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S.N.V. Sadanam Trust vs Corporation Of Cochin on 17 March, 2006 cites

Aliya Arabic College vs Kasaragod Municipality on 8 June, 1988

Even though petitioner claims that the building in question is a choultry because rent collected at the rate of Rs. 500 per head per month is moderate and rent collected is used for charitable purposes, standing counsel for the respondent referred to the decision of this Court in Aliya Arabic College v. Kasaragod Municipality 1998 (2) KLT 11 and contended that Choultry in Malayalam means "Sathram", which covers building given free of rent or at very moderate rate of rent. According to her, through inspection, the information obtained by the Corporation is that the monthly rent charged per head is Rs. 2000/- which by no standard can be called low or moderate. Even assuming that petitioner's claim that rent collected is only Rs. 500/- per head per month is accepted, still it cannot be said to be very low or moderate to call the building a choultry is the case of the respondent. I do not think there is any need to consider what exactly is the rent collected by the petitioner, because 1 am of the view that building by itself cannot be called a choultry which in Malayalam means Sathram. Apart from the meaning assigned to this word in the decision above referred, the provision in the Act enacted in Malayalam uses the word Sathram and the corresponding word used in the translated version for Sathram is Choultry. A choultry or Sathram is not a place of regular residence and is only a place provided for temporary accommodation for guests travelling public, pilgrims etc. What the petitioner provides is permanent accommodation to fairly affluent old aged ladies for regular accommodation and they can live there as long as they want or until they die. The class of people who come obviously are old aged ladies who do not have children or dependants or who do not want to live with them but want to live independently and in the company of similar people. A building providing accommodation to aged people on long term basis cannot be called a Choultry at all. Therefore irrespective of whether petitioner is charging Rs. 2000/- per head as found by the Corporation or Rs. 500 per head per month as claimed by the petitioner, the building is not entitled to exemption under Section 235(1)(c) of the Act as the building cannot be called a Choultry at all. Apart from this, petitioner also does not satisfy the conditions in the second limb of Section 235(1) of the Act which provides for exemption only if rent charged is applied for charitable purposes. Since charitable purpose is not defined in the Act, the question to be considered is what is the meaning that should be assigned to "charitable purpose". Counsel for the petitioner relying on Ext. P19 constitution of the trust containing its objects and Ext.P18 certificate of exemption issued by the Income-tax Department contended that petitioner is engaged in charitable purpose and its income is not shared by any of the trustees and is applied for the purposes for which the trust is formed. Of course the objects of the petitioner trust include education, social welfare, well-being of women and children, etc. Counsel for the respondent on the other hand contended that charitable purpose has limited meaning under the Act and merely because the petitioner's objects fall within the definition of charitable purpose as defined under Section 2(15) of the Income-tax Act, petitioner is not entitled for property tax exemption under Section 235 of the Act. She has also relied on the definition of "charitable purpose" contained in the previous Act that is Kerala Municipalities Act, 1960, which in Section 101 defined charitable purpose as including relief of the poor, education and medical relief. Reference is also made to the definition of charitable purpose as contained in Section 3(1)(b) of the Building Tax Act 1975 which includes only relief of poor and free medical relief within its object after providing for separate exemption under same Section for education, and religious purposes and for factories and workshops. On going through the objects of the petitioner as contained in the trust deed, I feel certificate of exemption issued by the Income tax Department under Section 11 of the Income Tax Act, 1961 on the ground that the petitioner is engaged in "advancement of object to general public utility" which is also an item falling within the definition of charitable purpose for the purpose of the Income-tax Act. Even though charitable purpose is not defined under the Act, it is clear from the provisions contained in the previous statute substituted by the present Act and in the similar legislation, namely, Kerala Building Tax Act, I do not think an extended meaning covering all activities of public utility is covered by the term "charitable purpose" used in the Act. Apart from this, the explanation to Section 235 (1) provides that exemption shall not be granted to buildings let out on rent by owners and it is provided in the said Explanation that even residential quarters attached to schools and colleges shall not be entitled to exemption even if rent is not collected from such building. It is therefore obvious that exemption from property tax in respect of building is subject to restrictions and limitations and the criteria is whether there is collection of rent or not. A very important aspect is that exemption is with respect to the nature of use to which the building is put. In other words, building owned by charitable institutions are not entitled to exemption even if the entire income from building»is used for charitable purpose as understood under the Income-tax Act. Only such of the buildings which are used for the purposes referred to in various sub-sections of Section 235 Only are entitled to exemption. Probably the definition for charitable purpose is dispensed with under the Act because charitable purposes for which exemption from property tax is provided are contained in Section 235(1)(i) of the Act, which are sheltering of distributes, and sheltering of animals. In other words, only two charitable purposes, use of which entitles a building for exemption from property tax are sheltering of distributes and animals. By no stretch of imagination the guests living in the petitioner's building paying normal rent and charges for food in addition to the same who are obviously affluent people can be called distributes. It is to be noted that charitable purpose use of which qualifies a building for exemption is use as Choultry.
Kerala High Court Cites 3 - Cited by 2 - K S Paripoornan - Full Document
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