TaxTMI 
TaxTMI 
2008 (2) TMI 297
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....ate Tribunal confirming disallowance of income-tax exemption claimed by the appellant as a charitable trust under section 11 of the Act. Even though the appellant started the publication in 1987 in the course of several years the appellant was engaged only in one activity, viz., the publication of newspaper and the entire profits are said to be utilised for developmental purposes in the form of setting up of new units for publication of the newspapers from various centres. In order to consider the appellant's case for the Income-tax exemption under section 11 of the Act, we have to necessarily refer to the objects of the trust. Clause 3 of the trust deed containing the objects of the appellant-trust, is extracted hereinbelow: "3. Aims of....
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.... 2. The assessment involved in this case is for the assessment year 1992-93. It is stated that the Tribunal decided the claim against the appellant for all the assessment years up to 2002-03 except for the year 1990-91 and the Department has filed appeal to this court against the Tribunal's order for the year 1990-91. 3. Learned counsel appearing for the assessee heavily relied on the decision of the Privy Council in the case of Trustees of the "Tribune" reported in [1939] 7 ITR 415 and contended that publication of the newspaper itself is a charitable purpose as provided under section 2(15) of the Income-tax Act and, therefore, the appellant is entitled to exemption from payment of tax under section 11 of the Act, no matter whether the....
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....on 11(1)(a) of the Act provides for exemption to the extent of income applied for charitable purpose. The section provides for accumulation and setting apart up to 25 per cent. of the income of the previous year for future application. Admittedly, the appellant has not spent any amount towards advancement of any of the charitable objects such as education, medical relief, relief of the poor, etc., as stated in the objects clause. The facts conceded and proved through the orders produced before us, show that for several years including the previous year relevant to the assessment year, the appellant was utilising the surplus income for developmental purposes such as starting of new editions from new centres. The specific case put forward by ....
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....count are maintained by the trust or institution in respect of such business." The provision after the amendment with effect from April 1, 1992: "(4A) Sub-section (1) or sub-section (2) Or sub-section (3) or sub-section (3A) shall not apply in relation to any income of a trust or an institution, being profits and gains of business, unless the business is incidental to the attainment of the objectives of the trust or, as the case may be, institution, and separate books of account are maintained by such trust or institution in respect of such business." 7. Since the previous year relevant for this assessment year ended on March 31, 1992, the pre-amended provision applies to the appellant. The appellant is not covered by clause (a) of....
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....pellant is only engaged in publication of the newspaper which is run on commercial lines including charging of commercial tariff for advertisements and charging of price for the newspaper at rates comparable to other newspapers run for profit. However, the appellant's case is that the business of printing and publication of newspaper itself is an object of general public utility and so much so the income therefrom is exempt from tax. We are unable to accept this proposition because we are of the view that in order to qualify for exemption in respect of income from profits and gains of business, the business, after the amendment of sub-section (4A) of section 11, should be carried on as an incidental activity to the attainment of the objects....