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(11) On appeal it was contended that the sole and dominant purpose of the Trust was for charitable purposes including advancement of public utility. The Appellate Assistant Commissioner concurred with the view of the Income-tax Officer and confirmed his findings that some of the objects of the Trust were not of charitable nature and that the Trustees in their discretion had been authorised to utilise the Trust income for any of the purposes enunciated in the Trust deed. The Appellate Assistant Commissioner therefore held that the Trust was of a noncharitable nature and no part of its income was exempt from tax. The assessed then preferred appeals to the Tribunal and urged that no clause of the Trust deed was in conflict with the provisions of Section 4(3) (i) of the Act. The Tribunal held that objects of the Trust were wholly for religious and charitable purposes. The Tribunal further observed that in the Deed of Trust the Founder had expressed in unambiguous terms his anxiety that the deed should not become invalid for the reason that some object might be considered unlawful. The Trust was, accordingly, held entitled to exemption under Section 4(3) (i) in respect of the amount spent on religious and charitable purposes within the taxable territory. On applications by the Commissioner of Incometax, the Tribunal referred the question reproduced above to this Court.

(13) Although the words "charitable purpose" have a wide connotation, the language of Section 4(3)(i) makes it manifest that to claim exemption under the clause it has to be shown that the income was derived from property which was held under trust or other legal obligation wholly for religious or charitable purposes. The words "wholly for religious or charitable purposes" show that the income from trust property would only be exempt if all the objects of the trust are of a religious or charitable nature. In case a trust has ten distinct and separate objects and nine of them are of a religious or charitable nature but the tenth is not of a religious or charitable nature and there is nothing to prevent the trustees from applying the property of the trust in carrying out any of the objects of the trust including the object which is not of a religious or charitable nature. the income derived from the property of the trust would not be exempt from taxation under the above clause. The reason for that is that the trustees in. such an event can apply the property of the trust exclusively for that object of the trust which is not of a religious or charitable nature. It has, therefore, been enacted that to claim the benefit of the above exemption the property must be held under trust or other legal obligation wholly forreligious or charitable purposes. The only relaxation, which has been permitted in such cases, is that if 'all the primary objects of the trust are of a religious and charitable nature, the existence of an ancillary or secondary object which is not of a religious or charitable nature but which is intended to subserve the religious and charitable objects, would not prevent the grant of such an exemption. This is so because such an ancillary or secondary object even though not of a religious or charitable nature, is intended to effectuate the main and primary objects of the trust which are of religious or charitable nature.

(14) We may in this context refer to some of the decided cases on the subject. In Maulana Mohammad Ibrahim Riza Malak v. Commissioner of Income-lax Air 1930 P.C. 226 some property was vested in the assessed as the head of Dawood Borah tribe. The profits from the property were to be treated as part of the income of the community. On reference to the trust-deeds it was found that some of the purposes were not of a religious or charitable nature. It was held that the income derived from the property was not entitled to exemption under Section 4(3) (i) of the Act and that it was assessable to incometax. A case of which the facts are more akin to those of the present case, is East India Industries (Madras) Private Limited v. Commissioner of Income-tax . In that case a trust was established for various objects, one of which was to manufacture buy, sell and distribute pharmaceutical, medicinal, Chemical and other preparations and articles. The objects included several charitable and religious purposes. According to one of the clauses of the trust-deed, the objects shall be independent of each other and the trustees would have discretion to apply the property of the trust in carrying out all or any of such objects of the trust as the trustees might deem fit. Question arose whether the property o.f the trust was held wholly for religious or charitable purposes within the meaning of Section 4 (3)(i) of the Act. It was held that, as the carrying of a business of manufacture, sale & distribution of pharmaceutical, medicinal and other preparations was neither charitable nor reli- gious in character, and as the trustees could under the deed validly spend the entir income of the trust on that non-charitable object, the trust property was not help wholly for religious or charitable purposes within the meaning of Section 4(3)(i). Ramaswami, J., speaking for the court observed: "INthe present case, it appears from the deed of trust that one of the objects of the trust, .namely, item 4, is not for charitable or religious purposes. Item No. 4 is 'to manufacture, buy, sell and distribute pharmaceutical, medicinal, Chemical, and other preparations and articles such as medicines, drugs, medical and surgical articles, preparations and restoratives of food'. It may be that most of the other objects of the trust are religious and charitable in nature but it item No. 4 is not charitable, then the conditions envisaged by section 4(3)(i) of the Act are not fulfillled a,nd the exemption conferred by section 15B of the Act cannot be applied. Clause 5(i) of the trust deed states that 'the trustee shall have power to apply the whole or any part of the trust property or fund whether capital or income in or towards payment of the expenses of the trust or for or towards all or any of the purposes of the trust provided any property or money held in special trust shall be applied only for that purpose and not otherwise'. In the present case, there is no special trust that is to say no particular item of property has been burdened with the performance of any specific object of the trust. It is therefore mainfest that under clause 5(i) of the trust deed it is open to the trustees to utilise the income for any one of the objects of the trust to the exclusion of all other objects. In other words it would not be a violation of the trust if the trustees devoted the entire income to the carrying on of a business of manufacture, sale and distribution of pharmaceutical, medicinal and other preparations. In our opinion this particular object of the trust is neither charitable nor religions in character. If the trustees can, under a trust held validity, spend the entire income of the trust on this non-charitable object, it is difficult to hold that the trust property is held under a trust or other legal obligation wholly for religious or charitable purposes within the meaning of section 4(3)(i) of the Act.' (15) Similar view was taken in the case of Lakshmi Narain Lath Trust v. Commissioner of Income-tax One of the objects of the trust deed in that case was not of a religious or charitable nature though in fact it was found that the income of the trust had been used exclusively for purposes. It was held that in view of the full discretion in the trustees to spend the trust funds for an object other than a religious or charitable nature, the exemption under section 4(3)(i) of the Act was not available to the assessed. In the case of Commissioner of Income-tax v. Andhra Chamber of Commerce, (supra), the primary objects of the Andhra Chamber of Commerce were to promote and protect trade, commerce and industries, to aid, stimulate and promote the development of trade, commerce and industries, and to watch over and protect the general commercial interests of India or any part thereof. It was provided that the income and property of the Chamber of Commerce would be applied solely towards the promotion of its objects. The Chamber of Commerce, after purchasing a building, made some alterations in it a.nd moved its offices into that building and let out portions of it to tenants. Question arose whether the building was property held under a trust or other legal obligation wholly for charitable purposes and the income from that building was exempt from tax under section 4(3)(i) of the Act. It was held that the primary objects of the trust being of general public utility were of a charitable nature. It was pointed out on behalf of the revenue that according to clause 3(g) of the memorandum of association of the Chamber, it could urge and oppose legislative and other measures affecting trade, commerce or manufacturers, and such objects of the Chamber was not wholly of a charitable nature. Repelling the above contention, Shah, J., speaking, for the Court, observed: "BUTclause 3(g) is not the primary object of the assessed : it is merely incidental to the primary objects of promotion or protection of trade, commerce and industries, or to aid stimulate and promote the development of trade, commerce and industries or to watch over and protect the general commercial interests.

(17) Keeping the above principles in view, we are of the opinion that the property held by the assessed-trust was not "wholly for religious or charitable purposes" and as such the assessed is not entitled to the exemption under section 4(3)(i) of the Act. The objects of the trust have been reproduced above and though a good many of them are of a religious or charitable nature, some of them are not a religious or charitable nature. Under clause 5(a)(v) of the trust deed dated April 12, 1948, it can be a valid object of the trust to open and establish an industrial or commercial concern providing employment to persons under clause 5(b) of the deed for the purpose of carrying out the object of the trust, the trustees may purchase or otherwise acquire any property rights, leases or concessions or might acquire or start establish, equip or close any business, undertaking or industry. Power has also been given for that object to the trustees to purchase, acquire or undertake the whole or any part of property and/or liabilities of any person, firm or company. According to clause 11 of the trust deed, the trustees are authorised to acquire, hold, carry on and manage any trade or business or any share thereof. The trustees have also been given full power and discretion in employing the whole or any portion of the Trust property or any fund of the Trust in such trade or business or running business concerns or Managing Agencies or other investment or shares or securities of properties as they may deem proper. The trustees have further been given power to change investment of the trust property into such trade or business or investments or shares of public or private limited companies and other securities as they might deem proper. Power has also been given under clause 16 of the trust deed to the trustees to borrow money for the use and benefit of the trust. According to clause 30 if any object of the trust was found to be invalid or contrary to law it would not affect the other objects of the trust. The various objects of the trust can, therefore, be taken to be independent. There is nothing in the trust deed which can prevent the trustees from applying the entire trust property for an object which is not of religious or charitable nature like the one mentioned in clause 5(a)(v) of the trust deed for establishing an industrial or commercial concern providing employment to persons. The condition in that clause that the industrial or commercial concern must provide employment to persons is manifestly superfluous and redundant because an industrial or commercial concern must in the very nature of things provide employment to some persons. The establishment of industrial or commercial concern normally postulates a profit motive and there is nothing in the trust deed which rules out the element of profit by the trust. A trust founded for the object of setting up industrial or commercial concern would obviously be not for a religious or charitable purpose. It also cannot be said that the .non-religious and non-charitable objects of the trust in the present case are not primary objects but are of secondary and ancillary nature to subserve other objects. We, therefore, have arrived at the conclusion that the property of the trust in question cannot be held to be wholly for religious or charitable purposes.