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TMI Blog1967 (4) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... round that the trust did not fulfil the conditions laid down under section 15B of the Act. The Appellate Assistant Commissioner to whom an appeal was preferred took the same view. The matter was taken up in further appeal to the Income-tax Appellate Tribunal which observed that in relation to the previous assessment year, it had held that the Agastyar Trust was a public trust and that any donation made to that trust was an allowable deduction under section 15B. At the instance of the Commissioner of Income-tax, the Tribunal referred the following question of law for the determination of the High Court under section 66(1) of the Act : " Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim deduction under section 15B in respect of the donation paid to the Agastyar Trust ? " The High Court answered the question against the assessee who has brought the present appeal to this court by special leave. Section 15B of the Act provides for exemption from tax in respect of any sums paid by the assessee as donations to any institution or fund to which the section applies. Sub-section (2) reads as follows : " (2) This section applies to any insti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and encourage the study of and research in religion and to propagate religious principles ; (h) to buy, print, publish, sell for profit or distribute free or at concessional rate such literature as may be thought beneficial for the objects of the trust ; (i) to conduct worship and festivals in temples, shrines and other places of worship, to build, maintain, administer and manage temples, shrines and other places of worship. (j) to do all such other things as may be necessary, incidental, conducive or convenient to the attainment of the above objects or any of them and the decision of the trustees that any particular thing is necessary, incidental, conducive or convenient to the attainment of the above objects or any of them shall be conclusive." The other clauses of the trust deed provide for the appointment of additional trustees, the administration and management of schools, colleges, etc., that may be set up investment of the moneys, the power conferred on the trustees to alter the form of the properties and reinvest the funds, to grant leases, to borrow, and lastly to conduct or carry on any business or undertaking alone or in partnership with any other person for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object must not be read isolated from the other objects of the trust but having regard to the immediately preceding object which is to run hospitals and dispensaries, the impugned object, viz., the manufacture of pharmaceutical and medicinal preparations must be deemed to be for the purpose of carrying out the earlier object, viz , running of hospitals and dispensaries. We are unable to hold that there is any connection between the objects of the trust and upon an interpretation of the document taken as a whole, it is imposible to accept the appellant's contention that clause 2(c) is the dominant object of the trust and clause 2(d) is a subsidiary object. The argument of the appellants is, in fact, contradictory of the last clause of paragraph 2 of the trust deed which states that the objects shall be independent of each other, notwithstanding that any of the objects shall be void for any reason whatsoever, the trust shall be valid and operative with respect to the other objects. This clause expressly provides that the trustees shall have discretion " to apply the property of the trust in carrying out all or any of such objects of the trust as the trustees may deem fit ". Having r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Appeal that the words in clause 3(B) of the memorandum of association, " the maintenance, support, development and assistance of the Oxford Group Movement in every way," extended beyond purely religious activities, permitted the company to engage in secular activities, and authorised the expenditure of its funds on matters which were not charitable, and, therefore, the company could not be said to be formed for charitable purposes only. It was also observed that although a religious body might, without losing its religious character, engage in a number of subsidiary activities which were not purely religious, a trust which was so worded as to permit the expenditure of income by such a body in such subsidiary activities was not a good charitable trust. It was further held that the objects set forth in clause 3(C), paragraphs (9), (10), of the memorandum of association were not merely ancillary to the main objects expressed in sub-clauses (A) and (B), but themselves conferred powers on the company which were so wide that they could not be regarded as charitable. The principle has been clearly expressed by Lawrence L.J. in Keren Kayemeth Le Jisroel Ltd. v. Inland Revenue Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act cannot be applied to the Agastyar trust and no exemption can be granted to the assessee under section 15B of the Act. We, accordingly, hold that the High Court rightly answered the question of law against the assessee and in favour of the Commissioner of Income-tax. It was, however, contended by Mr. Swaminathan on behalf of the assessee that the High Court had no jurisdiction to go into the question whether the Agastyar trust was held for a wholly religious or charitable purpose under section 4(3)(i) of the Act. It was pointed out that the only question of law arising from the order of the Tribunal was with respect to the examination of the eligibility of the Agastyar trust for exemption under section 4(3)(i)(b) of the Act. It was contended that the scope of the appeal from the order of the Tribunal was confined to the question whether the income from the business owned by the trust was entitled to exemption under section 4(3)(i)(b) of the Act and whether the conditions of that proviso were satisfied. It was submitted that the High Court acted in excess of jurisdiction in raising a new question which was not raised by the Appellate Tribunal, namely, whether the trust itself ..... X X X X Extracts X X X X X X X X Extracts X X X X
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