COMMISSIONER OF INCOME TAX Vs. BARKATE SAIFIYAH SOCIETY

JUDGEMENT

(1.) FOR the asst. yrs. 1971 72 to 1974 75 the ITO arrived at the conclusion that the assessee Shri Barkate Saifiyah Society, Rajkot, was not entitled to get benefit under s. 11 of the Income tax Act, 1961 (hereinafter referred to as the "Act") as it was hit by the provisions of S. 13(1)(b) of the Act. For this purpose, he has referred to the objects of the trust which are as under :

(2.) HE observed that the provisions of S. 13(1)(b) of the Act are not applicable in the cases of charitable and religious trusts. However, he held that the trustees have not carried out any religious activities and it was not provided in the trust deed that a specified portion of the income or corpus would be spent on any of the objects. The trustees are carrying on activities of charitable nature only and that simply by labelling the Trust to be charitable and religious, it does not become so.

(3.) AGAINST that order, the Revenue preferred appeal before the Tribunal. The Tribunal arrived at the conclusion that S. 11 exempts income from the property held by the charitable or religious trust while S. 13(1)(b) takes away such exemption in case of trust for charitable purpose only, in case it is for the benefit of any particular religious community or caste; the assessee is no doubt a trust created for a religious community or caste and if it was for charitable purpose only, it would come within the mischief of S. 13(1)(b); however if a trust is for charitable purposes and also for religious purposes and even if the element of religious purpose is comparatively smaller or even insignificant, it cannot be said that the trust is a trust for charitable purposes. The Tribunal, therefore, dismissed the appeal filed by the Revenue by its order dt. 4th Aug., 1979.