TMI Blog1992 (7) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... a) of the Income-tax Act, 1961("the Act"). Gangabai executed a document dated September 13, 1958, which was described as a deed of trust. The trust was named as " Gangabai Charities ". In the trust-deed, Ganga Bai gave effect to her desire to construct and provide a building for the benefit of the public to be used for religious, charitable, cultural and social purposes. She contributed Rs. 34,000 to the trust fund. With that fund, a plot of land was purchased and the construction Was begun. The fund was augmented by her son, Seetha Rama Rao, from his own contributions as well as from outside donations. The building was completed, at a cost of about Rs. 6 lakhs. Ever since the construction of the building, it is being let out as a marriag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities [1983] 142 ITR 718 (Mad)), answered the question in the negative and against the assessee. These appeals by way of special leave are against the judgment of the High Court. Section 11(1)(a) of the Act, to the relevant extent, is reproduced hereunder : " 11. Income from property held for charitable or religious purposes. - (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income (a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India . . ." The above-quoted provisions make it clear that a trust has to sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this part of this city." " Now THIS INDENTURE WITNESSETH that in pursuance of the premises the settlor above-named doth hereby declare that the plot of land above-mentioned and more particularly described in the schedule below was purchased by her for Rs. 24,000 on September 9, 1957, for the express purpose of constructing a building thereon and dedicating the same for use by the public, inter alia, for religious, charitable and cultural purposes and doth hereby create an irrevocable trust of the said property for the purposes aforesaid." " The settlor further declares that immediately after such purchase she, the settlor, relinquished all her rights thereto and dedicated the said plot of land for the use of the public for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and social " purposes referred to in the deed are not avowed as the very objectives of the trust itself. What the founder of the trust intended to convey was that the building to be constructed out of the funds provided by her and supplemented from other sources must be held for the benefit of the public for being used by them for religious, charitable, cultural or social purposes. We cannot read the contents of the above-quoted paragraphs as the objects of the trust ; these are only the objects of those who wish to put the trust property to use. On a careful consideration of the language of the trust deed, we are of the view that the intention of the founder was to provide a building for the benefit of the public to be used by them for rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Parasaran invited our attention to paragraphs 5 and 6, of the special leave petition wherein it is stated that Mr. Justice V. Balasubrahmanyan who delivered the judgment in this case on behalf of the two judge Bench of the High Court had given an opinion in this case as special counsel for the Income-tax Department and, in the said opinion, the Department was advised to go to the High Court by seeking a reference. It was also opined that the trust was ineligible for the exemption for the reasons which were given therein. It is further mentioned in the special leave petition that the petitioner came to know about this aspect only after the judgment was pronounced on December 17, 1980. None of the parties brought this aspect to the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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