TMI Blog1987 (12) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... s been allowed. By exhibit P-1 assessment order dated December 19, 1978, the Income-tax Officer held that income received by the trust cannot be stated to be received specifically on behalf of or for the benefit of any one person in terms of the provisions made in section 164(1) of the Act. The claim for deduction under section 80C was also found not eligible. The total income was fixed as 65%. Aggrieved by the order of assessment, the petitioner preferred revision before the Commissioner. It was contended that the reopening was bad in law because no order of assessment was seen issued., The petitioner also claimed exemption on the round that it was a charitable institution. The assessee further contended that the trust deed dated March 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would apply. The income is held under trust wholly for charitable and religious purposes. If the income is not exempted under section 11 or 12 of the Act, the income is chargeable is income of an association of persons tinder section 164(2) of the Act. The shares are known and implicit in the deed of trust. The assessment for the year 1975-76 has been concluded by exhibit P-5 order of the Tribunal. The finding of the Appellate Tribunal regarding status has become final. For the year 1979-80, the petitioner was completely exempted from tax. Exhibits P-1 and P-3 are barred by res judicata. On these grounds, the petitioner has prayed for quashing exhibits P-1 and P-3 and for issuing a writ prohibiting the respondents from treating the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Cherian with the intention that the income from the properties transferred should be utilised for the maintenance of his daughter Sarah Cherian and the balance, if any, for charitable purposes. The properties had been transferred to be held in trust according to the terms mentioned. The trust is called Sarah Cherian Trust. The donor was to be the managing trustee for his life. The managing trustee was entitled to dispose of, convert and invest the trust estate in such manner as he shall think best, for carrying out the objects of the trust. The managing trustee had the absolute discretion to sell, mortgage or dispose of the trust properties, convert the same into cash or invest the proceeds in any manner he deems fit for carrying out th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on individual level involves more personal involvement and concern for the giver." The Commissioner in exhibit P-3 has adverted to these clauses and concluded that the trust cannot by any accepted standards be regarded as a charitable trust. The reasoning for drawing such a conclusion is that the purposes of the trust include maintenance and meeting the needs of any other relatives of the donor at the absolute discretion of the managing trustee and a trust created primarily for the benefit of the members of the settlor's family was not for charitable purposes. To support this conclusion, the decisions in the case of Trustees of Gordhandas Govindram Family Charity Trust v. CIT[1973] 88 ITR 47 (SC) and in the case of Abdul Sathar Haji Moos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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