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TMI Blog1977 (12) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... id expression as defined in section 2(15) of the Income-tax Act, 1961, and that consequently its income for the assessment years 1964-65 and 1965-66 is not exempt from tax under section 11 of the Income-tax Act, 1961 ? " T.C. No. 252 of 1974. " Whether, on a proper construction of the trust deed dated June 4, 1962, the Tribunal was right in holding that the objects of the trust are not (for) charitable purposes within the meaning of the said expression as defined in section 2(15) of the Income-tax Act, 1961, and that consequently its income for the assessment year 1966-67 is not exempt from tax under section 11 of the Income-tax Act, 1961 ? " The assessee is the same in both the cases. The questions relate to the assessment years 1964-65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure, rest, recuperation and other allied advantages in the way of alleviating the sufferings of humanity. (d) To build, erect and construct and to aid and assist in the building, erection and construction of houses, tenements and places of residence for the poor, needy and defectives and to afford them all comforts and conveniences. (e) To conduct poor feeding and generally to give food and clothing to the poor, needy and defectives and to afford relief to people in distress and affected by earthquake, flood, famine, pestilence and other accidents and conduct or grant donations for the support of the inmates of orphanages. (f) To help, assist and give aid to the fathers, or other natural guardians, or near relatives of indigent and unmar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly " relief of the poor " or " object of general public utility " and that since the object are independent of each other and the trustees are entitled to apply the trust properties to any of these objects and they could confer the benefits of the trust on selected individuals, it would not be a " charitable purpose " within the meaning of section 2(15) of the Act. Accordingly, he held that no part of the income of the trust is exempt from tax under section 11of the Act and that it was liable to tax and interest thereon. On appeal, the Appellate Assistant Commissioner differed from the assessing officer and held that the assessee is entitled to exemption for all the three years on the ground that the fact that the trustees could choose som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. The Tribunal allowed the appeals and set aside the orders of the Appellate Assistant Commissioner and restored those of the Income-tax Officer. On facts it has been found by the Tribunal that the objects mentioned in clauses (a) and (b) would fall under the head " education ", the objects mentioned in clause (c) would fall under the head " medical relief " and that those mentioned in clause (d) would fall under the head " relief to the poor " and these are not disputed by the department, and that the objects mentioned in clauses (f) and (g) also would fall under the head " relief to the poor ". We agree with the Tribunal that the objects mentioned in clauses (a) and (b) would fall under the head " education ", the objects ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 375, 377, to which one of us was a party, has observed : " In view of the altered definition of the term ' charitable purpose ', the question whether an object of a company is a main object or is only an incidental object loses much of its significance. We say so because we conceive that even in cases where a business is conducted not in carrying out the objects of the company but only in aid of achieving the objects of the company if that business is so linked or connected with the objects of the company and, if the objects are such that it will fall only under ' objects of general public utility ', the charitable purpose will cease to be a charitable purpose as defined in the Act. And if the incidental object or even the purpose of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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