TaxTMI 
TaxTMI 
1978 (7) TMI 1
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....67. The relevant provisions of its memorandum of association are : " 3. (a) The main objects to be pursued by the company on its incorporation are : (i) To give charity (ii) To promote education. (iii) To establish or aid in the establishment of associations, institutions, funds, trusts with the object of promoting charity and/or education provided that the company shall not support its funds or endeavour to impose on, or procure to be observed by, its members or others any regulation or restriction which, if an object of the company, would make it a trade union. (b) The objects incidental or ancillary to the attainment of the above main objects are : (i) To receive donations, subscriptions, or gifts for the furtherance of the purpose....
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....ts opinion : " Whether, on the facts and in the circumstances of the case, the assessee is entitled to exemption under section 11 of the Income-tax Act, 1961, for the assessment year 1969-70 ? " The High Court answered the question in the negative and in favour of the income-tax department by its judgment dated June 12, 1974. According to sub-clause (a) of clause 3 of the memorandum of association, the main objects for which the appellant was formed are " to give charity " and " to promote education ". The third sub-clause merely confers power to establish associations and other bodies with the object of promoting the two main objects. Having regard to the language used and the context in which the two main objects are set forth, it woul....
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....haritable purpose " in section 4(3) of the Indian Income-tax Act, 1922. The same words were used in English law to describe one of the heads of charitable purpose. in Morice v. Bishop of Durham [1805] 10 Ves 522, 532. Under the English law, they were regarded as words of sufficiently extensive import to warrant the observation by the House of Lords in William's Trust v. Inland Revenue Commissioners [1947] 27 TC 409 ; [1948] 16 ITR (Supp.) 41 (HL), that all objects of general public utility were not necessarily charitable, and that while some may be so others may not. The law in India under the Indian income-tax Act, 1922, was not in congruency with the English law of charity inasmuch as by including those words in its statutory definiti....
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....d sub-clause (b) of clause 3 of the memorandum. From the description prefacing the enumeration of the objects, it is plain that the objects are really in the nature of powers incidental or ancillary to the attainment of the main objects mentioned in sub-clause (a) of clause 3. Accordingly, we hold that the income from the kurie business is intended to be applied only to the charitable purposes of giving to charity or the promotion of education. That is the basis on which the licence was granted under section 25 of the Companies Act to the appellant. No question arises of applying the income from the kurie business to the other objects for which the appellant has been established, that is to say, the objects set forth in sub-clause (c) of cl....