One of the clauses in this deed of 1st July.
At the instance of the Revenue, in respect of the assessment years 1957 58 to 1961 62 the Tribunal referred the following five questions of law to the High Court Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee was a trust companystituted by the deed, dated November 28, 1941, and number by the deed dated July 1, 1944?
In respect of the assessment for subsequent years, viz.,
Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that giving cash grants for the needy and deserving persons to meet marriage expenses is a charitable object and the assessee was entitled to exemption under section 4 3 l of the Indian Income Tax Act, 1922?
It further held that since an irrevocable trust had been created by virtue of partnership deed dated 28th November, 1941 neither the founders number the trustees had any right, in law, to vary the objects of that Trust by executing another document dated 1st July, 1944.
Whether, on the facts and in the circumstances of the case, the Appellant Tribunal was right in holding that the question whether the assessee was a trust, whose objects are wholly charitable and religious has to be determined solely with reference to the trust deed dated November 28, 1941, and number with reference to the trust deed dated July 1, 1944?
By a detailed order the Income Tax Tribunal came to the companyclusion that the question as to whether the Deed dated 1st July, 1944 was validly executed was number in issue in East India Industries case.
Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the trust created by the partnership deed dated November 28, 1941, companytinued even after the dissolution of the partnership and the assesses trust was the trust companystituted by the deed dated November 28, 1941?
Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assesse trust was entitled to the exemption under section 4 3 1 of the Indian Income tax Act, 1922 in respect of the income attributable to the trust created under the deed dated November 28, 1941?
Ltd. a donor to the appellant Trust in respect of the donation given to the Trust claimed exemption from tax under section 158 of the Income Tax Act, 1922.
In these appeals relating to the assessment years 1957 58 to 1974 75, the main question which is involved for companysideration is whether the appellant Trust being a public charitable trust, is eligible for exemption from income tax.
The partnership deed appointed one T.N. Venkatarama Chettiar, son of one of the partners as the sole trustee.
On 28th November, 1941, a partnership deed was executed between K. Rajgopal and V.S. Nanjappa Chettiar.
1944 was regarded by the Income Tax Department as number being charitable in nature.
It appears that one M s. East India Industries Madras Pvt.
1962 63 to 1973 74, the Tribunal referred only one question which was as follows Whether, on the facts and in the circumstances of the case, the income of the assessee was entitled to exemption under section 11 of the Income tax Act, 1961, read with section 13 and was number, therefore, assessable to tax for the assessment years 1962 63 to 1973 74?
It referred to the carrying on of the partnership business by the earlier founders of the trust and for establishment of the trust for charitable and religious objects and then proceeded to make a declaration of trust specifying a number of objects, most of which were different from the ones companytained in the partnership deed of 28th November, 1941.
By a subsequent document executed on 26th August, 1943 this clause companytaining the power of revocation was deleted.
While companysidering the case relating to this donation, the Income Tax Officer in East India Industries case came to the companyclusion that by virtue of this clause relating to number charitable object, the Trust created by the Deed dated 1st July, 1944 companyld number be regarded as a Trust having charitable object and , therefore, number entitled to exemption under the Income Tax Act.
The power which was given to the said sole trustee was companytained in para 8 of the Deed which reads as follows The said T.N. Venkatarama Chettiar shall from time to time after acceptance of the trust, operate on the fund in execution of the trust and spend out of the said fund in companynection with temple festivals in Madras and other places like Conjeevaram, Tirupathi, Srirangam, Salem and other places, medical relief, the giving of alms including food to the poor on occasions of Hindu festivals as selected by him in his discretion of the gift of sums of money to poor deserving persons for celebration of marriage and generally on any object of Chcultries, work houses hospitals etc.
On 1st July, 1944, the sole trustee executed a document purporting to be a declaration of trust.
The Tribunal, therefore, companycluded that the decision of this Court in East India Industries case companyld number prevent it from examining the terms of the objects of the Trust companytained in partnership deed dated 28th November, 1941 inasmuch as that a deed dated 1st July, 1944 being regarded as void, companytinued to exist.
This matter was carried to this Court and in the judgment reported as East India Industries Ltd. Vs.
In the assessment for the years 1957 58 to 1974 75 of the appellant, the question arose whether it companyld be regarded as a public charitable trust entitled to the benefits under the Income Tax Act The Income Tax Officer as well as the Appellate Commissioner came to the companyclusion that the appellant was number a public charitable trust.
Commissioner of Income Tax 65 ITR 611 the view of the Department was affirmed and it was held that the document dated 1st July, 1944 did number establish a public charitable trust because one of the objects was number charitable in nature and there was numberhing in the Trust Deed which prevented the trustees from applying the whole or any part of the Trust property for that purpose.
After examining the objects of the Trust as companytained in the Deed dated 28th November, 1941 the Tribunal came to the companyclusion that the objects of the Trust were charitable in nature and, therefore, the appellant was entitled to be regarded as public charitable Trust which would enable it to get the benefits under the Act.
By this document, the said parties agreed to carry on business in partnership but clauses 4 to 8 of the Deed companytained an agreement amongst the partners that out of the net profits of the business, after payment of all charges and expenses, 80 per cent shall be set apart and allotted to charitable and religious objects.
The amounts which were to be credited to the Charity Account in the books of business were to be utilised by the trustee for carrying out the objects of the Trust.
Before the Income Tax Appellate Tribunal, it was companytended on behalf of the appellant Trust that the Trust had companye into existence by virtue of Deed dated 28th November, 1941 and the Declaration of Trust under a deed dated 1st July, 1944 was invalid.
