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TMI Blog1977 (2) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... endar year 1971 was of Rs. 1,593 and the assessee's claim was that the income was not liable to income-tax in view of the provisions of s. 11. This was not acceptable to the ITO. He observed that besides the Dharmshala building from which benefit derived was by a particular religious community of Gujarati Hindus, there were five blocks for which preference for accommodation was given to the donors. The ITO referred to cls. 3(b), 13 and 17 of the Trust Deed and came to the conclusion that it was a case of a private religious trust. He accordingly made assessment in the status of AOP. The clause relied upon the ITO read as under: 3(b) Subject to the provisions of sub-cl. (a) of this Clause the Trustees shall hold the Trust Fund upon Trust s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Trustees shall be entitled to accept such title or evidence of title as the Trustees shall think fit with absolute power to the Trustees to sell any such immovable property or properties or securities so purchased by them and stand possessed of money to arise from such sale from trust and with and subject to the powers and provisions herein contained by and under these presents declared continued concerning the Trust fund which or the proceeds whereof shall have been spent in the purchase of property or properties or securities or such them as shall then be sustaining the capable of taking effect. The Trustees shall have power to buy in and re-sell any of the property and security without being responsible for any loss that may thereby be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the trust was restricted to a particular Hindu caste of Ahmedabad and the Court observed: "It is well settled that an object beneficial to a section of the public is an object of general public utility. To serve a charitable purpose it is not necessary that the object should be to benefit the whole of mankind or all persons in a country or State. It is sufficient if the intention to benefit a section of the public as distinguished from a specified individual is resent. The section of the community sought to be benefit must be sufficiently definite and identifiable by some common quality of a public or impersonal nature". 4. In the instant case, the AAC considered, that the benefit was not derived by any particular caste but by all pi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative repeated the arguments considered by the ITO. He stated that as per cls. 3(b) and 13, the trust was to provide facility only to a limited section of the Society and that there was no control over the manner in which the trustees could utilise the funds in terms of cl. 17 of the trust deed. The learned counsel for the assessee, on the other hand, stated that cl. 3(b) qualified for the establishment of Dharamshala while cl. 13 and 17 related only to the proper management of the Dharamshala and that these did not come in the way of s. 11. Reliance in this regard was had on the Supreme Court's decision in the case of Ahmedabad Rana Caste Association vs. CIT, Gujarat. The learned counsel for the assessee further gave statistics to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld in the case of Thakur Dass Shyam Sunder vs. Addl. CIT (1979) 93 ITR 27 (All) that a discretion vested in a trustee to spend the trust amount over charities would not effect the character of the deposit. A trust for charities without specifying any charities at all was valid. Accordingly even if some discretion was given to the assessee to spend the amount deposited with it on a charity of its own choice, it does not mean that either no trust was treated or the trust as created was invalid. The Supreme Court held in the case of CIT, Madras vs. Andhra Chamber of Commerce 55 ITR 723 (SC) that the expression "object of general public utility" was not restricted to object beneficial to the whole of mankind. An object beneficial to a section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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