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"The assessee is silent on the issue of seeking permission for construction of Buddha temple, which has not been mentioned in the objects of the trust. The assessee has booked the expenses under the head "Higher Buddhist Studies and research centre" but permission has been taken for construction of Buddha Temple. Further, a charitable trust should have specific objects. Where the objects are too wide, the trust may not qualify for exemption. Similarly, where there are several objects of a trust, some of which are charitable and some non-charitable and the trustees are permitted to apply its income to any of the objects in their discretion, exemption u/s. 11 of the Income tax Act, 1961 will not be available. In view of this, the exemption u/s. 11 of the Income tax Act Shambhala Chartiable Trust AYs 2007-08 to 2009-10 was claimed at Rs.50,25,127/- is disallowed and the same is .......... Applied for charitable purpose."

"To establish libraries, Reading Rooms, Archives, Museums, and Translation Bureaus:"

In course of assessment proceedings the assessee submitted that the Trust has partially constructed Institute of Higher Buddhist Studies and Research at Chakla Busty which is covered by the objects of the Trust under clause no.3 of the Deed of Trust dated 10.07.1988. When it has already been found that the assessee is engaged in the construction of Buddha Temple and the construction of Buddha Temple does not find place in the objects of Trust the contention of the assessee that the construction of the building is covered by the objects of the Trust under clause no.3 of the Deed of Trust dated 10.07.1988 is not at all acceptable and therefore, rejected. In the case of Kirtichand Tarawati Charitable Trust vs. DIT (Exemption) & Ors (Del) 232 ITR 11 where objects of the Trust were charitable but enquiry revealed that trust was engaged mainly in the construction of temple which is not a charitable activity, denial of registration of the trust was upheld.

On perusal of the objects of the trust I agree with the Ld. AO as recorded in the assessment order that a charitable trust should have specific objects and where the objects are too wide, the trust may not qualify for exemption. Similarly, where there are several objects of a trust, some of which are charitable and some non-charitable and the trustees are permitted to apply its income to any of the objects in their discretion, exemption u/s 11 of the IT Act, 1961 will not be available. In the following cases where there were charitable and non charitable objects and trustees can apply income to any of these objects it was held that the trusts were not eligible for exemption u/s 11 of the Act:

He pointed out that the purposes in the case before him, as also in the case before us, are not merely religious or pious purposes in general. They must also be for the benefit of the Dawoodi Bohra community. In that particular case Mr. Justice Marten pointed out that being gifts at a shrine, they were already consecrated to God, and presumably must be used for religious or pious purposes. Similarly, in the case before us also, the property is settled upon wakf, that is, for purposes which are considered to be religious, pious or charitable according to the notions of members of the Dawoodi Bohra community and further the income in the corpus of these properties settled upon trust must be used for Dawat purposes, that is, for the benefit of the Dawoodi Bohra community. Though the words of clauses 6, 7 and 8 are very wide in terms, in fact, that apparently wide discretion of the Mullaji Saheb is bound down by the two factors, Shambhala Chartiable Trust AYs 2007-08 to 2009-10 namely, that this is a wakf, a dedication by a Mussalman of property for purposes which, according to the notion of Mussalmans, are pious, religious or charitable, and, secondly, it must be used for Dawat purposes, that is, for purposes which go to benefit the Dawoodi Bohra community. With these two limitations operating on him, even the apparently wide discretion conferred upon the Mullaji Saheb as Dai-ul-Mutlak for the time being is confined within the four corners of these two overriding factors and in view of these two overriding factors it must be held that the properties in question settled by the two deeds of January 12, 1937, were settled upon trust for charitable or religious objects and were, therefore, entitled to exemption under section 11(1)(a) of the Act of 1961. We must make it clear that the real controversy between the parties is regarding exemption under section 11(1)(a) and not whether the trusts are wholly religious or wholly charitable. Even if the trusts are partly religious and partly charitable, so long as no part of the income or corpus can be utilised for a purpose which is not either charitable or religious, there is no doubt that the exemption under section 11(1)(a) will be available to the assessee. In the instant case we find that, in spite of the apparently wide language of the clauses of the deed of trust, in fact reading the trust deed as a whole, it transpires, transpires, particularly in the light of the decision of the Bombay High Court in Advocate-General of Bombay v. Yusufally (1), that the apparently wide discretion has to be exercised within the four corners of the wakf and for Dawat purposes. What are Dawat purposes, have been described by Marten J., at page 1102, in Advocate-General of Bombay v. Yusufally (1) and, in our opinion, it is only within the four corners of Dawat purposes as recognised by the Dawoodi Bohra community that the Mullaji Saheb can use the corpus or the income of this fund.