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TMI Blog2000 (4) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... , by the Income-tax Officer (hereinafter referred to as "the ITO"). Notices dated February 10, 1989, were issued by the Income-tax Officer under section 148 of the Act for the assessment year 1984-85, and under section 274 read with sections 273(2)(b), 271(1)(a) and 271(1)(c) of the Act for the assessment year 1985-86. The respondents though served, have filed no reply and, therefore, the uncontroverted averments made in the petition are required to be accepted. The trust was settled by petitioner No. 2 by executing a deed of trust dated July 21, 1981, vide annexure B. The rules and regulations of the trust framed by the settlor and the trustees on July 21, 1981, are at annexure C. The trust was registered as a public charitable trust with the office of the Charity Commissioner under the provisions contained in the Bombay Public Trusts Act, 1950, vide registration No. CH/4648/Ahmedabad, for which a certificate of registration was issued on January 28, 1982, vide annexure D. The petitioners submitted an application on March 9, 1982, for being registered under section 12A(a) of the Act, which was entered at No. G. 137/TV in the register of applications under section 12A(a) maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Industries Ltd. v. ITO [1970] 77 ITR 268, considered a similar situation. The appellant before the apex court approached the High Court, inter alia, praying for an order prohibiting the officer from taking any action on the notice as the Income-tax Officer had no reason to believe that by reason or omission or failure on the part of the company to disclose fully and truly all material facts, income has escaped assessment or has been underassessed. Before the apex court, the decisions taken earlier in similar matters were placed for consideration to accept the contention advanced on behalf of the assessee. At page 276, the apex court pointed out : "In those cases, the company in its writ petitions had repudiated the assertion of the Income-tax Officer that he had reason to believe that due to the omission or failure on the part of the company to give material facts, some income had escaped assessment. Under those circumstances one would have expected the officer who issued the notices under section 34(1)(a) to file an affidavit setting out the circumstances under which he formed the necessary belief. We were told that one Mr. Pandey had issued the notices in question. That offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February 10, 1989, under section 148 of the Act is hereby quashed. So far as the registration aspect is concerned it is required to be noted that the assessee-trust was a trust, registered under the provisions contained in the Bombay Public Trusts Act, 1950. As indicated earlier, the copy of the trust deed is placed vide annexure B. The rules and regulations framed by the trust, and the registration certificates issued by the Deputy Charity Commissioner are placed on record vide annexures C and D. Section 12A of the Act indicates the "conditions as to registration of trusts, etc." Section 12A(a) reads as under : "12A. The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely :--- (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later : Provided that the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefits to the staff of 16 different institutes, the names of which are appearing at page 44. The staff working in these institutes, on becoming members, are getting the benefits of the scheme. Thus, the staff members of all these institutes become entitled to get the benefit of the scheme. The object beneficial to a section of the public is an object of "general public utility". To serve as a charitable purpose, it is not necessary that the object must be to serve the whole of mankind or all persons living in a country or province. It is required to be noted that even if a section of the public is given benefit, it cannot be said that it is not a trust for charitable purpose in the interest of the public. It is not necessary that the public at large must get the benefit. It is required to be noted that considering the objects of general public utility, the matter is to be decided. Framers of the Constitution made a provision with regard to the Directive Principles of State Policy in Part IV of the Constitution of India. It shall be the duty of the State to follow the principles, both in the matter of administration as well as making of laws. It is aimed towards a "welfare State". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by qualified staff. The object of the trust in creating the fund is to provide aid in cases of sickness and disablement which otherwise is the duty of the State to provide the assistance within the limits of its economic capacity. In our opinion, looking to the scheme of the trust, which is produced on the record, it is clear that the same is intended to benefit a section of the public, which certainly can be distinguished. The persons who are entitled to get the benefit should be identifiable. In the instant case, the trust is created under a trust deed dated July 21, 1981. The rules and regulations are also framed vide annexure C. The funds are to be utilised for... For the purpose of availing of the benefit, the employee has to become a member on payment of entrance fees, and is required to make a contribution to the fund. The trust was created with a view to provide assistance in case of sickness, etc. The rules and regulations are made for the purpose of administering the funds in the interest of the employees. At the relevant time, the application for registration was required to be made for registration of a charitable or religious trust or institution in Form No. 10A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly for the benefit of the members of the staff working in the institutions of the law society, the assessee is not entitled to claim any benefit. The apex court in the case of Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1, has pointed out that the restrictive clause in section 2(15) must be read with "the advancement of any other object of general public utility" and not "object of general public utility". The Supreme Court, considering the English decisions and the Indian law, has pointed out in the aforesaid decision that : "There is no such limitation so far as Indian law is concerned even if a purpose is not within the spirit and intendment of the preamble to the statute of Elizabeth, it would be charitable if it falls within the definition of 'charitable purpose' given in the statute, Every object of general public utility would, therefore, be charitable under the Indian law, subject only to the condition imposed by the restrictive words 'not involving the carrying on of any activity for profit' added in the present Act." The apex court in the case of CIT v. Federation of Indian Chambers of Commerce and Industry [1981] 130 ITR 186, after ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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