TMI Blog1974 (1) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... d any amount for the following objects and purposes and so that the decision of the trustees as to the object of the trust or the beneficiaries shall be final and binding on all persons claiming under this trust and shall not be questioned in any court of law or otherwise howsoever :-- (i) For giving monetary help to poor deserving members of the Vaishya community. (ii) For giving financial help by way of gift, or loan without interest, to enable the poor and deserving members of the Vaishya community to set up any business, profession or vocation. (iii) For giving financial help in the shape of money, books or otherwise for education (primary school, college and higher education and technical or non-technical education) to the poor and deserving members of Vaishya community. (iv) For giving help, financial or otherwise, on the occasion of marriage of members of the Vaishya community. (v) For giving medical aid in money or in kind to the members of the Vaishya community. (vi) For social welfare, uplift and generally for improving the condition of poor members of the Vaishya community. (vii) For giving help without reference to caste or creed in times of calamity, mel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Income-tax Officer and directed him to make a fresh assessment. The assessee then filed an appeal before the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad. Before the Appellate Tribunal the assessee conceded that two of the objects mentioned in the trust deed, viz., (1) for giving financial help or otherwise on the occasion of marriage of members of the Vaishya community ; and (2) for social welfare, uplift and generally for improving the condition of poor members of the Vaishya community, may be treated as being not of public charitable nature but claimed that even then the income of the trust would be exempt from being included in the assessee's total income. The Appellate Tribunal accepted the assessee's contention that the trust having come into existence prior to the Income-tax Act, 1961, according to which such exemption cannot be claimed in respect of the income of the trust or institution created or established for the benefit of any particular religious community or caste, its provisions will not apply to the income under consideration and merely because the charity was intended to benefit generally the members of the Vaishya community the trus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be enforced. Since all the enforceable objects were charitable in nature the assessee could not be denied the benefit of Section 4(3)(i) of the Indian Income-tax Act, 1922. The Tribunal repelled this objection and dismissed the appeal filed by the assessee. Subsequently, at the instance of the assessee the Tribunal referred the aforesaid question of law for the opinion of this court. Learned counsel for the assessee argued that the two objects, viz, (1) that of giving financial help or otherwise on occasions of marriage of members of the Vaishya community, and (2) for social welfare, uplift, and generally for improving the condition of poor members of the Vaishya community regarding which it had been conceded before the Appellate Tribunal that they were not charitable in nature, were in fact objects of public charity. Accordingly, all the objects of the assessee trust were of public charitable nature and its income was exempt from being included in its total income as provided in section 4(3)(i) of the lndian Income-tax Act, 1922. Learned counsel for the revenue contended that in a reference under the Income-tax Act, after conceding before the Tribunal that two of the obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Tribunal that the same was assessable under section 9. The Tribunal accepted the contention of the assessee that the amount in question is assessable under section 10. Thereafter, at the instance of the department the question set out earlier was referred to the High Court of Calcutta for its opinion. The High Court of Calcutta did not accept the contention of the department that the amount in question is assessable under section 12 of the Act. On the other band, it came to the conclusion that the same was assessable under section 9 of the Act. As seen earlier the department had all along proceeded on the basis that that amount was not assessable under section 9 of the Act...... The department, having all along proceeded on the basis that the income of the assessee was income from two different sources, should not have been allowed to change its case......The jurisdiction of the High Court in dealing with a reference under section 66 is a very limited one. It must take the facts as stated in the statement of the case unless the question whether the findings of the Tribunal are vitiated for one or the other of the reasons recognized by law is before it. It may be that the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he trust deed shows that primarily the trust was being created for charitable purposes, even if some of the objects mentioned in the deed happened to be of non-charitable nature, the trustees could not spend any money on non-charitable objects, and such clauses would become innocuous and unenforceable, and the trust would still be a trust whose object is wholly public charity, does not appeal to us. The trust was created to serve such objects which the executants of the deed understood to be objects of public charity. They have enumerated all such objects in clause 3(2) of the trust deed. Preamble of that sub-clause reads : " To apply or spend out of the balance of such interest, dividend and income and if the trustees unanimously agree even out of the corpus of the trust fund any amount for the following objects and purposes and so that the decision of the trustees as to the objects of the trust or the beneficiaries shall be final and binding on all persons claiming under this trust and shall not be questioned in any court of law or otherwise howsoever. " This clearly shows that the executants of the deed specifically authorised the trustees to spend the trust funds in connect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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