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Section 11 of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - Assessment years 1971-72 and 1972-73 - Assessee-company amended objects clause of its memorandum of association to utilise income for charity purposes only - Whether in view of such a categorical provision income of assessee-company was exempt under section 11 - Held, yes FACTS The assessee was incorporated as a company on 17-9-1951. Subsequently, after the amendments of the objects clause of its memorandum of association, entire income of the assessee-company was to be utilized for the purpose of charity only. On the basis of these amendments in its objects, the assessee-company claimed in respect of its income exemption under section 11. The claim was rejected by the ITO. The AAC, on appeal, accepted it and his order was confirmed by the Tribunal. On reference: HELD Clause (e ) of article 3 of the memorandum of association of the assessee-company was the clause which created a trust in respect of all the assets of the assessee-company and its income and provided for the utilization of the income for charitable objects set out in detail in that clause. While clauses (n) to (u) prohibited utilisation of the assessee's income for any other purpose, other clauses in article 3 merely empowered the assessee-company to carry on its activities most efficiently. There was no dispute that objects mentioned in clause (e) were of charitable nature. Hence, the income of the assessee-company was exempt under section 11. CASE REFERRED TO Addl. CIT v. Surat Art Silk Cloth Mfrs. Association [1981] 121 ITR 1 (SC). Dr. V. Balsubramanian, J.P. Devadhar and K.C. Sidhwa for the Applicant. Dilip Dwarka Das and Vishwanath Batra for the Respondent. JUDGMENT Sugla, J. - The only question of law raised in this reference at the instance of the department is: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the income of the assessee -company is exempt under section 11 of the Income-tax Act, 1961?" 2. The assessee is a company. The proceedings relate to its assessment years 1971-72 and 1972-73. The company was…

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