9911796707
TMI Blog2002 (1) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... is taxable under the provisions of sub-section (4A) of section 11 of the Income tax Act without appreciating the fact, that after the insertion of section 11(4A) of the Income-tax Act from the financial year, 1983, that is from April 1, 1984, exemption in respect of profits and gains of business is available to only those institutions whose business is carried on for charitable purpose by the beneficiaries of trust?" Facts: The short facts involved in the present appeals are as under: The respondents herein, the Bombay Bullion Association Dharam No Kanto Trust, Mumbai ("the trust" for short), claimed to be a charitable trust earning income from weighing activities. The trust claimed exemption under section 11A of the Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me in this regard. "(4A) Sub-section (1) or sub-section (2) or sub-section (3) or sub-section (3A) shall not apply in relation to any income, being profits and gains of business, unless: (a) the business is carried on by a trust wholly for public religious purposes and the business consists of printing and publication of books or publication of books or is of a kind notified by the Central Government in this behalf in the Official Gazette; or (b) the business is carried on by an institution wholly for charitable purposes and the work in connection with the business is mainly carried on by the beneficiaries of the institution, and separate books of account are maintained by the trust or institution in respect of such business." T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Limited, a company limited by guarantee and registered under the Indian Companies Act, 1913, and having its registered office at 185, Sheikh Memon Street, Bombay-2, hereinafter referred to as 'the Trustee, send greetings. Whereas in or about 1951 Bullion Exchange Limited (in voluntary liquidation) through their solicitors, Motichand and Devidas, handed over to the trustee the equipments for the purpose of weighing precious metals known as 'Sheth Gordhandas Ranchhodas Bhagatwalla, Kanto' and subsequently known as 'Dharamno Kanto' which was established at 1st Agiary Lane, Bombay-2, in rented premises in the property belonging to Seth Dossabhai Maganlal Bullion Association Dispensary for the purpose of maintaining and running the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r till a new committee is appointed..." The submission of learned counsel for the respondent-trust is that reading the above relevant clauses in particular and the trust deed as a whole it is clear that the trust was established for managing and running the activities popularly known as "Dharam No Kanto"; a service of weighing precious metals provided for the benefit of public in general. In his submission, it is clear from the trust deed that the beneficiaries of the trust are the general public. The trust deed also provides for mechanism to run the activities of the trust and makes a provision for carrying on the business activities of the trust. In his submission a specific provision is to be found in the trust deed to the effect that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , personally, because of their physical incapacity. The trust wherein minors are beneficiaries, minors cannot carry on business of the trust because of their legal infirmity. No activities of such trust can be carried on by the beneficiaries because of the peculiar class of beneficiaries to which they belong. The crucial question is, can such a trust be kept away from the benefits by adopting literal interpretation of sub-section (4A)(b) of section 11 of the Act on the specious ground that they do not fulfil the literal compliance of sub-section (4A)(b) extracted above. No provision of law can be interpreted in such a manner which would take away the very spirit, object and purpose of the provision itself and make it a dead letter. It will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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