2003 (12) TMI 20

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....f the trust shall be: (i) To aid and assist in the development, and maintenance of Sri Aurobindo International Centre of Education and Sri Aurobindo Ashram or any other public trust for charitable purpose and to establish and/or take over and/or purchase and/or otherwise acquire and run and manage services and industries required for the purpose of Sri Aurobindo International Centre of Education and/or Sri Aurobindo Ashram and/or departments connected therewith or any other public trust for charitable purpose. (ii) To organise, encourage, promote, spread and impart all kind of educations and/or aid and/or assist in imparting and/or contribute to Sri Aurobindo Ashram and/or Sri Aurobindo International Centre of Education for commercial, in....

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.... the trust. Clause 4C of the trust deed further obligates the trustees to carry on only such trade, commerce and industry as can be carried on either in the course of actually carrying out of any or part of any of the purposes of Sri Aurobindo Ashram and/or Sri Aurobindo International Centre of Education and/or this trust. Clause 6 of the deed in its sub-clauses (i) to (xiv) specifies the powers of the trustees in addition to those conferred on the trustees by the general law or other terms of the document. The trust deed is a lengthy document and contains 44 clauses. The assessee-trust has been treated as a public charitable trust within the meaning of section 11 of the Income-tax Act. Section 5(1)(i) of the Wealth-tax Act provides that ....

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....s charitable as the benefit received by the executor is only incidental. A Constitution Bench of the Supreme Court in the case of Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [1980] 121 ITR 1 has held that the object of the Surat Art Silk Cloth Manufacturers Association which was to promote commerce and trade in art silk yarn, raw silk, cotton yarn, etc., was an object of general public utility. It was also held in that case that though the primary purpose of the trust is advancement of objects of general public utility, the institution would remain charitable even if a non-charitable object was mentioned in the deed, provided it was only incidental for achieving the primary purpose of the trust. More recently, a two-judge ....

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....y and the trust had no other purpose, it was not possible to regard the trust as a charitable trust. It was found that there were no educational objects in the trust that was created, and there was no other object of general public utility and further that the trust that was created did not fall within any other accepted heads of charity. The facts of this case are entirely different. The mere fact that the author of this trust like the author of the other trust considered in that case, are disciples of Sri Aurobindo, does not on that score, render all trusts created by such disciples not charitable. The objects of this trust which have been extracted clearly show that the objects were not confined to pass on the income of the business run....