religious purposes which does not enure for the benefit of the public." We have extracted the relevant paragraphs of the two memorandums which we have to construe for the purpose of answering the question referred to us. A fair reading of the memorandum as a whole indicates that the main purposes for which the trust had been created are those contained in sub-paragraphs 2(b) to (f). Excepting the last line in sub-paragraph 2(d) it is not disputed that the other parts of these paragraphs referred to charitable purposes as defined in the Act. The settlor was conducting a business, apparently an extensive and affluent business. He created a trust in respect of the business. This is clear from the trust deed which is part of annexure " A " at page 21 thereof. The relevant part of the declaration states : " ............... do hereby create, declare and constitute a Trust governing and in respect of the business and industries and properties described in the Schedule and annexed hereto ...... under the name and style of the Shrishaila Industrial and Spiritual Colony Charities ....... " Business has been held to be property and this proposition is not ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... association to carry out those objects. Reliance had been placed on a decision of the Court of Appeal in North of England Zoological Society v. Chester Rural District Council which in turn referred to a decision of the House of Lords in Cotman v. Brougham. Lord Wrenbury expressed the view in Cotman v. Brougham that there may be included in the objects what are not real objects of the company but are enabling powers to achieve the objects of the company. A passage from the judgment of Lord Wrenbury at page 522 may be extracted: " The objects of the company and the powers of the company to be exercised in effecting the objects are different things. Powers are not required to be, and ought not to be, specified in the memorandum. The Act intended that the company, if it be a trading company, should by its memorandum define the trade, not that it should specify the various acts which it should be within the power of the company to do in carrying on the trade. The Third Schedule of the Act contains model forms of memoranda of association. These ought to be followed. Section 118, sub-section (1), enacts that those forms 'or forms as near thereto as circumstances admit ' shall be used i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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