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"163 What has to be examined, therefore, is whether the business itself is held under trust or is carried on by and on behalf of the trust Importantly section 11(1) of the Act starts with the expression "subject to the provisions of sections 60 to 63" Those provisions are in Chapter V of the Act. Section 60 provides for the consequences of a transfer of income where there is no transfer of assets. It says that where a person transfers merely the income from an asset without transferring the asset itself, he would continue to be chargeable to income-tax. Section 61 provides for the consequences of a revocable transfer of assets and says that the same would be the position where a person is in receipt of income by virtue of a revocable transfer of assets. Section 62 provides for the consequences of a transfer of assets for a specified period, and serves as an exception to section 61. An assessee has to be divested of the asset before ceasing to be assessable in respect of the income from it. A mere direction that the income from the business shall be applied to the charitable objects of a trust, without there being a settlement of the business itself upon trust, does not result in any trust or legal obligation.

165 The above observations have to be understood in the light of the facts before the court. Thanthi Trust carried on newspaper business which was held under trust. The charitable object of the trust was the imparting of education-which falls under section 2(15) of the Act The newspaper business was incidental to the attainment of the object of the trust, namely, that of imparting education. This aspect is important, because the aim of the trust was a per se charitable object, not a GPU object. The observations were therefore made, having regard to the fact that the profits of the news-paper business were utilized by the trust for achieving the object of education. In the light of such facts, the carrying on of newspaper business, could be incidental to the object of education- a per se category. The Thanthi Trust (supra) ratio therefore, cannot be extended to cases where the trust carries on business which is not held under trust and whose income is utilized to feed the charitable objects of the trust.

166 What then is the interpretation of the expression "incidental" profits, from "business" being "incidental to the attainment of the objectives" of the GPU charity (which occurs in section 11(4A)) ? As stated earlier, the interpretation of that expression in Thanthi Trust (supra) was in the con-text of a per se charity, i. e, where the trust's object was education. How-ever, the restrictive or negative terms enjoining GPU charities from carrying on profitable activity had been deleted in 1983 (with effect from April 1 1984). In Surat Art Silk (supra), the court had articulated the determinative test for defining whether a trust was a GPU charity if its predominant object was to carry out a charitable purpose and that if that was the case, the fact that it NEUTRAL CITATION C/TAXAP/309/2016 ORDER DATED: 30/07/2025 undefined earned profit would not per se deprive it of tax exemption This decision was interpreted in the context of section 11(4A) by this court in Thanthi Trust, to hold that business can be incidental to attainment of the trust's objects.