Dipak Kumar Sen, J. - (1.) The facts found and/or admitted in this reference are, inter alia, that Mullick Somnath Charitable Trust, Calcutta, the assessee, is a trust created by a trust deed which was executed by the settlor on January 14, 1959. The relevant previsions of the deed are, inter alia, as follows : "The trustees shall hold and stand possessed of the trust property up to the trust following : (i) The trustees shall with the said sum of Rs. 50,000 or part thereof as may be required or thought fit construct a suitable building on the piece or parcel of land mentioned in Schedules 'A' and 'B'. (ii) The trustees shall after payment of all taxes, impositions, costs of repair, management of the trust property, etc., use half of its net income at their absolute discretion for the benefit of the public in the advancement of religion, knowledge, health, safety, relief of the poor or any other object beneficial to mankind or of general utility and for any one or more of the said objects and to such extent and in such manner as the trustees may in their absolute discretion deem proper AND in particular to spend such of the said sum as they might think fit every year on such humanitarian and educational institutions as Jadavpore T. B. Hospital, Arya Vidyamandir, Bhowanipore, Calcutta, Gurukul Kangri, Kankhal (Hardwar), Calcutta Blind School, Deaf and Dumb School, Calcutta, Baba Kali Kamliwala Panchayat, Kshetra Rishikesh and for support and maintenance of the poor and indigent relations of the settlor. (iii) The remaining half of the net income of the trust property shall be accumulated by the trustees for such period as they might think fit and after sufficient accumulation, the same should be invested in making additions, alterations, improvements and acquisitions and the whole of the net income should be applied by the trustees for the purpose mentioned in paragraph 3(ii) thereof. "
(2.) The assessee was assessed to income-tax for the assessment years 1967-68 to 1971-72 and also 1973-74. It was contended before the Income-tax Officer on behalf of the assessee that 50% of the net income of the trust was exempt from income-tax under Section 11 of the Income-tax Act, 1961, as the assessee was a public charitable trust and its objects were charitable. The Income-tax Officer did not accept the contention of the assessee and following the decision of the Appellate Assistant Commissioner in the case of the assessee for the assessment year 1972-73 and also the order of the Commissioner of Income-tax passed in the said assessment year 1972-73, under Section 264, held that the assesses was not entitled to claim exemption under Section 11 of the Income-tax Act.
(3.) Being aggrieved, the assessee preferred appeals before the Appellate Assistant Commissioner against the assessments. The Appellate Assistant Commissioner held that under the provisions of the trust deed, there was nothing to prevent the trustees from spending the income of the trust only for the support and maintenance of the poor and indigent relations of the settlor and, therefore, it could not be said that the object of the assessee was only charitable. The orders of the Income-tax Officer were upheld.;