R.L.GULATI, J. - (1.) THE Tribunal, Allahabad Bench, Allahabad, had at the instance of the CIT, Kanpur referred the following question for our opinion :- "Whether on the facts and circumstances of the case, the trust created by the instrument dt. 21st Sept., 1955 when r/w the deed dt. 6th Sept., 1956 is an irrevocable trust and income of the trust for the assessment years 1956-57 to 1962-63 is exempt from tax under s.4(3)(i) 11 of the IT Act, 1922/1961 ?
(2.) MOTI Chandra and Shrimati Shanti Devi executed a registered trust deed on 26th Sept., 1950. The two settlors contributed an amount of Rs. 20,000/- to be used only for charitable purposes to commemorate the memory of late Lala Ram Chandra. The preamble to this deed started that this amount would be used for running a charitable store styled "Lala Ram Chandar Charitable Store" and for other business and the income from the aforesaid business would be utilised for charitable purposes. The object of the trust, inter alia included the utilisation of the income from the business carried out with the aforesaid amount of Rs. 20,000/-(1) for the purposes of granting scholarships to students, (2) opening schools and colleges and classes in existing schools and colleges, (3) granting aids to any schools and colleges, (4) granting maintenance to needy widows and poors; (5) helping and assisting or establishing any orphanage; (6) helping other charitable and religious institutions, and (7) spending the amount on such other charitable and religious purposes as the trustees may deem fit. Clauses 4 and 5 of the deed inter alia permitted the trustees to carry on additional or further business, on condition that the income from such business would be utilised for the purposes of trust. These clauses also gave the trustees full discretion in employing the income of the trust for such object or objects under this clause were also entitled to wind up the Charitable Stores in case the business was unremunerative, and invest the sum some other business, according to their discretion. Clause 11 provided for the revocation of the trust by the executants. A question had arisen earlier as whether the trust deed was irrevocable trust was revocable and the income from the trust property was to be assessed in the hands of the two settlors, Shrimati Shanti Devi and Moti Chandra. On 21st Sept., 1955 another registered deed was executed by these two persons. The object of the second trust deed was palpably to make the trust irrevocable, and to make an unequivocal declaration about the charitable purpose of the earlier trust The dispute in the present case relates to the asst. yrs. 1956-57 to 1962-63. The contention of the assessee in these assessment years that the trust was irrevocable and as such its income was exempt, was repelled both by the ITO and the AAC. The Tribunal has upheld this contention and as has been noticed earlier, referred the aforesaid question. The question as to whether the trust created by the instrument of 21st Sept., 1955 is irrevocable or not, depends upon a consideration of the relevant clauses of the trust deed of 26th Sept., 1950 and the trust deed of 21st Sept., 1955. It is necessary to take into account the deed of 26th Sept., 1960 also, as the deed of 1955 is more or less a supplementary instrument which sought to rectify the lacuna in the earlier trust deed. The last portion of the deed which has been noticed by the Tribunal runs as follows :- "And whereas it is deemed expedient to declare that notwithstanding the fact that the declaration of trust was made to commemorate the memory of late Lala Ram Chandra, the income derived from business carried on behalf of the aforesaid trust will be wholly and exclusively spent for public charitable purposes mentioned in the Deed of Declaration of Trust and no part of income of the said Trust shall be employed for the private benefit or use of the executants and their families." In clause I, there is a declaration of the executants that the trust deed of 26th Sept., 1950 is irrevocable. Clause 2 lays down that the income from the business carried on behalf of the said trust would be wholly applied to the charitable purposes mentioned in the deed dt. 26th Sept., 1950 and that no part of the said income would be utilised for private purposes or benefit of the executants or their family members. Clause 3 gives aright to trustees to invest the trust fund and the accretions thereto in such business as they might deem fit. Clause 8 runs thus :- "That the specific powers of the Trustees mentioned before are mere amplification in the Deed of Declaration of trust dt. 26th Sept., 1950 and shall not in any manner be construed to derogate from the Trustees the general powers vested in them as mentioned in the Deed of declaration of Trust dt. 26th Sept., 1950." The fact whether a trust deed is revocable or not has to be gathered from the instrument. In the earlier trust deed, cl. (11) gave a specific power of revocation of the trust. That power as has been seen was withdrawn by the deed of 1955. This being so, the Tribunal was right in holding that the trust deed was not revocable. In view of the clear declaration of the intention of the executants that the trust deed was not revocable, it is idle to consider the other clauses of the two trust deeds which do not deal with this aspect of the matter. It must, therefore, be held that the Tribunal was right in holding that the trust affected by the instrument dt. 21st Sept., 1955 was not revocable.
(3.) COUNSEL for the Revenue, then contended that in any event, the income from the trust was not liable to exemption under s.4(3) as the requirements of have been raised before the Tribunal, and as such it is not open for the Revenue to take up this contention at this stage. This apart, s.4(3) (i) (b) of the Act cannot apply to the present case for before this clause comes into play, the income from business carried should be on behalf of the 'Religious or charitable institution'. The word 'Institution' has not been defined in the Act. It is a word of wide import. This Court had occasion to consider the ambit of this word in the case of CIT vs. Radaswami Satsang Sabha (1954-25 ITR 472 P. 522). It was held that the import of this phrase was wider than a mere trust. In view of this decision, inasmuch as the only activity which the trustees were carrying on was business, it derived from the business carried on by a religious or charitable institution although, it is not feasible, nor necessary to give an exhaustive resume of what is comprised in the phrase "religious or charitable institution", the legislature seems to have in mind 'institution' like schools and hospitals etc. run by religious or charitable trusts.;