Charitable Purpose: income from a swimming bath and incidental refreshment services held exempt as trust property for public utility.

The note addresses whether a trust operating a salt-water swimming bath and supplying refreshments qualifies as a charitable institution for income-tax exemption. It applies the inclusive statutory definition of charitable purposes and the principle that an eleemosynary element is unnecessary where the purpose is of general public utility, finding promotion of public health by providing a swimming bath for a section of the public to be charitable. The supply of refreshments was characterised as incidental to the primary charitable object. The income from ticket sales and the bar/restaurant was held to arise from property or business held wholly for charitable purposes and thus exempt.

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Issues: (i) Whether the income derived by the Breach Candy Swimming Bath Trust from sale of tickets and from running a bar and restaurant is exempt from income-tax as income of a charitable institution.

Analysis: The Court examined whether the trust's primary object is charitable - specifically the construction and maintenance of a salt-water swimming bath for a defined section of the public - and distinguished the trustees' power to supply refreshments as incidental to that primary object rather than itself being the object. Applying the inclusive definition of "charitable purposes" under the Income-tax law, and relying on precedent that an eleemosynary element is not essential where the purpose is of general public utility, the Court held that promoting public health by providing a swimming bath for a section of the public constitutes an object of general public utility. The Court considered the relationship between sections 4(3)(i) and 4(3)(ia) of the Income-tax Act, explaining that section 4(3)(i) covers income from property (including business) held under trust wholly for charitable purposes, whereas section 4(3)(ia) applies to a business carried on on behalf of a charitable institution and requires application of income solely to institutional purposes. The Court reframed the Tribunal's question to address exemption generally and concluded that the income in dispute arises from activities integral to a trust held wholly for charitable purposes and therefore falls under section 4(3)(i) rather than section 4(3)(ia).

Conclusion: The income from sale of season and daily tickets and from the bar and restaurant is exempt from income-tax as income derived from property or business held under trust wholly for charitable purposes; decision in favour of the assessee.

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