Section 2(15) Meaning of Charitable purpose

Section 11 Income from Property held for Charitable or Religious Purpose

Section 11(1A) Capital Gains deemed to be Applied for Charitable /Religious Purpose

Section 11(1B) Consequences if Income not applied for Specific Purpose

Section 11(2) Exemption if Income accumulated for Specific Purpose

Section 11(3) Deemed income

Section 11(4) Business Income

Section 11(5) Specified Investments

Section 12 Conditions for claiming exemption

Section 12AA Registration of Trust

Section 13 Revocation of exemption

Section 115BBC Anonymous Donation

Section 115TD Tax on accreted income

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 TABL OF CONTNTS
CHAPTR 1: INTRODUCTION ...............................................................................................02

1.1 Meaning and Definition ...............................................................................................02

1.2 Evolution ......................................................................................................................02
1.3 Conceptual Analysis/ Theories ....................................................................................03

CHAPTR 2: LEGAL ANALYSIS ...........................................................................................04

2.1 Constitutional Provisions .............................................................................................04

2.2 Implications of the Removal of Right to Property from Fundamental Rights .............08

CHAPTR 3: ROLE OF JUDICIARY .....................................................................................10

3.1 Judicial Activism .........................................................................................................10

3.2 Landmark Cases ...........................................................................................................10

CHAPTR 4: CONCLUSION....................................................................................................13

BIBLIOGRAPHY/ RFRNCS ...........................................................................................15

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 CHAPTER 1: INTRODUCTION
What are trusts?

Trusts have not been defined under the Income-tax Act, 1961. The dictionary meaning of "trust" in so far
as it relates to the realm of law is "an arrangement" by which property is handed over to or vested in a
person, to use and dispose it off for the benefit of another person."

Trusts can be broadly classified into two categories, viz.,

(i) Public,
(ii) (ii) Private.

Public trust: A public trust is one which benefits the public at large or some considerable portion of it. A
public trust can be of two types, viz., (a) Public charitable trust, (b) public religious trust.

Charitable Activity

However the term Charitable Activities is open to subjective interpretations. The law has
provided inclusive meaning of Charitable Purpose vide section 2(15) to the Act. It read as
follows:

Charitable purpose includes relief of the poor, education, medical relief. Preservation of
environment including watersheds, forests and wildlife and preservation of monuments or
places or objects of artistic or historic interest and the advancement of any other object of
general public utility:

Provided that the advancement of any other object of general public utility shall not be a
charitable purpose, if it involves the carrying on of any activity in the nature of trade,
commerce or business, or any activity of rendering any service in relation to trade,
commerce or business, for a cess or fee or any other consideration, irrespective of the
nature of use or application, or retention, of the income from such activity:

Most of the litigations for rejection of applications are pertaining to the charitable purpose of

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the trust. The purpose can be inferred out from the indenture of the trust. So, it is advisable
to draft trust deed in a very meticulous manner at very first instance so as to avoid
unnecessary interpretational disputes.

CIT Vs. Andhra Chamber of Commerce (1965)(SC)

Definition of term Charitable purpose is inclusive and not exhaustive. The expression is
not restricted to the objects beneficial to whole mankind. An object which is beneficial to a
section of the public is also a charitable object.

CIT Vs. Bar Council Of Maharastra (1981) (SC)

The expression advancement of general public utility includes any object beneficial to
public or a section of the public as distinguished from an individual or a group of individual.

Status of Trust

Section 4 of the income tax Act creates a charge of tax on every person. The term person
has been defined in section 2(31). It may be noted that the term person doesnt make any
reference to trust. Hence there had been a great litigation in the courts as to what is the
status of trust. Basically the root of the dispute was in a dilemma to treat the trust as an
Individual or an A.O.P. However, in CIT Vs. Deepak Family Trust (1995) 211 ITR (Guj.) ,
CIT Vs. Venu Suresh Sanjay Trust (1996) 221 ITR 649 (Mad.), it was held that a trust is an
Individual for the purpose of Income tax law.

Registration Procedure

Income Tax Act 1961 requires a trust to get registered under Section 12AA to claim the
exemptions as mentioned in the Section 11 & 12 to the Act. Lets have a look on the
procedure laid down under Section 12AA.

Every trust shall make an Application to the Commissioner of Income Tax or Director Of
Income Tax [Exemption] in the prescribed format and along with prescribed documents. It is
worth noted that the authority to whom the application is made is the C.I.T or D.I.T [Exem.].
There has been a wide debate on this fact that the Application shall be made to Income Tax

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officer and not to such higher Ranked officers as they have to spent their lot of time in just
administrative tasks. However, in practical Situation Income Tax Officers takes care of all
the application received in this regard on behalf of C.I.T or D.I.T [Exempt.]

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CHAPTER 2: LEGAL ANALYSIS

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CHAPTER 3: ROLE OF JUDICIARY

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CHAPTER 5: CONCLUSION

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 BIBLIOGRAPHY

BOOKS

M.P. Jain, Indian Constitutional Law (7 ed. 2014).

D.D. Basu, Commentary on the Constitution of India (8 ed. 2009).
Ranbir Singh and Lakshminath, Constitutional Law, (1 ed. 2006).
M.P. Jain, Outlines of Indian Legal and Constitutional History, (7 ed. 2014).

ONLINE ARTICLES

Right to Property is a constitutional right- Supreme Court, Times of India, April 18, 2011
available at http://timesofindia.indiatimes.com/india/Right-to-property-is-a-
constitutional-right-Supreme-Court/articleshow/8019243.cms
SC notice to Centre on right to property, Livemint, February 28, 2009 available at
http://www.livemint.com/Companies/CwDFVHH9htM8LVGmATOzXP/SC-notice-to-
Centre-on-right-to-property.html
Court rejects plea to make property a fundamental right, The Hindu, October 10, 2010
available at http://www.thehindu.com/news/national/Court-rejects-plea-to-make-
property-a-fundamental-right/article15783836.ece

WEB SOURCES

http://www.constitution.org/cons/india/p12.html
http://www.constitution.ru/en/10003000-03.htm
http://www.humanrights.cn/zt/magazine/200402004812104351.htm
http://www.hkhrm.org.hk/english/law/const02.html
http://www.constitution.org/cons/india/p03031.html
http://lawmin.nic.in/ncrwc/finalreport/v1ch3.htm
http://www.prsindia.org/billtrack/the-land-acquisition-rehabilitation-and-resettlement-
bill-2011-1978/