TMI Blog2008 (2) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. P. K. R. Menon and George K George for the respondent. JUDGMENT The judgment of the court was delivered by C. N. RAMACHANDRAN NAIR J.— The appellant, a trust engaged in the publication of a Malayalam newspaper by name Madhyamam, has filed this appeal under section 260A of the Income-tax Act, 1961, challenging the order of the Income-tax Appellate Tribunal confirming disallowance of income-tax exemption claimed by the appellant as a charitable trust under section 11 of the Act. Even though the appellant started the publication in 1987 in the course of several years the appellant was engaged only in one activity, viz., the publication of newspaper and the entire profits are said to be utilised for developmental purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing centres, rest houses and other amenities for and to take care of orphans, destitutes and the afflicted. II. Assist the poor and needy to set up and/or run vocations and industries by granting financial aid/or other assistance. III. To set up and run any industrial or other projects for the benefit of the poor and needy persons without any profit motive." 2. The assessment involved in this case is for the assessment year 1992-93. It is stated that the Tribunal decided the claim against the appellant for all the assessment years up to 2002-03 except for the year 1990-91 and the Department has filed appeal to this court against the Tribunal's order for the year 1990-91. 3. Learned counsel appearing for the assessee heavily reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kshana Trust v. CIT [2001] 101 ITR 234 (SC) and Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1 (SC) and contended that the assessee is not entitled to emption, as the business carried on by it itself is not for charitable purpose and the assessee has not spent any income for charitable purpose stated in the objects clause of the trust. 5. Section 11(1)(a) of the Act provides for exemption to the extent of income applied for charitable purpose. The section provides for accumulation and setting apart up to 25 per cent. of the income of the previous year for future application. Admittedly, the appellant has not spent any amount towards advancement of any of the charitable objects such as education, medic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness consists of printing and publication of books or publication of books or is of a kind notified by the Central Government in this behalf in the Official Gazette ; or (b) the business is carried on by an institution wholly for charitable purposes and the work in connection with the business is mainly carried on by the beneficiaries of the institution. and separate books of account are maintained by the trust or institution in respect of such business." The provision after the amendment with effect from April 1, 1992: "(4A) Sub-section (1) or sub-section (2) Or sub-section (3) or sub-section (3A) shall not apply in relation to any income of a trust or an institution, being profits and gains of business, unless the business is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption, because exemption is available in respect of the income only if the business carried on by the trust is incidental to the attainment of the objects of the trust. Admittedly, the appellant-trust has not utilised or set apart any part of the income for any of the charitable purposes referred to in the objects clause, viz., education, medical relief or relief of the poor. The appellant is only engaged in publication of the newspaper which is run on commercial lines including charging of commercial tariff for advertisements and charging of price for the newspaper at rates comparable to other newspapers run for profit. However, the appellant's case is that the business of printing and publication of newspaper itself is an object of gen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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