Case Law Details
CIT (E) Vs Kanakia Art Foundation (Bombay High Court)
We have perused the objects of the trust with a special focus on the objects which the Commissioner has referred to for holding that they are not charitable in nature. The Commissioner has referred to clause (f) of the objects but reproduced only part of it to contend that the object is ‘to convert plays into episodes on T.V ‘ and this cannot be termed as charitable. In our opinion, the Commissioner has wholly misread the objects. Clause (e) is of the objects is to create a culture among the elite class of the society for considering work of art an asset than can be passed on to the next generation with pride and prestige. Immediately, following clause (f) which has not been fully reproduced by the Commissioner in his order is to write through or with the help of literary persons, of different aptitudes or classes, plays in art and culture and other languages on different topics, to translate plays written different languages into other languages, or to convert plays into drams in to short plays or episodes or T.V. or radio plays. The Commissioner, thus, picked a portion of this clause in isolation to argue that the same was not charitable.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
Revenue has filed this appeal to challenge the judgment of the Income Tax Appellate Tribunal (“the Tribunal” for short). Following question is presented for our consideration:-
” Whether on the facts and circumstances of the case and in law, the Tribunal was right in not appreciating the fact that the objects of the Trust being non charitable / commercial and without a binding clause, the trustees are at liberty / enjoy unfettered discretion to apply the income of the Trust towards attainment of any one of its commercial / non-charitable objects, thus defeating the very purpose of provisions of Section 12AA of the Income Tax Act, 1961?”
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