TMI Blog1984 (2) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... children of the employees of the members of Shree Market Silk Merchants' Association. He relied on the decision of the Bombay High Court in the case of Zenith Tin Works Charitable Trust v. CIT [1976] 102 ITR 119. On appeal, the AAC confirmed the ITO's order. Thus, appeals are filed before the Tribunal for all these years. There are no appeals for the assessment years 1975-76 and 1979-80 because, it is pointed out, there was no demand of tax for these years. 2. The Shree Market Silk Merchants' Association is an AOP in existence for a long time for the purpose of looking after the interest of the silk industry and the silk merchants. This institution has been granted exemption under section 11 by the revenue and the same is enjoyed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be received in this fund as and by way of gift without any terms from the members and non-members shall be accepted. Moreover, means of income as and when may be deemed proper by the executive committee shall be created. (3) The executive committee has been given all the powers to administer this fund, along with the power to appoint the sub-committee and to frame rules in this matter. " Rules were also made for inviting the applications for scholarship, grant of scholarship, etc., to the children of the employees, brokers, etc. The education fund at the relevant time had a corpus of more than Rs. 2 lakhs and the objects as per the rules of the fund made under the resolution were pursued out of the income of the fund. The assessee-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducation fund are employees of the company and so are not the wider public whose presence was a necessity for treatment of the assessee as a public charitable trust. In our view, whatever merits this assertion and counter-assertion by the assessee in this behalf have, it is not necessary to decide this in the appeals before us. The main association, Shree Market Silk Merchants' Association has been accepted to be and held by the department to be entitled to exemption under section 11. It is as a part of the activity of that association that the education fund for specific purposes, viz., scholarship to children of employees, etc., was created. If, as the department has held, this particular function of the main association performed through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g and for several years getting the exemption as a charitable purpose. It is for the first time for the years under appeal that this claim was rejected. Be that as it may, looking to the origin of the funds and the nature of this assessee, it would seem that even treating the present assessee as a separate taxable entity at all had not been properly done, but is a mistake. Where an assessee entitled to exemption under section 11 has got several activities and makes investments in diverse forms to single out any particular activity or a particular investment and say that from the manner of investment or activity, that activity alone is a separate assessment and is also not entitled to relief under section 11 would be preposterous. If any par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members also have made, though indirectly, their contribution to the silk industry and to the objects of the main trust. Even if the scholarship scheme is regarded from a purely narrow point of view, it cannot be taken out of the charitable sphere of the main association. The cases referred to by the authorities below are cases of private employers giving benefit to their employees only through the medium of a charitable trust. The present case is entirely different from these firstly, because the benefit is not to the employees of the institution ; secondly, the institution itself is a charitable one and an addition to its employees would only mean an extra expenditure of the institution on salaries. The cases cited, therefore, do not hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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