Charitable purpose, includes relief of the poor, education, medical relief and the advancement of any other object of general public utility, but does not include a purpose which relates exclusively to religious teaching or worship. [Charitable Endow-ments Act, 1890 (6 of 1890), s. 2]
Means relief of the poor, education, medical relief and the advancement of any other object of general public utility without the additive words 'not involving the carrying on of any activity for profit', Additional Commissioner of Income Tax v. Surat Art Silk Cloth Manufacturers Association, Surat, (1980) 2 SCR 77: (1980) 2 SCC 31: AIR 1980 SC 387.
The definition of 'charitable purposes' in the West Bengal Estates Acquisition Act, 1953 follows, though not quite, the well-known definition of charity given by Lord Macnaghten in Commissioners for Special Purposes of Income Tax v. Pemsel, (1891) AC 531 (583), where four principal divisions were said to be comprised-trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community not falling under any of the preceding heads. The definition in this Act makes one significant change when it speaks of 'public utility' and the gives a guidance to the whole meaning and purpose of the exemption, Fazlul Rabbi Pradhan v. State of West Bengal, (1965) 3 SCR 307: AIR 1965 SC 1722.
It may be noticed that whereas any object of general public utility was included in the definition of 'charitable purpose' in the Income-tax Act, 1922, the present definition has inserted the restrictive words 'not involving the carrying on of any activity for profit' which qualify or govern the last head of charitable purpose. In CIT v. Andhra Chamber of Commerce, (1965) 55 ITR 722, a case decided by the Supreme Court under the 1922 Act, where the restrictive words were absent, this court laid down that if the primary or dominant purpose of a trust or institution was charitable, any other object which by itself might not be charitable but which was merely ancillary or incidental to the primary or dominant purpose would not prevent the trust or institution from being a valid charity. After the addition of the restrictive words in the definition in the 1961 Act, this court in Addl. C.I.T. v. Surat Art Silk Cloth Manufacturers Association, (1980) 121 ITR 1 affirmed that the aforesaid test of primary or dominant
purpose of a trust or institution still holds good, that the restrictive words qualify 'object' and not the advancement or accomplishment thereof and that the true meaning of the restrictive words was that when the purpose of a trust or institution was the advancement of an object of general public utility it was that object of general public utility and not its accomplishment or carrying out which must not involve the carrying on of any activity for profit, Commissioner of Income Tax v. Bar Council of Maharashtra, Bar Council of Gujarat, (1981) 3 SCC 308: AIR 1981 SC 1462 (1467): (1981) 3 SCR 542. [Income Tax Act (43 of 1961), ss. 2(15) and 11]
Where the predominant object is to subserve charitable purpose and not to earn profit, it would be a charitable purpose. The rulings arising out of IT Act may not be of great help because in the IT Act 'charitable purpose' includes the relief of the poor, education, medical relief and the advance-ment of any other object of general public utility. The advancement of any other object of general public utility is not found under the Delhi Municipal Corporation Act. In other words, the definition is narrower in scope, Municipal Corpn. of Delhi v. Children Book Trust, (1992) 3 SCC 390: AIR 1992 SC 1456: (1992) 2 SCR 535.
To serve a charitable purpose it is not necessary that the object should be to benefit the whole of mankind or all persons in a particular country or State. It is sufficient if the intention to benefit a s. of the public as distinguished from a specified individual is present, Ahmedabad Rana Caste Association v. Commissioner of Income Tax, (1971) 3 SCC 475: (1972) 1 SCR 744: AIR 1972 SC 273.
The test of 'charitable purpose' is satisfied by the proof of any of the three conditions, namely, relief of the poor, education, or medical relief, P.C. Raja Ratnam Institution v. Municipal Corporation of Delhi, AIR 1990 SC 816 (817). [Delhi Municipal Corporation Act, 1957, s. 115 (4) (a)]
The purpose for which an organisation must be formed so that it qualifies as a charitable organisation under the Internal Revenue Code, Black's Law Dictionary, 7th Edn., p. 228.
Is said to be precise and technical, and the phrase is a term of art, National Anti-Vivisection Society v. IRC, (1948) AC 31 (41).
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