| Case ID |
42cd35d0-747e-4002-9312-3854b1d6edcb |
| Body |
View case body. Login to View |
| Case Number |
Income-tax Reference Case No. 129 of 1994 |
| Decision Date |
Sep 18, 1996 |
| Hearing Date |
|
| Decision |
The court concluded that the B.E.L. Employees Death Relief Fund and Service Benefit Fund Association was not entitled to exemption under section 11 of the Income Tax Act, 1961. The ruling emphasized that the benefits conferred by the association were private and limited to its members and their dependents, thus failing to meet the definition of charitable purpose as outlined in section 2(15) of the Act. The court highlighted the need for a trust to provide benefits to the community or a section of the community at large, rather than just to individuals associated with the fund. The judgment referenced previous cases, noting that the association's objectives did not align with those deemed charitable, leading to the conclusion that the income generated by the fund was taxable under the Act. |
| Summary |
The Karnataka High Court's ruling in the Income-tax Reference Case No. 129 of 1994 addressed the tax-exempt status of the B.E.L. Employees Death Relief Fund and Service Benefit Fund Association under the Income Tax Act, 1961. The court found that the association was established to provide financial assistance primarily to its members and their dependents, thus failing to qualify as a charitable organization. The court examined the definition of 'charitable purpose' as stipulated in section 2(15) of the Income Tax Act, emphasizing that an organization must serve the public or a definable section of the community to obtain tax exemption. The ruling clarified that benefits restricted to members do not satisfy the criteria for charitable status, and as a result, the income derived by the association was liable to income tax. This case serves as a significant precedent for understanding the limitations of tax exemptions for organizations claiming charitable status, reinforcing the principle that true charity must transcend private benefit and serve a broader public interest. |
| Court |
Karnataka High Court
|
| Entities Involved |
Not available
|
| Judges |
R. P. Sethi, C.J.,
S. Rajendra Babu, J
|
| Lawyers |
E.R. Indrakumar,
K.R. Prasad
|
| Petitioners |
Not available
|
| Respondents |
B.E.L. Employees Death Relief Fund and Service Benefit Fund Association
|
| Citations |
1999 SLD 111,
1999 PTD 753,
(1997) 225 ITR 270
|
| Other Citations |
CIT v. Andhra Pradesh Police Welfare Society (1984) 148 ITR 287 (AP),
CIT (Addl.) v. Ahmedabad Mill Owners Association (1977) 106 ITR 725 (Guj.),
Ahmedabad Rana Caste Association v. CIT (1971) 82 ITR 704 (SC),
CIT v. Andhra Chamber of Commerce (1965) 55 ITR 722 (SC),
East India Industries (Madras) (Pvt.) Ltd. v. CIT (1967) 65 ITR 611 (SC),
Hobourn Aero Components Ltd.'s Air Raid Distress Fund, In re (1946) 1 Ch. 86,
IRC v. City of Glasgow Police Athletic Association (1952) S.L.T. 136,
IRC v. Yorkshire Agricultural Society (1928) 1 KB 611 (CA),
Mohammad Ibrahim Riza Malak v. CIT AIR 1930 PC 226,
Oppenheim v. Tobacco Securities Trust Co. Ltd. (1951) AC 297,
Oxford Group v. IRC (1949) 2 All ER 537,
Powell v. Compton (1945) 1 Ch. 123 (CA),
Royal College of Surgeons of England v. National Provincial Bank (1952) AC 631 (HL),
Ryan v. Forrest (1946) 1 Ch. D 86,
Sakthi Charities v. CIT (1984) 149 ITR 624 (Mad.),
Shashikant Laxman Kale v. Union of India (1990) 185 ITR 104 (SC)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
11,
2(15)
|