Charitable trust: a study under income tax act, 1961


This paper deals with charitable trusts and the main purpose to serve a cause its not necessary that the object should be to benefit the whole of mankind or all persons in particular country or state. It is sufficient if the intention to benefit a section of the public, as distinguished from a specified individual, is present. However, the section of the community sought to be benefited must be sufficiently defined and identifiable by some common quality of a public or impersonal nature. An institution set up with the object of promoting trade or commerce is a charitable institution as it promotes common good through enhancement of business. However, an institution which merely regulates or enhances the business of its members, is not a charitable institution. Thus, where the proprietors of hotels formed an association for obtaining articles on permit for supplying them to members and protecting their business interest, the association was held not to be a charitable one for them purpose of the Act. And thus has to be regulated and looked after for the betterment of the society.

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