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257. The contention that the objects of the assessee did not fall within the category "advancement of any other object of general public utility" and were, therefore, not charitable within the meaning of section 2 clause (15) cannot, in the circumstances, be allowed to be raised in these References.

But even if such a contention were permissible, we do not think there is any substance in it. The law is well settled that if there are several objects of a trust or institution, some of which are charitable and some non- charitable and the trustees or the. managers in their discretion are to apply the income or property to any of those objects, the trust or institution would not be liable to be regarded as charitable and no part of its income would be exempt from tax. In other words, where the main or primary objects are distributive, each and everyone of the objects must be charitable in order that the trust or institution might be upheld as a valid charity Vide Mohd. Ibrahim v. Commissioner of Income-tax and East India Industries (Madras) Ltd. v. Commissioner of Income-tax. But if the primary or dominant purpose of a trust or institution is charitable, another object which by itself may not be charitable but which is merely ancillary or incidental to the primary or dominant purpose would not prevent the trust or institution from being a valid charity: Vide Commissioner of Income-tax, Madras v. Andhra Chamber of Commerce(3) The test which has, therefore, to be applied is whether the object which is said to be non-charitable is a main or primary object of the trust or institution or it is ancillary or incidental to the dominant or primary object which is charitable. It was on an application of this test that in Commissioner of Income-tax v. Andhra Chamber of Commerce (supra), the Andhra Chamber of Commerce was held to be a valid charity entitled to exemption from tax. The Court held that the dominant or primary object of the Andhra Chamber of Commerce was to promote and project trade, commerce and industry and to aid stimulate and promote the development of trade, commerce and industry and to watch over and protect the general commercial interests of India or any part thereof and this was clearly an object of general public utility and though one of the objects included the taking of steps to urge or oppose legislation affecting trade, commerce or manufacture, which, standing by itself, May be liable to be condemned as non-charitable, it was merely incidental to the dominant or primary object and did not prevent the Andhra Chamber of Commerce from being a valid charity. The Court pointed out that if "the primary purpose be advancement of objects of general public utility, it would remain charitable even if an incidental entry into the political domain for achieving that purpose e.g. promotion of or opposition to legislation concerning that purpose, was contemplated." The Court also held that the Andhra Chamber of Commerce did not cease to be charitable merely because the members of the chamber were incidentally benefitted in carrying out its main charitable purpose. The Court relied very strongly on the decisions in Commissioner of Inland Revenue v. Yorkshire, Agricultural Society and Institution of Civil Engineers v. Commissioner of Inland Revenue for reaching the conclusion that merely because some benefits incidentally arose to the members of the society or institution in the course of carrying out its main charitable purpose, it would not by itself prevent the association or institution from being a charity. lt would be a question of fact in each case "whether there is so much personal benefit, intellectual or professional, to the members of the society or body of persons as to be incapable of being disregarded".

The Court laid down that if the object of the charitable trust is advancement of any object of general public utility, any income derived by it from any activity for profit, will not be entitled to exemption under s. 11 of the Act, having regard to the words "not involving the carrying on of any activity for profit", introduced in the definition of the term 'charitable purpose' as contained in s. 2 (15).

Khanna J., speaking for the Court, pointed out that as a result of the addition of the words "not involving the carrying on of any activity for profit", at the end of the definition in s. 2(15) of the Act, even if the purpose of the trust is "advancement of any other object of general public utility", it would not be considered to be "charitable purpose" unless it is shown that the advancement of such object does not involve the carrying on of any activity for profit, saying "It is also difficult to subscribe to the view that the newly added words "not involving the carrying on of any activity for profit" merely qualify and affirm what was the position as it obtained under the definition given in the Act of 1922. If the legislature intended that the concept of charitable purpose should be the same under the Act of 1961, as it was in the Act of 1922, there was no necessity for it to add the new words in the definition. The earlier definition did not involve any ambiguity and the position in law was clear and admitted of no doubt after the pronouncement of the Judicial Committee in the cases of Tribune and All India Spinners' Association. If despite that fact the legislature added new words in the definition of charitable purpose, it would be contrary to all rules of construction to ignore the impact of the newly added words and to so construe the definition as if the newly added words were either not there or were intended to be otiose and redundant."

The Direct Taxes Laws Committee in Chapter 2 (Interim Report, December 1977) on charitable trusts considered the question whether the above expression in the definition should be deleted and recommended the deletion of the above expression stating:
"We have received a large number of representations on the hardship caused as a result of the total banning of activity for profit so far as trusts having the fourth category objects are concerned. It has been pointed out that activities for ;. profit are essentially fund-raising in nature, without which charities cannot exist. We find considerable substance in these representations. We are aware that some trusts have abused the provisions enabling them to carry on business ' I and that, sometimes, expansion or consolidation of business is by itself, sought to be justified as furtherance of charity. such abuses would particularly arise where a business is merely held by a charitable trust as property unconnected with the objects of charity. The remedy, in our opinion, lies in the direction of proper enforcement of the provisions relating to application of trust funds for charitable purposes and not of totally banning all activities for profit. Moreover, it is noticed that charitable trusts generally have objects falling under all the four categories. Very often, a trust has come into difficulties on account of a single object under the fourth category, even though all the important objects fall under the first three categories. We, therefore, recommend deletion of the words "not involving the carrying on of any activity for profit" occurring in section 2(15)."

The Government, however, has not accepted the recommendation. I fail to comprehend when the recommendation has not been acted upon by the Government by suitable legislation, how can this Court by a process of judicial construction achieve the same result.

Fears expressed at the Bar that this harsh measure enacted by, Parliament has shrivelled and dried up many genuine charities, does not take into account that it had to step in when the tax exemptions available to charitable and religious trusts started being misused for the unworthy purposes of tax avoidance. The law has been so re- structured to prevent allergy to taxation masquerading as charity. It cannot be disputed that many business houses have abused the provision relating to exemption from tax by carrying on activities for profit as a means for expansion and consolidation of business, which was sought to be justified as in furtherance of charity, i.e., charity became big business. Now, the law is designed to prevent this misuse of tax exemption in the name of charity. It is not the function of a court of law to give the words a strained and unnatural meaning. It may be that many genuine charitable trusts promoting objects of general public utility are severely affected and are caught in-between the two extremes. But this call for a change in the law. I am only reiterating what has been said over and over again in deal with taxing Acts. In Cape Brandy Syndicate v. Inland Revenue Commissioner(l) the principle was formulated and stated by Rowlat J. in his own terse language: