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6. For the assessment year 1975-76, the assessee filed a return of income before the ITO, Bombay, Refund Circle 23-7-1976. The entire income under the head 'capital gains' and 'other sources' was claimed to have been applied to the acquisition of capital assets. A nil taxable income was returned. The file was subsequently transferred to the ITO, Poona, and before him written submissions were made claiming that the trust was a charitable one having for its objects the charitable purpose of imparting education. Reliance was placed on Clause 5 of the trust deed and the decisions of the Madras High Court and various other cases. It was also claimed that the assessee was exempt under Section 10(22) of the Income-tax Act, 1961 ('the Act'), as the assessee ran an ashram where intensive training in education was imparted. The ITO rejected the assessee's contentions. He held the trust as having an object of general public utility. The trust was running a business activity provided in Clause 5(b) of the trust deed and made large profits disclosed in a statement of account. The activity was well organised and systematic. Books were published and sold at a very high prices, the sales of books being of the order of Rs. 15,00,000 with a profit of nearly Rs. 1,72,000. The receipts including commission on purchase of books of about Rs. 2,72,000 and subscription for news letter of Rs. 1,400. The assessee claimed that voluntary services of ashramites were available in the activities of publication and sale of books, thus resulting in an estimated gain in notional charges of about Rs. 2,95,000. Under Section 80QQ of the Act, deduction of 20 per cent, i.e., Rs. 34,000, was also available. On this basis the so-called business activity, according to the assessee, in fact resulted in a loss as against the profit alleged to have been made. The assessing officers did not accept the above claim of the assessee in the final assessment made.

15. Claiming that the assessee is entitled to exemption in the alternative under Section 11, the learned counsel has put his claim under 3 broad heads:

(i) firstly, that it is a general charitable purpose dealing with education ;

(ii) secondly, that the objects of the trust constitute objects of general public utility ; and

(iii) lastly, that, at any rate, the purpose is religious in nature.

As a prelude to his argument, it is pointed out that the assessee-trust is registered with the Charity Commissioner as a charitable trust. It has also obtained clearance from the Commissioner under Section 80G. These two clearly indicate that the profits, if any, could not go to private parties, thus ensuring the charitable nature of the trust. The Charity Commissioner would not have recognised the institution under the Trust Act unless the objects were charitable. For the purpose of this recognition whether the activity even if it is of general public utility involves carrying on an activity for profit, is not relevant. It constitutes a separate issue. Even the authorities below have accepted that what the assessee carries on is an object of general public utility affording persons who attend the ashram, certain specific advantages which could be given only by the assessee. Dealing with the profit aspect of this activity mainly comprised under the publication of books, it is emphasised that there is no profit in reality.

22. Dealing with the claim for exemption as a charitable purpose, it is pointed out that the mere fact that it is recognised under the Bombay Trust Act or has been able to obtain a certificate under Section 80G for some years from the Commissioner cannot be conclusive as to its nature. These are administrative Acts and also ignore the fact that if some objects are charitable, it could be a public trust even if there are others which are not. A charitable purpose should be charitable for all times, the rule of perpetuity does not apply, what the trust does in a particular year is not relevant. The same consideration which apply in connection with Section 10(22) would apply to exemption under Section 11 with reference to education. According to the learned counsel, the assessee does not serve any purpose of general public utility. Being enlightened, even educated on the pet theories, notions or thinking of a particular person does not serve as an object of general public utility. Even if this claim is accepted, according to the learned counsel, the manner in which it is achieved is through discourses for which often an entrance fee is charged, through books, normally if not excessively priced, and tapes, etc. The sale and distribution of these would clearly be an activity for profit under Section 2(75). Exemption under Section 11 on this ground cannot, therefore, be availed of. The assessee clearly does what any trader in books would do. Nor, according to the learned counsel, can a claim of the assessee as a religious institution be accepted. Acharya Rajneesh does not expand any religion even if it be understood in its widest sense. On the contrary, according to the learned counsel, he advocated, as is well known from papers, books, etc., certain course of conduct which at least in some circles is regarded as morally questionable, if not openly repugnant to the normal norms of civilised society. Even if this be regarded as religion, according to the learned counsel, it would be so crude as not to be recognised as a religious practice to be adopted in civilised society.

The exemption in this case relates to the income from property held under trust for certain purposes. The exemption is available if the purposes are charitable. Even though the exemption applies to the income, the income under consideration is from 'property held under trust'. The criterion for decision, therefore, would depend on the property and the nature of the trust rather than the nature of income itself. A trust being an obligation attached to property with confidence reposed by the settlor the nature of the property when once a trust is constituted cannot change. If, therefore, a property is held under trust for charitable or other purpose, it should continue to be held for the same purpose if the provisions of Section 11 are to be available. Since the nature of a property is to be decided by its position relating to the trust deed whether the exemption is available under Section 11 or not would automatically depend on the trust deed itself. It is only, therefore, on a proper reading of the trust deed that the eligibility for exemption be determined and not merely by finding out whether in a particular previous year the assessce utilised the income for charitable purposes or not. If under the provisions of the trust deed the property is not held for charitable or religious purposes, it would be of no avail. This latter can be ascertained only by reading and interpreting the objects of the trust itself, as could be gathered from the trust deed. Even in this case the analogy with decisions under the Wealth-tax Act as to the nature of a trust on the valuation date and the beneficiaries therein is of limited help to the assessee. Dharmaposhanam Co. v. CIT [1978] 114 ITR 463, where the Supreme Court held that whether a trust is for a charitable purpose or not falls to be determined with reference to all the objects for which the trust has been brought into existence and not merely the activities actually conducted by the assessee, supports our view above.