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TMI Blog1971 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, doing acts to improve the education in the community, to give medical help to the community, etc. The Income-tax Officer took the view that the objects were not charitable and, therefore, the assessee was not entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 benefit of the community or a section of the community as distinguished from private individuals or a fluctuating body of private individuals ?" There can be no doubt, according to the High Court, that the beneficiaries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 that all the beneficiaries comprised in this class were not united by a common characteristic or attribute. The question referred was answered in the negative. Section 4(3)(i), to the extent it is material, is in the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 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 persons in a particular country or State. It is sufficient if the intention to benefit a section of the public as distinguished from a specified individual is present. This court in Commissioner of Income-tax v. Andhra Chamber of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 the High Court on the above point. We may usefully refer to the judgment of Lord Greene M. R. in In re Compton : Powell v. Compton. The Master of the Rolls declared that no definition of what was meant by " a section of the public " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential 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 directed to apply certain income in providing for the education of children of employees or " former employees " of a British limited company or any of its subsidiary or allied companies. It was held by the House of Lords by a majority th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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