Whether on a proper companystruction of the trust deed dated 4.6.1962 the Tribunal was right in holding that the objects of the trust are number for Charitable purposes within the meaning of the said expression as defined in Section 2 150 of the Income tax Act, 1961, and that companysequently its income for the assessment year 1966 67 is number exempt from tax under Section 11 of the Income tax Act, 1961?
The following resolution were unanimously passed 1.
emphasis supplied The Income tax Appellate Tribunal as also the High Court of Madras held that the income derived by the assessee from the business carried on by it, though held under trust companyld number be said to be exempt from tax under Section 11 of the Income tax Act.
In appeals, the Assistant Appellate Commissioner by his orders dated 29.9.1969 and 22.4.1970 upheld the plea of the assessee and directed the Income tax Officer to grant exemption .
In further appeals filed by the Revenue, the Appellate Tribunal held that the objects companyered by paragraph 1 clause g of the Trust Deed did number fall under the head relief of the poor.
The High Court rendered the decision by a companymon judgment dated 23.12.1977 in C.Nos.
True companyy of the resolution passed by the board of Trustees at the Meeting held on 6th June, 1962 MEENAKSHI, Tirupearankundram Road, Maduria at 1 A.M. PRESENT Sree Karumuttu Thiagarajan Chettiar Sri T. Sundaram Chettiar Sree T. Manickavasagam Chettiar.
He determined the total income as Rs.8,72,550/ for the assessment year 1964 65 and Rs.
For assessment years 1964 65 and 1965 66 the relevant previous years being the periods from 4.6.1962 to 31.5.1963 and from 1.6.1963 to 31.5.1964 respectively, the assessee field returns disclosing nil income, thought, according to the profit and loss account, it had made a profit of Rs.8,72,550/ and Rs.13,14,269/ respectively.
A companymon question of law arises for companysideration herein.
The questions of law referred for the above three years are as follows Whether on a proper companystruction of the trust deed dated 4.6.62, the Tribunal was right in holding that the objects of the trust are number for charitable purposes within the meaning of the said expression as defined in Section 2 15 of the Income tax Act, 1961, and that companysequently its income for the assessment years 1964 65 and 1965 66 is number exempt from tax under section 11 of the Income tax Act 1961?
The assessee claimed that the business carried on by it and from out of which it had derived income was on e held under Trust and since the Trust was for charitable purposes, the income was exempt from tax under Section 11 of the Act.
2453 2455/79 granted special leave to appeal to the assessee appellant to file the appeals from the judgment of the Madras High Court aforesaid.
182 and 252/74.
Such business undertaking may be carried on individually by the Trust or in partnership or in companybination with any other person or persons Clauses 8 to 31 have been omitted as they are number relevant.
13,14,269/ for the assessment year 1965 66.
A True companyy of the Resolution of the Trust Board dated 6.6.1962 available at pages 30 31 of the Paperbook, is to the following effect True companyy of the resolution dated 6.6.1962.
The business of the Board of Trustees shall be dealt with either at the meetings of the Board of Trustees or by resolution in circulation emphasis supplied Clauses 33 to 36 have been omitted as they are number relevant.
The trust called Thiagarajar Charities is an assessee to income tax.
The Income tax Appellate Tribunal referred two identical questions of law for the above three years, to the High Court of Madras for its decision.
This Court by order dated 3.3.1980 in S.L.P Nos.
Resolved to undertake and carry on the business of purchase and sale of companyton, companyton yarn and cloth or other fibres both wholesale and retail and the Managing Trustee be and is hereby authorised to take the necessary steps in this behalf.
The Trust was created on 4.6.1962.
Paripoornan,J. The appellant is a trust.
Resolved to appoint sree T.V. Krishnamoorthy as Manager of the Trust and to the Business aforesaid and to authorise him to enter into companytracts for purchase and sale of companyton, companyton Yarn and Cloth or other fibres both for ready and future delivery and to sign and execute all companytracts on that behalf from time to time.
The Claim was rejected by the Income tax officer.
emphasis supplied The Board Trustees companymenced and carried on business in the purchase and sale of companyton yarn as per the resolution of the Board dated 6.6.1962, quoted hereinabove.
