TMI Blog1998 (8) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... d before us. The assessee relied upon the clauses in the trust deed extracted in the order of the Appellate Assistant Commissioner for the years 1977-78 copy of which was placed before us. The Revenue does not dispute the correctness of its contents. That order merely sets out certain clauses in the trust deed. In the absence of the trust deed we can only refer to the clauses so extracted and decide the assessee's claim with reference to those clauses as the assessee relies solely on those clauses to support its claim for exemption of its income under section 11 of the Act.Counsel for the assessee pleaded helplessness in the matter of production of the original trust deed as his client had failed to respond to his repeated letters. We are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graphs six and seven. The business of the trust may be transacted at meetings of the trustees or by circulationand in the former case the opinion of the majority of trustees present and voting shall prevail and have full force and effect. It shall be open to the trustees to delegate to the secretary or other person chosen from amongst themselves the performance of any routine business. It shall further be open to the trustees to frame from time to time bye-laws and rules for the more convenient transaction of business subject to the confirmation of His Excellency the Governor of Madras. Clause 5 reads as under : "The trustees shall maintain an account of the income and expenditure in regard to the Assembly Rooms and shall once a year p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one which is capable of being regarded us an object of general public utility - the object therein being the promotion of trade and commerce in art silk - the fact that it makes profits incidentally would not by itself disentitle it from being treated as a charity. Counsel also referred to the decision of this court in the case of Commissioner of Income-tax vs Sri Thyaga Brahma Gana Sabha (Regd.) [1991] 188 ITR 160, wherein the court held that the promotion of art and music is an object of general public utility and a small profit made incidentally by letting out the property owned by the trust would not deprive the assessee therein of its status as a charitable trust. Counsel lastly referred us to the passages at paragraphs 544 to 546 in H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty intended for subserving an object of general public utility not involving the carrying on an activity for a profit is now settled by the decision of the Constitution Bench in the case of Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1 (SC). In the light of the ratio of that decision it is clear that if the object of a trust is merely to make available a property owned by it to the members of the public to hold meetings to stage dramatic or other entertainment for the benefit of the public and that trust satisfies the other provisions of the Act such a trust can be regarded as charitable so long as the profit-making if any is only incidental and minor. A close scrutiny of the clauses of the trust deed relied upon by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified charitable objects. They are free to utilise the monies subject only to their obligation to invest the surplus in the securities authorised by section 20 of the Indian Trusts Act. It is no doubt open to them to utilise the income and also the excess amount if any available with them for creating the depreciation reserve as also for meeting the expenses of periodical renewal. It is also open to them to utilise those monies to constitute a provident fund for the employees of the Assembly Rooms. Such permissible activity however, does not imply a prohibition in respect of other possible activities. The obligation to invest monies in the trust and the securities authorised by the Trusts Act is only for the surplus that remains in the hand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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