Charitable purpose under tax law turns on whether general public utility activities are carried on for profit.

Section 2(15) of the Income-tax Act, 1961 treats an object of general public utility as charitable only if the associated activities are not carried on for profit. The record showed that the assessee's objects fell within that category, but there was no clear finding identifying the activities said to be profit-making. Earlier Supreme Court authority did not require a written no-profit clause in every case; the controlling test is whether, from the constitution, practice, or surrounding circumstances, there is a written or unwritten prohibition against profit-making. The reference could not be finally answered on the existing findings and was returned for a fresh finding on profit motive.

---

---

Issues: Whether the reference could be answered on the existing record on the question whether the assessee's income was exempt as arising from charitable purpose, and whether a finding was on whether the assessee's activities were carried on for profit.

Analysis: The relevant exemption turned on section 2(15) of the Income-tax Act, 1961, under which an object of general public utility qualifies as charitable only if the associated activities are not carried on for profit. The record showed that the assessee's objects fell within the category of general public utility, but the Tribunal had not recorded a clear finding identifying the activities alleged to be carried on for profit. The earlier Supreme Court authorities did not make a written no-profit clause an indispensable condition in every case; the controlling test remained whether, on facts, there was a written or unwritten proscription against profit-making, to be gathered from the constitution, practice, or surrounding circumstances.

Conclusion: The reference could not be finally answered on the existing findings, and it was returned unanswered for the Tribunal to record a fresh finding on whether the assessee was carrying on activities for profit.

---