TMI Blog1971 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ference. Originally, the appeals had been filed by certificate (C. As. Nos. 2146-2148168) but that was found to be defective as no reasons were stated therein. The reference relates to the assessment years 1960-61, 1961-62 and 1962-63, the relevant accounting years being the financial years ending 31st March, 1960, 31st March, 1961, and 31st March, 1962. During the relevant years the assessee, which is an association of persons, held various Properties for the purposes set out in its constitution. It is unnecessary to refer to all the clauses therein. It would suffice to mention that among the objects and purposes of the institution were the management of the movable and immovable properties of the Rana community of the city of Ahmedabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Commissioner of Income-tax moved the Tribunal for stating the case and referring the question of law arising from its order. The Tribunal referred the following question to the High Court: " Whether, on the facts and in the circumstances of the case, the income of the assessee trust is exempt under section 4(3)(i) of the Income-tax Act, 1922, and section II of the Income-tax Act, 1961 ? " The High Court decided the whole matter only on one point. It considered the question whether the purpose for which the properties were held by the assessee had the public character which the income-tax law required of the charities it recognised for the purpose of exemption. The question that was posed was " are the purposes directed to the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Rana sect who are natives of Ahmedabad and the other comprising members of the Rana sect who are residing in Ahmedabad and who have been accepted by the community according to the old usage of the caste. It is difficult to see how this class of beneficiaries can be said to constitute a well-defined section of the public connected together by a common quality or characteristic." Although it was recognised that even the second class of beneficiaries were members of the Rana caste and were residing in Ahmedabad, the distinguishing feature, in the view of the High Court, was that the second section or class consisted of persons who had been accepted by the caste according to its old custom or usage. This led the High Court to conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unity or caste was entitled to exemption but under the Act of 1961, a charitable trust which is created for such benefit on or after the first day of April, 1962, would be disentitled to the exemption. In the present case the trust was created prior to first April, 1962, and, therefore, no question arises of its not being entitled to the exemption if other conditions were satisfied even though it was created for the benefit of the Rana caste of Ahmedabad. It is well-settled by now and the High Court also has rightly taken that view 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on comprises two classes of members of the Rana caste residing in Ahmedabad, one class consisting of those who are natives of Ahmedabad while the other class consists of such persons who are admitted by the Rana caste according to the old custom or usage of the community. The reason which prevailed with the High Court for treating the second class as not being united with the first class by a common characteristic or attribute was that its members have to be accepted by the community according to the old custom or usage and that the entry of the members of this class into the Rana caste residing in Ahmedabad was dependent on the decision of the caste to admit them. We are altogether unable to concur in the approach or the conclusion of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the predominant content and requirement of the clause defining " beneficiaries " in the constitution of the assessee is the factum of their belonging to the Rana community of Ahmedabad. The common quality, therefore, uniting the potential beneficiaries into the class consists of being members of the Rana caste or community of Ahmedabad whether as natives or as being admitted to that caste or community under custom or usage. The mere fact that a person of the Rana community who is not an original native of Ahmedabad has to prove his credentials according to the custom and usage of that community to get admitted into that community cannot introduce a personal element. In Oppenheim v. Tobacco Securities Trust Co. Ltd., the trustees were dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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