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Showing contexts for: charitable trust objects in Commissioner Of Income-Tax, Bombay ... vs Trustees Of The Jadi Trust on 21 April, 1981Matching Fragments
2. It is not necessary to refer in detail to the charitable purposes for which the HCJ Trust was created because it has been disputed that the purposes referred to in the trust deed dated 29th March, 1963, viz., relief of the poor, advancement and propagation and learning, giving medical relief and the advancement of any other object general public utility were charitable purposes. THe trust deed of 29the March, 1963, also referred to certain other charitable purposes such as erecting or helping in the erection of building or otherwise providing housing accommodation to or for the benefit of the poor, making available to the poor including the lower middle class persons the benefit of sanatorium or health home or a home for rest and recreation at any place in India, giving scholarships or loans to students for prosecuting their studies and giving monetary aid or other help for relief from natural calamities like famine, floods, cyclone, tempest, earthquake or otherwise. The trust deed on 5th March, 1968, by which the assessee-trust was created reproduced in detail the relevant clauses 4,5 and 6 of the trust deed dated 29th March, 1963.
4. The assessee-trust made a claim under s. 237 of the I. T. Act, 1961 (hereinafter referred to as "the Act"), for the two assessment years in question for a refund of the tax paid at source in regard to the dividends on the ground that the income of the trust was exempt under s. 11 of the I. T. Act, being income derived from the property held under trust wholly for charitable purposes. This claim was, however, rejected by the ITO holding that the income of the trust was not exempt under s. 11 of the Act on the ground that, (1) the settlor had not settled upon trust the corpus of the trust but had settled upon trust only the income arising from that trust fund so that the trust fund was not held on trust for charitable purposes, and (2) that the object of the trust should itself be charitable an the trust fund should be self-operative whereas the object of the assessee-trust was only to give a donation to another trust. In appeal by the assessee-trust, the finding of the ITO on the first ground was set aside and the AAC held that the corpus of the trust consisting of the shares of certain companies were settled upon the trust.
6. The assessee-trust challenged this view of the AAC before the Tribunal. The Tribunal found that the objects of the HCJ Trust admittedly constituted charitable purposes as contemplated under s. 2(15) and under s. 11 of the Act and that the present was a case of a trust within a trust holding that the trust deed dated March 5,1968, created twin trusts, viz., one requiring the trustees of the Jadi Trust to pay the income from the trust fund to the HCJ Trust and the second requiring the trustees of the HCJ Trust to spend the income on charitable purposes for the period up to January 31, 1983. The Tribunal took the view that for the period March 5, 1968, to March 31, 1983, the trust fund was settled upon trust for charitable purposes to be carried out through the medium of the HCJ Trust.
17. The Commissioners further ordered that the case before them had to be decided on the basis that the trust's donations to the foundation will be used for the general furtherance of the foundation's authorised charitable objects and on that basis held that the sums in dispute were applied by the trust for charitable purposes only.
18. A case was stated for the opinion of the court at the instance of the Crown and the question of law for the opinion of the court was, whether, on the facts stated in the case, the commissioner's decision was erroneous in point of law. Slade J., who heard reference, referred to the meaning of the word "applied" given by Lord Macnagthen in Williams v. Papworth [1900] AC 563 at 567 (PC) in which Lord Macnagthen had observed that "the word `applied' does not import a power of selection : it simply means `devoted to' or `employed for the special purpose of'". The learned judge then went on to observe as follows in the context of the question whether money has been "applied for charitable purposes" for the purposes of s. 360 (1) of the Income and Corporation Taxes Act, 1970, and s. 35 (1) of the Finance Act, 1965 (pp. 164, 165 of [1980] 3 WLR) :