Law: Income Tax Act, 1961

Section: 17,13,13(1)(b)

Indian Income Tax Act 1961 - Sections 17, 13 - Exemption - Charitable purposes - Charitable and religious truswnstitutionl- Scope of section 13(1)(b) - income Tax. Officer concluded that the assessee trust was not entitled to exemption - Tribunal held that the assessee trust was found to be charitable as well as religious in nature hence entitled to exemption - Whether justified - Held - yes lt can be stated that if a charitable trust is established onlyfor the benefit of any particular religious community or caste, then the provisions of section 11 would not be applicable. But in the case of a trust or an ihstitution for religious purposes wherein certain activities can be termed as charitable activities for the benefit of any particular religious community or caste, clause (b) would not be applicable. Mr. Shelat, learned counsel for the Flevenue, vehemently submitted that by giving this Interpretation to clause (b) of section 13(1), the said clause (b) can be made nugatory by merely using the woids in trust deeds that the trust was established for religious and charitable purposes. He therefore, submitted that the authority is required to determine the predominantpurpose of the trust and if the predominant purpose is a charitable purpose it is difficult to accept the said contention mainly because it is nowhere provided in the section that in each case the authority shall find out the predominant purpose of the trust. Further, as stated earlier, in the three different clauses, namely, (a), (b) and (c) of sub-section (1) of section 13, the Legislature has used different phrases. Clause (a) as, stated earlier, deals with a trust for private religious purposes, Clause (b) deals with a trust for charitable purposes or a charitable institution, clauses (c) and (d)' deal with a trust for charitable or religious purposes or a charitable or religious institution. From this different phraseology used by the Legislature in clauses (a) (b) and (c), it can be inferred that the Legislature intended to cover only trusts for charitable purposes under clause (b). That means, it a trust is composite, that is, for religious and charitable purposes, then it would not be…

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