Law:

Section:

Section 2(15), read with section 11, of the Income-tax Act, 1961 - Charitable purpose - Objects of assessee-trust were to establish and maintain institutions for educational advancement and physical material and spiritual well-being of people - Whether words 'physical' and 'material' appearing in trust deed would take assessee-trust out of definition of charitable purpose given in section 2(15) and make it ineligible for exemption under section 11 - Held, on facts, no Facts The objects of the assessee-trust were (a) to maintain and develop certain colleges and hostels, (b) to complete the work of establishing a particular technological institution and a college, (c) to establish and maintain other institutions intended for educational, cultural, economic, social and religious welfare and advancement and for the physical, economic well-being of the people, and (d) to accept any other trust created for any of the above objects, especially any trust created in the name of Sree Narayana Guru for the purpose of propagating his teachings or for the purpose of educational advancement of backward people or for the material and spiritual well-being of the people. For the assessment year 1971-72, the assessee claimed exemption under section 11, but the ITO disallowed the claim on the ground that clauses (c) and (d) of the object clause of the trust did not disclose a charitable purpose. On appeal, the AAC allowed the assessee's claim. On further appeal, the Tribunal upheld the order of the AAC. On reference, the revenue contended that the words 'physical' and 'material' appearing in clauses (c) and (d) respectively, of the object clause took the objects of the trust out of the realm of 'charitable purpose' as defined in section 2(15). Held The word 'physical' in clause (c ) of the object clause trust deed referred to an aspect of educational activity. Clause (d) authorising the trust to accept any other trust referred to an object which was purely charitable in scope. Promotion of material and spiritual well-being of backward people was indeed a charitable purpose. Therefore, both clauses (c) and (d) of the object clause referred to the educational activity and matters…

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