Khanna, J. - (1.) The detailed facts of this case have been given in the judgment of our learned brother Beg J. and need not be repeated. The question of law which was referred to the High Court and which has been answered in the negative against the assessee-appellant is as follows:"Whether on the facts and in the circumstances of the case, the income of the Lok Shikshana Trust was entitled to exemption under Section 11 of the Income Tax Act, 1961 read with Section 2(15) of the same Act, for the assessment year 1962-63" "Charitable purpose" was defined in Section 4 (3) of the Indian Income Tax Act, 1922 asunder: "In this sub-section 'charitable purpose' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility." The definition of "charitable purpose" as given in Sec. 2(15) of the Income Tax Act, 1961 (hereinafter referred to as the Act) with which we are concerned reads as under: "(15) 'Charitable purpose' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit."
(2.) It would appear from the above that in the definition of "charitable purpose" as given in the Act the words "not involving the carrying on of any activity for profit" have been added at the end of the definition as given in the Act of 1922. We shall see as to what is the effect of the above addition.
(3.) In order to see as to whether the appellant-trust is for a charitable purpose, we may first go into the question as to what is the object of the appellant-trust. According to Mr. Palkhiwala, learned counsel for the appellant, the object of the appellant-trust is education, while the stand of Mr. Sharma on behalf of the revenue is that not education but the last mentioned category in S. 2(15), viz., the advancement of any other object of general public utility, is the object of the appellant-trust. The reason for the above divergence in the stands of Mr. Palkhiwala and Mr. Sharma is that according to Mr. Palkhiwala, the concluding words of the definition in Section 2 (15) of the Act "not involving the carrying on of any activity for profit" do not qualify the first three categories of relief of the poor, education, or medical relief but qualify only the fourth category of '"advancement of any other object of general public utility"- Once the object of the appellant trust is held to be education, the trust would, according to Mr Palkhiwala. be held to be for a public purpose as defined in Sec. 2 (15) of the Act. In such an event, it would be immaterial whether the object of the trust involves or does not involve the carrying on of any activity for profit. As against that, Mr. Sharma has controverted the submission that the concluding words of the definition, viz., "not involving the carrying on of any activity for profit" qualify only the fourth category of " advancement of any other object of general public utility". According to Mr. Sharma, the concluding words qualify the first three categories of relief of the poor, education and medical relief also. In any case, submits Mr Sharma, the object of the appellant-trust falls in the fourth category of the definition, namely, 'any other object of general public utility." It is in our opinion, not necessary to express opinion in this case on the question as to whether the words 'not involving the carrying on of any activity for profit" qualify the fourth object, viz, the advancement of any other object of general public utility, or whether they also qualify the other three objects of relief of the poor, education and medical relief, because we are of the view that the object of the appellant-trust was not education but any other object of general public utility. Clauses 2, 6. 10, 14, 16 and 18 of the trust deed of the appellant read as under: 2. The object of the Trust shall be to educate the people of India in general and of Karnatak in particular by (a) establishing, conducting and helping directly or indirectly institutions calculated to educate the people by spread of knowledge on all matters of general interest and welfare; (b) founding and running reading rooms and libraries and keeping and conducting printing houses and publishing or aiding the publication of books, booklets, leaflets, pamphlets, magazines etc. in Kannada and other languages, all these activities being started, conducted and carried on with the object of educating the people; (c) supplying the Kannada speaking people with an organ or organs of educated public opinion and conducting journal in Kannada and other language for the dissemination of useful news and information and for the ventilation of public opinion on matters of general public utility:and (d) helping directly or indirectly societies and institutions which have all or any of the aforesaid objects in view." 6. The Original Trustee shall have power and authority to spend and utilise the money and the property of the Trust for any of the purposes of this Trust in such manner as to him may appear proper. The Original Trustee shall be entitled to operate all the Banking accounts of the Trust. 10. The Original Trustee shall have full power to take over on such terms as he may deem fit such concern or concerns, or undertakings as, in his opinion, are congenial or conducive to any of the purposes of the Trust. 14 . The Original Trustee shall be entitled to appoint a Manager or Managers of institutions of the Trust, Editor or Editors and other subordinates for the purposes of carrying out the printing and publication of any newspaper or newspapers, weeklies, monthlies, magazines, books or other publications, and shall have power from time to time to delegate to any one or more persons by Power of Attorney or otherwise any one or more of the following powers: (a) To open one or more banking accounts, to operate the same and to deposit and withdraw moneys from the same; (b) To give receipts or discharges for money or property received by them or any one of them in the course of business carried on by the Trust; (c) To buy or sell paper, ink, machines, books and materials required for the purposes of the business of the Trust: (d) To enter into contracts with agents, dealers and others in the course of the business of the Trust: (e) To employ or remove subordinates and workers necessary for the work; (f) and generally to do all things necessary and expedient in carrying out the business entrusted to him or them. 16. The Original Trustee or Trustees shall not take any remuneration for discharging his or their duties as a Trustee or Trustees provided that this provision shall not preclude a Trustee or Trustees from being paid out of the Trust fund such remuneration as may be deemed proper for carrying out any work and duty in connection with the conduct or management of institutions of the Trust, or with the business of printing publishing or other activities carried on by the Trust. A Trustee shall be entitled to be paid all expenses that may be incurred by him in connection with his duties as a Trustee including travelling and other expenses. 18. The Original Trustee or other Trustees shall not be responsible for any loss occasioned to the Trust in respect of any business or dealings carried on behalf of the Trust unless the same is due to his own fraud or misappropriation or breach of trust and every trustee shall be indemnified by and out of the funds and moneys of the Trust against any loss or damage which the Trustee might suffer in regard to any act, deed, or omission of his in the performance of his duties as a Trustee, including any fines or penalties imposed under the Factory Act or any Labour Legislation or Press Act or any other similar enactment." The income-tax officer sent a communication to the trust on April 27, 1963 to the effect that since the only activity of the trust was printing, publication and sale of newspaper, weekly and monthly journal, the trust carried on an activity for profit and was not entitled to exemption. In reply to that notice the Sole Trustee stated that the above mentioned activities of the trust were covered by clause (c) of the objects clause of the trust deed. It was added that the above object did not involve the carrying on of any activity for profit. In a further communication dated June 26, 1964 the Sole Trustee wrote: 'The Trust has four objects in its objects clause one of which is to supply the Kannada speaking people with an organ or organs of educated public opinion etc. (clause 2(c) of Trust Deed). Under this clause we conduct the publication of newspapers. This has not been agreed upon by your honour as a charitable purpose and we have accordingly preferred appeals for relief. The main abject of the Trust is education and this may be achieved by conducting and helping educational institution and by running reading rooms and libraries and helping the institutions having the similar objects as of our Trust. These are all charitable objects. In case the Trust has a surplus income it cannot be spent on any object other than the objects of the Trust. For the present we have been educating the Kannada speaking people through newspapers and journals and we shall be taking up the other ways and means of education as noted in our trust deed as and when it is possible for Trust. We have no option at all except to spend our income on the objects of our Trust which are all charitable without any doubt or ambiguity.";