J. B. MEHTA J. - These three references are for the three assessment years 1968-69, 1969-70 and 1970-71 and the same questions have been referred :
'Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee was entitled to deduction under section 80G of the Act in respect of donation of Rs. 60,000 to P. G. Mehta Charitable Trust ?'
The assessee is Messrs. Swastik Textile Trading Co. Pvt. Ltd. The assessee has donated Rs. 60,000, Rs. 30,000 and Rs. 49,752 in the three assessment years in question to Shri P. G. Mehta Charitable Trust (hereinafter referred to as 'the trust'), and claimed deduction under section 80G of the Income-tax, 1961, in respect of the said donation. The Income-tax Officer and the Appellate Assistant Commissioner had in the first assessment year rejected the claim of these deduction on the ground that the relevant object in clause 4(g) of the trust deed of establishing, maintaining, running and helping gaushalas, panjarapoles and other similar institutions for animals, etc., was religious object and, therefore, in view of clause 5, the trustees would be entitled to use the amount for non-charitable purposes and, therefore, this clause was held to violate section 80G(5)(ii). This view having been reversed by the Tribunal by following the binding decision in having been reversed by the Tribunal has referred the following question at the instance of the revenue :
'Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee was entitled to deduction under section 80G of the Act in respect of donation of Rs. 60,000 to P. G. Mehta charitable Trust ?'
This question is referred in the first reference. In the other two references the same question is referred and the only difference is as regards the amounts of donation.
At the outset we would refer to the relevant provisions of the trust known as Purshottam Gordhandas Mehta Charitable Trust. The objects of the trust are mentioned in clause 4. All other clauses are charitable as regards the giving of scholarship, helping students, establishment of educational institutions, relief of poverty, medical relief, helping blind, deaf and in times of calamities like flood, fire, earthquake, epidemics, accidents, etc., and the controversy centres round only clause (g), which, as stated earlier, is regarding establishing, maintaining, running and helping gaushalas, panjarapoles and other similar institutions for animals, etc. Clauses (h) and (i) are also in the same spirit :
(h) contributing to any fund, society, trust or institutions started for any of the objects hereinabove mentioned.
(i) and any other public charitable object that may not be specifically covered in the above clauses but are similar to the above objects that the trustees may think fit and proper.
Clause 5 is as under :
'The trustees shall be entitled to use or set apart such part of the income for all or any of the above objects and they shall not be bound to spend the whole of the income in any year for all or any of the said objects or to utilise away the whole or any portion of the accumulated income.' Therefore, the whole context and setting of this clause 4(g) is in the context of this entire charitable object of advancement of education, medical relief, helping blind, deaf, dumb, disabled and aged human beings and people in distress. In that context and setting clause (g) has been put up for establishing, running and helping gaushalas and panjarapoles and other similar institutions for animals, etc., gaushalas would be for preservation and improvement of breed of bovine animals while panjarapoles, would be for protection and preservation of infirm animals. Therefore, from the whole set of institutions which are contemplated in the coverage of clause (g) being similar to only gaushalas and panjarapoles, it is obvious that the very naming of these institution unfolds the implicit object which is highly charitable and in line with the earlier clauses (c), (e) and (f), where the distress of human beings was sought to be relieved by giving relief in cases of poverty or by giving medical relief or by helping distressed persons or other visited by calamities, etc. the whole object of this clause (g) was to go to the rescue of dumb and infirm animals protected by panjarapoles or to assist the gaushalas kept for the well-being of bovine animals and only similar institutions were intended to be served by the philanthropic object of this entire charity. It is in the context of the aforesaid setting of this trust that we will have to consider the relevant provisions and the exemption in section 80G about deduction in respect of donation to a charitable fund or institution. Section 80G which provides for this deduction enact in sub-section (2)(a)(iv) that it must be to any other fund or institution to which this section applies. Sub-section (5) provides that this section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfills the conditions set out therein. Condition in sub-section (5)(ii), which has been relied upon by the revenue as having been followed, runs as under :
'(ii) the instrument under which the institution or fund is fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose.'
If the relevant clause 4(g) in the trust is held to be providing a charitable purpose, there would be no violation of this relevant condition. That is why the whole argument is advanced that this being a religious purpose is not a charitable purpose. The definition of the term 'charitable purposes' is given in section 2(15) as included relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit. The learned standing counsel had also referred to section 11(1) corresponding to old section 4(3)(a) of the old Act where exemption of any income from property held for charitable or religious purposes is given because it provides that the following income shall not be included in the total income of the previous year of the person in receipt of the income, -
(a) income derived from property held under trust wholly for charitable or religious purposes to the extent to which such income applied to such purposes in India.......'
The argument, therefore, proceeded in view of this distinction between religious and charitable purposes in section 11(1)(a) when the relevant exemption in section 80G(5) provides for deduction of donation only to charitable funds or institutions, if the purpose was religious, no exemption was attracted.
This whole argument proceeds on an assumption of necessary antithesis between religion and charity which is wholly unfounded as per the settled legal position. The relevant scheme of these provisions has been interpreted in various decisions and the wide connotation of 'charity', so far as this fourth clause as per the classification of Lord Macnaghten regarding the other 'objects of general public utility' is concerned, is given a very wide interpretation, especially because of the modification made while adoption that classification in our statutory definition and looking to the notions in our community. The link with the English decision having been broken because of this statutory definition, this expression has been very widely interpreted. The whole emphasis has been on the essential character of charity which is underlying all these clauses of altruistic thought and action as opposed to selfishness. Therefore, the object beneficial to mankind or humanity is interpreted in a wide manner so as to embrace within its scope those acts of charity, which advance general public morality, alleviating suffering of weak, infirm animals or preventing cruelty to animals, encouraging compassionate feeling and tender treatment by protecting such domestic animals, by service of such animals or looking after and promoting the well-being of these domestic animals, including such bovine animals which are the mainstay of our agricultural community. Such objects are looked upon as proper objects of public charity in this country.
In the earlier decision in Vallabhdas Karsondas Natha v. Commissioner of Income-tax : 15ITR32(Bom) , the relevant question had arisen in the context of the two clauses 4 and 8 of the trust deed in question. Clause 4 was regarding supply of fodder to animals and cattle and clause 8 was regarding such other purpose beneficial to the Hindu community and Indians in general not falling under the preceding heads. The learned chief Justice, Stone C.J., considering clause 4, observed at page 44, that such a disposition, for supply of fodder to animals and cattle would not be a charitable trust if it had to be construed in England by the English law because feeding of animals which was obnoxious to mankind could not be said to be considered, even apart from the charitable aspect of the matter, the feeding of dumb creatures was in Hindu religion regarded as religious. He relied on the pertinent observation of Lord Wright in the privy Council decision in All India Spinners Association v. Commissioner of Income-tax  12 ITR 482:
'The Indian Act gives a clear and succinct definition which must be construed according to its actual language and meaning. English decisions have no binding authority on its construction and though they may some times afford held or guidance, cannot relieve the Indian courts from their responsibility of applying the language of the Act to the particular circumstances that emerge under conditions of Indian life.'
Therefore, he found no difficulty in treating both these clauses as falling within the wide definition of 'charitable purpose' given by our Indian Act in section 4(3), where charitable purpose included advancement of any other object of general public utility.
Chagla J. also : 15ITR32(Bom) rested the matter on the broad footing. At the outset he held that according to Hindu religion and philosophy, animals have the same soul as human beings have and the spark of divinity was as much present in them as in human beings. And so the trust for supply of fodder to animals and cattle was a good religious object. He, however, rested it on the wider basis that supply of fodder to cattle and animals was not only a good religious trust but it was the classic decision in In re Wedgwood : Allen v. Wedgwood  1 Ch 113 (CA), where the trust was for the protection and benefit of animals and the court of Appeal in England had held that it was a good and valid charitable trust. A passage in the judgment of Lord Cozens-hardy M.R. at page 117 was reproduced :
'Apart from authorities which are binding upon us, I should be prepared to support the trust on the ground that it tends to promote public morality by checking the innate tendency to cruelty.'
Even a passage of Lord Justice Swinfen Eady, at page 122, was reproduced :
'A gift for the benefit and protection of animals tends to promote and encourage kindness towards them, to discourage cruelty, and to ameliorate the condition of the brute creation, and thus to stimulate humane and generous sentiments in man towards the lower animals, and by these means promote feelings of humanity and morality generally, repress brutality, and thus elevate the human race.' The borderline decision in In re Grove-Grady : Plowden v. Lawrence  1 Ch 557 (CA) was distinguished. Chagla J. then observed as under : 15ITR32(Bom) :
'It is perfectly true that the basis of holding a trust for the benefit of animals as a good charitable trust is that it falls within the fourth category of Lord Macnaghtens famous definition in Pemsels case  AC 531 (HL), namely, that it is a trust beneficial to the community. Whatever the view may be in England as to protection of animals and as to feeding of animals, we must consider what the views are in our own country, and it is patent that Indians as a race are extremely kindly disposed towards animals who have been the object of charity at the hands of many munificent donors.'
The warning given by the Privy council in In re The Trustees of the Tribune  7 ITR 415 was reiterated in applying the English decisions in considering what is useful or beneficial to the community : 15ITR32(Bom) :
'But useful and beneficial in what sence The courts have to pronounce whether any particular object of a bounty falls within the definition; but they must in general apply the standard of customary law and common opinion amongst the community to which the parties interested belong.'
Therefore, Chagla J. in terms held that he had no hesitation in holding that in India and especially among the Hindus both the customary law and the common opinion in that community would certainly uphold the view that giving fodder to animals and cattle is a good charity. It was also pointed out that clause 8 was almost verbatim the fourth head of Lord Macnaghtens famous definition in Pemsels case  AC 531 , and even the scheme of the Transfer of Property Act was to exempt a transfer of property from the restrictions against transfer in perpetuity, if it was for the benefit of the restrictions against transfer in perpetuity, if it was for the benefit of the public in the advancement of religion, knowledge, commerce, health, safety or any other object beneficial to mankind.
In the next decision in Pradhan v. Bombay State Federation Gaushalas and Panjarapoles  59 Bom LR 890, Chagla C.J. in terms held that the object of a society which was formed to admit into its membership institutions like gaushalas and panjarapoles, that is to say, for taking all possible means for the complete protection of cows and bovine cattle from premature deaths, neglect and deterioration and to save growing cattle by improving their breed and raising their economic standard, was for a charitable purpose under the head of any other object of general public utility. It was pointed out that a gaushala was a public charitable institution working for the protection and preservation of cows and calves and bovine cattle and panjarapole was also an institution working for the protection, welfare and preservation of bovine cattle and other animals. Therefore, a society whose object was to save cows from destruction and of improving the standard of cattle in our country was surely working for the object of general public utility because cattle are most important for the rural economy of India. This settled legal position would leave no doubt as to the object of the present trust even in clause 4(g) as being a charitable purpose.
The learned standing counsel, however, wanted to rely on the two borderline English decisions in In re Grove-Grady : Plowden v. Lawrence  1 Ch 557 (CA), which was distinguished by Chagla J. in the aforesaid decision; the trust was for founding, establishing and maintaining of a charitable institution to be called, 'The Beaumont Animals Benevolent Society', and one of its objects was providing refuse for the preservation of 'all animals, birds or other creatures not human'. In the Court of Appeal, Lord Hanworth M.R. and Russel L.J. reversed the decision of Romer J. on the ground that although a trust if in its execution there was necessarily involved a benefit to the community, if that element was wanting, the trust would be bad. Even Lord Hanworth M.R., at page 570, pointed out the settled legal position of the English decisions which laid down that if the object was to enhance the condition of animals that were useful to mankind, or to secure good treatment for animals, whether those animals were useful to mankind or not, or to unsure human conducted towards, and treatment of, them whether in respect of a particular subjection of them to the use of mankind, as for food or in what is called vivisection, such object are to be deemed charitable. Even a trust providing home for lost dogs was held to be charitable and is an institution for the protection of such domestic animals. This case was, however, found to be a borderline case because even though animals were to be protected from being molested or destroyed by man by shooting, there was nothing to prevent the weaker animals being destroyed by stronger animals themselves. Therefore, the trust was not held to satisfy the test of producing benefit to mankind by its elevating moral influence. Russel L.J. had also applied that test, at page 585, by holding that it was a trust not directed to ensure absence or diminution of pain or cruelty in the destruction of animal life because even though animals were saved from being molested and killed by man, they were still liable to be molested and killed by other denizens of the area.
The same is true even of the House of Lords decision in the National Anti-vivisection Society v. Inland Revenue Commissioners  16 ITR (Supp) 1 , where a society, such as an anti-vivisection society, established with the object of causing the prohibition or abolition of operations as experiments on animals, made for the purpose of discovery of means to alleviate the sufferings of human beings, could not be classed as a charity on the ground that, although it prevented possible cruelty to animals, its main object was to prevent the benefits to human beings which were likely to be discovered by scientific knowledge acquired from such operations, by way of vivisection and, therefore, it was held that it was not for the public benefit of the community.
Both these borderline decisions are on the application of the test whether it produced benefit to mankind. That is why in In re Moss (Deceased) : Hobrough v. Harvey  1 All ER 495 , Romer J., at page 497, in terms considered this relevant test as to whether a gift produced some benefit to mankind for determining validity of such a charity. In the context of a gift which was to work for the welfare of cats and kittens needing care and attention, the learned judge pointed out that the care of and consideration for animals which through old age or sickness or otherwise were unable to take care of themselves were manifestations of the finer side of human nature, and gifts in furtherance of those objects were calculated to develop that side and were, therefore, calculated to benefit mankind. Even according to the view taken by Lord Hanworth M.R. in In re Grove-Grady  1 Ch 557 , such a gift for the welfare of cats and kittens needing care and attention was with the object prevent cruelty in relation to cats and kitten had an elevating effect on mankind, and stood on the same footing as one whose object was to alleviate distress among cats and kittens. Therefore, the learned judge pointed out that this test of validity of charity of producing benefit to mankind would be satisfied in such charity for animals, especially when the animals were domestic animals because of the elevating effect on mankind.
Therefore, these two borderline decisions in the context of obnoxious animals or in the context of vivisection, where this narrow test of producing benefit to mankind was not held to be satisfied could not be helpful in the present context, when the trust is for such domestic animals. Besides, the case has to be decided not by that English charity test of benefit to mankind keeping in mind the notions, spirit and preamble of the English charity statute and according to the English law but on the wider consideration of the welfare of the public or object being for advancement of public legal position has to be decided in our country not on the English notions of English law but on the notions and connotations prevailing in our Indian community where such trust with such elevating influence on the mankind would surely satisfy the wider test of advancement of the object of public utility or public welfare. Even or constitution enshrines high values of fraternity in the very preamble clause which is held to be a part of our constitutions and, therefore, any trust which has its object to advance fraternity not only amongst human brethren but also with the animal life would fulfil this cherished value. Even the directive principles in article 48A and animal husbandry on modern and scientific lines, and shall, in particular, take steps for preserving and improving breeds and prohibiting the slaughter of cows and calves and other milch and draught cattle. With that constitutional horizon and the constitutional mandate in our mind, we could never hold in our country that such a trust for establishment and in aid of such gaushalas which are for preserving and improving the breed of cows and bovine cattle and the panjarapoles which would prevent slaughter of such cattle and calves including milch and draught cattle was not for the advancement of public good and welfare so as to fall in the fourth category of this statutory definition, which is the fourth category of Lord Macnaghtens classification.
The entire legal position of the scheme underlying these sections has been examined in Sole Trustee, Loka Shikshana Trust v. Commissioner of Income-tax : 101ITR234(SC) , the wider question was not examined as to whether the limitation which is now introduced in the definition in section 2(15) by the words 'not involving the carrying on of any activity for profit' qualifies only the last category or even the first three categories of charitable purpose, viz., relief of the poor, education and medical relief. It was, however, held that the change in the definition categorically laid down that, in order to bring the case within the fourth category of charitable purpose or advancement of any other object of general public utility, it was necessary to show that : (1) the purpose of the trust is the advancement of any other object of general public utility, and (2) the above purpose does not involve the carrying on of any activity for profit. What constitutes 'business' activity was explained at page 243 and it was held that for the limitation to be attracted such a profit must pervade the whole series of transactions effected by the person in the course of his activities. In the concurring judgment by his Lordship Beg J. (as he then was), first, the entire history of this law about charity was examined. It was pointed out, at page 249, that the fourth-fold classification of charitable purposes had a history in English law. The statute of Elizabeth I had a preamble containing an illustrative list of charitable objects which was never treated as exhaustive, and in English law a purpose was considered, in the eye of law, to be charitable only if it came within the letter or the spirit and intendment of the preamble of the statute of Elizabeth. Pemsels ratio  AC 531 of Lord Macnaghten was pointed out where the four-fold classification of charitable purpose was adopted : (1) relief of property, (2) advancement of education, (3) advancement of religion, and (4) other purposes beneficial to the community, not falling under any of the preceding heads. Thereafter, it was pointed out, at page 250, that the framers of our Indian Income-tax Act, 1922, adopted this four-fold classification with some modifications, and the term 'medical relief' was apparently substituted for 'advancement of religion'. Lord Wrights observations in the Privy council decision in All India Spinners Association v. Commissioner of Income-tax  12 ITR 482, were considered where it was pointed out that the words of the section were, 'for the advancement of any other object of general public utility', whereas Lord Macnaghtens words were. 'other purposes beneficial to the community'. The difference in language, particularly the inclusion in the Indian Act of the word 'public', was held to be of importance. It was, therefore, pointed out that the trend of judicial pronouncements was to construe the words 'general public utility' in section 4(3) of the 1922 Act, not ejusdem generis but very widely. In Commissioner of Income-tax v. Andhra Chamber of Commerce : 55ITR722(SC) , it was held that the expression 'object of general public utility' in section 4(3) would, prima facie, include 'all objects which promote the welfare of the general public'. Thereafter, it was pointed out that the amendment had introduced words of limitation because otherwise this fourth residuary category was too wide and Parliament wanted to prevent its abuse : 101ITR234(SC) , it was pointed out, this limitation test introduced by the amendment was as under :
'Does the purpose of the trust restrict spending the income of a profitable activity exclusively or primarily upon what is charity in law If the profit must necessarily feed a charitable purpose, under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter the charitable character of the trust. The test now is, more clearly than in the past, the genuineness of the purpose tested by the obligation created to spend the money exclusively or essential on charity. If that obligation is there, the income becomes entitled to exemption. That, in our opinion, is the most reliable test.'
Thereafter, the difficult question as to the meaning of the term 'charitable purpose', which was only indicated in section 2(15), was examined. It was pointed out that a common concept or element of 'charity' was shared by each of the four different categories of charity by observing as under - See : 101ITR234(SC) :
'It is true that charity does not necessarily exclude carrying on an activity which yields profit, provided that profit has to be used up for what is recognised as charity. The very concept of charity denotes altruistic thought and action. Its object must necessarily be to benefit others rather than ones self. Its essence is selflessness. In a truly charitable activity any possible benefit to the person who does the charitable act is merely incidental or even accidental and immaterial. The action which flows from charitable thinking is not directed towards benefiting ones self. It is always directed at benefiting others. It is this direction of thought and effort and not the result of what is done, in terms of financially measurable gain, which determines that it is charitable. This direction must be evident and obligatory upon the trustee from the terms of a deed of trust before it can be held to be really charitable. We think that this governing idea of charity must qualify purpose of every category enumerated in section 2(15) of the Act of 1961.'
It was also pointed out that the limitative words were introduced by the Act of 1961 to qualify the last and widest category of objects of public utility and were really intended to bring out what has to be the dominant characteristic of each and every category of charity. Therefore, these limitative words were intended to bring the last and most general category in line with the nature of activities considered truly charitable and mentioned in the earlier categories.
This entire illuminating history of the whole concept of charity and the emphasis as to the govern idea on its altruistic concept would surely be satisfied in such a trust for such domestic animals in any event, especially when public good or welfare is to be determined by the notions prevailing in our Indian community in the light of our enshrined values. Even in Commissioner of Income-tax v. Shri Jagannath Jew : 107ITR9(SC) , a question had arisen in the context of Income-tax provision in the context of a trust of a pious Hindu Brahmin, where he made dedication not only for the Thakoorbaree but he gave directions to the trustees for spending large amounts on charitable objects like feeding the poor, maintenance of a garden, art gallery, aviary, menagerie, taking care of birds and noncarnivorous animals. Even though the amount spent on pooja was small, the dedication to the deity was held to be complete because of the dominant religious and charitable purpose behind this trust. At page 18, it was pointed out that a preponderant of the income was spent on general public charitable causes like poor feeding, art gallery, aviary, menagerie, and keeping a garden. Together with the cost of rituals the budget was dominantly religious, charitable. At page 19, it was pointed out that the donor was not tied down by bigotry to performance of poojas, important though they were. A more cosmic and liberal view of Hinduism informed his soul and so in his declaration of dedication to Shree Jagannathji he addressed to the managers many directions of a broadly religious and charitable character. His injunction to feet the poor was Narayan Seva for worship of God through service of man in a land where the divinity in Daridra Narayan is conceptually commonplace and, while it is overtly secular, its motive springs from spiritual sources. It is religion to love the poor. Likewise his insistence on the aviary and the menagerie and throwing open both to the people to see and delight is not a mundane mania but has deeper religious roots. Hinduism worships all creation :
(Peace be unto all bipeds and so to all quadrupeds). Indeed, the love of sub-human brethren is high religion.
'He prayeth best, who loveth best All things both great and small For the dear God who loveth us He made and loveth all. (Coleridge, in Ancient Mariner)
From the Budha and Mahavira to St. Francis of Assissi and Gandhiji, compassion for living creatures is a profound religious motivation. The sublime mind of Mullick was obviously in religious sympathy with fellow beings of the lower order when he showed this tenderness to birds and beasts and shared it with the public. The art gallery too had link with religion in its wider connotation although it is plainer to regard it as a gesture of aesthetics and charitable disposition. It was pointed out that the whole point was that the multiform disposition pointed out that the whole point was that the multiform disposition had been united by a spiritual thirst, and if read in their integrality could be designated as religious-cum-charitable. In sum, the primary intendment was to dedicate as debuttar and to direct fulfilment of uplifting religious and para-religious purposes, the focus being on worship of Sree Jagannathjee and the fall out of some subsidiary, yet significant, charitable items. Therefore, even though this decision was in the context of this dedication whose central focus was Sree Jagannathjee, the very significant donation including one for the maintenance of a glorious garden, art gallery, aviary, menagerie, etc., was held to be significantly charitable. Therefore, this decision settles any doubt in the present controversy as to there being some assumed antithesis between religion and charity. As pointed out by Chagla J., in the earliest decision such a trust for animals, particularly domestic animals, may be both good charity and good religion. Compassion for living creatures although it motivates all true religion is also practical spirituality as it has an elevating moral influence, fostering a deep sense of fellow-feeling and fraternity. Such acts not only fulfil our cherished human values but they equally promote public good and welfare and are, therefore, dominantly religion-charitable. Therefore, so far as the present trust is concerned, as per the settled legal position, there can be no doubt as to the object of clause 4(g) being completely a charitable one.
The learned standing counsel wanted to rise a totally new point on the basis of this new limitation added in section 2(15). No such case was ever taken up before the fact-finding authorities and no such case can now be raised in this reference for the first time as this is a mixed question of fact and law. Even before the Tribunal no such attempt was made to raise such a question. The whole setting and context of clause 4(g), as earlier pointed out, when read even with the residuary clauses (h) and (i), makes the whole object abundantly clear, especially when clause 4(g) mentions the gaushalas and panjarapoles and other similar institutions, which are all along referred to as serving public charitable objects. It is obvious that looking to the object, the whole setting and context of this trust, this question of fact was rightly never attempted to be raised in view of the aforesaid settled legal position. Therefore, there is no substance even in the last contention raised by the learned standing counsel that clause 4(g) must be tested in the light of the newly added limitation in section 2(15).
In view of the aforesaid discussion, the answer in the present reference must be in the affirmative, that is to say, in favour of the assessee and against the revenue. The reference is accordingly disposed of and the revenue shall pay the costs of the assessee. Our answer in the other references Nos. 11/75 and 249/75 is also identical. Thus, these two references are also disposed of accordingly giving the same answer. The revenue shall pay the costs of the assessee in those two references