SOUTH ASIA REGION
Kirti
Chand Tarawati Charitable Trust v. Director of Income Tax [1999] 105 TAXMAN 686
In
the case of a trust that, although created for charitable purposes, was found to
be engaged mainly in the construction of a religious temple in which no
charitable activities were carried out, the High Court of Delhi has held that
the tax authority can look beyond the ostensible purposes expressed in the
governing instrument. Accordingly, the tax authority was entitled to deny
renewal of recognition as a charity (for the purposes of receiving donations
under section 80G Income Tax Act 1961) on the grounds that the trust was engaged
in non-charitable activities.
Commissioner
of Income Tax v. Palghat Shadi Mahal Trust [1999] 233 ITR
722
A
trust established for the purpose of establishing institutions for the
educational, social and economic advancement of Muslims and for religious and
charitable objects recognized by Muslim law was held to be exempt from income
tax as a charitable trust by the Kerala High Court. Rejecting the contention of
the tax authority that the trust was established for the benefit of a particular
religious community, the court found that the Muslim community in the state of
Kerala is listed as a "backward class" and therefore the trust was
entitled to exemption as being for the benefit of "Scheduled Castes,
Scheduled Tribes or backward classes" even if only intended to benefit all
the members in one of the listed castes.
National Health & Education Society v. Assistant Director of Income Tax [1999] 70 ITD 330 (MUM.)
A
hospital and medical research center that levied charges, including service
charges, on some patients according to their financial status while treating
others for free or at concessional rates was held by the Income Tax Appeal
Tribunal in Mumbai to exist solely for philanthropic purposes and not for
profit, and thus was entitled to exemption from income tax on income from the
hospital and the research center under Sections 10 (21) and 10 (22A) of the
Income Tax Act 1961. However, income from bank interest and a gift shop fell
outside the scope of the exemption.