- (1.) THESE two Income-tax References Nos. 31 and 32 of 1977 have been made by the Income-tax Tribunal at the instance of the revenue. The two questions, one in each reference, referred to this court for determination are : I. T. R. No. 31 of 1977 : " Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the assessee was a charitable trust and entitled to exemption under Section 11 ? " LT. R. No. 32 of 1977 : " Whether, on the facts and in the circumstances of the case, the Tribunal is right in upholding the Appellate Assistant Commissioner's order deleting the addition of Rs. 40,290 made by the Income-tax Officer ? "
(2.) THE amount referred to in the second question is claimed to be chargeable by the revenue on the plea that the assessee-trust is a private trust. The answer to this question, therefore, also depends on the answer to the first question and so need not be separately dealt with.
(3.) THE assessee is a trust known as Smt. Guryani Brij Ballabh Kaur Trust, Kartarpur. For the assessment year 1971-72, it was assessed as an association of persons because the ITO negatived the plea that it was a charitable trust. The finding of the ITO was confirmed, on appeal, by the AAC but was reversed, on second appeal, by the Appellate Tribunal. The Tribunal, after taking into consideration the various objects of the trust mentioned in the memorandum of association, held : " It is amply clear from the perusal of the aforesaid objects of the assessee-trust that the purpose of the trust is to establish educational institutions and give relief to the poor people. Advancement of object of general public utility is also included in the trust. The lower authorities laid undue emphasis on the fact that in the memorandum of association, the first object is to repair and maintain the samadhs of the ancestors of the family of the Guru of Kartarpur and to hold mela to commemorate the memory of the late Shrimati Guryani Brijballabh Kaur. Because this object has come first in the list of objects, the lower authorities treated that as the main object of the assessee-trust. The approach of the lower authorities is obviously erroneous. Merely because the object to repair and maintain the samadhs of the ancestors of the family of the Guru of Kartarpur and to hold mela every year to commemorate the memory of the late Shrimati Guryani Brijballabh Kaur and to bear the expenses of the said mela out of the funds of the trust, has been stated in the beginning of the list of the objects, it cannot be concluded that it is the main object of the trust. Whether the object of the trust has been stated in the beginning, in the middle or in the end, it does not determine the factor of the main object. What is the main object ? This question will have to be considered in the totality of the objects of the trust. There is nothing to show that the funds of the trust can be utilised for personal purposes by the trustees. From a perusal of the objects, it is clear that the funds of the trust are to be utilised for charitable purposes ;as defined in Section 2, Clause (15), of the Act 1961. ";