Case Law Details
Rajah Sir Annamalai Vs CCIT (Madras High Court)
The fact that Clause 10 of the Trust Deed states that the fees and charges shall be fixed taking into account the cost of running including future development thereof though without an element of profit motive indicates that the actual intention of the trust is only to generate income by charging fees while admitting children’s to their Schools.
The Deed of Trust has also not declared the source of fund for achieving the purpose. It merely stipulates the Trustees are authorised to borrow monies for the purposes of the trust with or without security from banks, financial institutions or otherwise and also have the power to offer a security of any immovable or movable property or other security.
The fact that there is no clause for providing free education for children coming from different social and educational backgrounds and the scholarship to under privileged children shows that there is only profit motive and the institutions are to be run only out of fees collected by admitting children’s to their schools.
The Trust Deed also seems to indicate that the source of funds of the petitioner’s trust is only from the school fees to be collected during these financial years. Therefore, it cannot be construed that the petitioner’s Trust’s Schools were not for the purpose of profit.
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