TMI Blog1993 (1) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... e or any part thereof is not exempted under section 11(1) of the said Act ?" The assessee-trust was created by Messrs. Tata Iron and Steel Company Limited by executing a deed dated March 30, 1966. One of the objects for which the trust was created was to utilise the income earned by it for charitable purposes in India only by giving relief to the poor, education, medical relief and advancement of any other object of general public utility not involving the carrying on of any activity for profit. The assessee claimed exemption in respect of the income on the ground that the same has been applied exclusively for charitable purposes enumerated in the deed. The Income-tax Officer rejected the plea on the ground that part of the income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he trust, the desired relief was granted. While granting such relief it was wholly immaterial for the trustee as to whether the awardee was an employee or non-employee of the TISCO. There is nothing on the record to show that in any given case, the fact of employment in TISCO of the applicants has, in any way, influenced the trustee in selecting the beneficiaries. On consideration of these primary facts, the Tribunal has come to a factual conclusion that it was wrong to say that the trust was created for the purpose of granting any relief to the employees of TISCO. The Tribunal has also recorded a finding of fact that persons, who were the employees of TISCO, have been given relief out of the trust income only because they fulfilled the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or indirectly for the benefit of any person referred to in sub-section (3) : . . (3) The persons referred to in clause (c) of sub-section (1) and sub-section (2) are the following : (a) the author of the trust or the founder of the institution (b) any person who has made a substantial contribution to the trust or institution, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds five thousand rupees ; (c) where such author, founder or person is a Hindu undivided family, a member of the family (cc) any trustee of the trust or manager (by whatever name called) of the institution ; (d) any relative of any such author, founder person, member (trustee or manager) as aforesaid (e) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable purposes for which the trust has been created. Therefore, it is apparent that the properties as held by the trust are meant wholly for charitable purposes. As such, the assessee satisfies this statutory requirement as well. From a reading of the aforesaid provisions, it clearly emerges that a person can seek exemption under section 11(1)(a) of the Act only if he can at least satisfy that : (1) the purpose for which the trust has been created is a charitable purpose, and (2) no part of the income of such trust enures or has been used or applied directly or indirectly for the benefit of any person referred to in sub-section (3) of section 13 of the Act. So far as the first condition is concerned, the expression "charitable purpose" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e denied that even the employees of TISCO and their relatives are members of the community and form part of the general public and merely because they have some contractual relationship with the author of the trust, they do not lose their primary identity as general members of the society. In that capacity they are entitled to enjoy all the benefits to which the persons falling in their category are entitled. Therefore, in my view, the trust in question has been established wholly for charitable purposes. Now, coming to the second condition, as said above, it seems that even if a trust has been created wholly for charitable purposes, when subsequently it is found that its income either enures or is used or applied directly or indirectly f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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