CHARITABLE TRUSTS
BY
SHALINI GOEL
LECCTURER
SUBHARTI LACOLLEGE
2020-21
Meaning
It is meant for the benefit of public at large.
To get the status of a charitable trust the nature and
purpose of trust is more important.
Strahan: Every lawful trust whatever may be the
objects, if intended to benefit, is a private trust unless
the object is the advancement of a purpose regarded
by law as for general benefit of the community.
Charitable trusts are created for the purposes which
are beneficial to the community.
Charitable purpose
There are three main features of charitable purpose-
Social dimensions or social extensiveness: It
means that the trust is intended to benefit indefinite
individuals who constitute the society.
Public utility: The element of public utility is
fundamental to the legal idea of charity.
Perpetuity: Charitable trusts are generally
permanent in nature because the purpose of charity
can not be achieved completely.
Charity & Charitable objects
Charity is a gift to general public use which
extends to the poor as well as to the rich.
In determining the legal meaning of charity, the
courts are guided by charitable objects such as:
Charitable objects:
The relief of aged and poor people.
Maintenance of sick and maimed soldiers.
The repair of bridges, ports, sea banks and
highways etc.
Contd..
The marriage of poor maids.
Education for orphans.
Aid and help of young tradesmen.
Help of handicraftsmen.
Relief of prisoners or captives.
Commissioner of Income Tax v. Pamsell
(1891) AC 531.
In this case the learned judge Lord Machnaughten
has classified charity into four main categories:
Trusts for the relief of poverty.
Trusts for advancement of education.
Trusts for the advancement of religion.
Trusts for other purposes beneficial to the
community.
Trusts for relief of poverty
The term poor is more or less relative. It does not
mean the very poorest or absolutely destitute.
Mary Clarke v. Anderson (1904) 2 K.B. 645
Absolute poverty means indigence at or below a
certain level depending on the state of society.
Verge v. Somerville (1924) A.C. 496
A bequest for the benefit of the New South Wales
soldiers returned from the 1914-18 war is
considered as a valid charitable trust.
A trust created for the award of scholarships to
poor students with preference for founder’s kin is a
valid charitable trust.
Relief of poverty may be inferred
In some cases, the proposed intention to relieve
poverty may be inferred from the nature of gift. It may
be affected indirectly.
The establishment, maintenance and support of
institutions.
Funds for hospitals and dispensaries.
Funds for providing accommodation for relatives who
come from distance to visit patients critically ill in
hospital.
Funds for homes of rest for nurses.
Trust for advancement of education
Gifts to schools, colleges and other educational
organisations.
Gifts for encouragement of sport, plays, drama
essays, academic awards and chess etc.
Moral and mental development of people is also
included in education.
Gifts for the promotion of games and tournament.
Re-Coxen (1948) WR 334
The gift must satisfy the following conditions:
The purpose must be charitable.
The object must be valid.
It must not be contrary to public policy.
A trust established by a father for the
education of his son is not a charitable trust. It is a
private trust.
Re Hopkins's Will trust, 1965 A.C. 699
In this case a gift for finding the Shakeshpeare
manuscripts has been held to be for a charitable
purpose because the public will take benefit of it
educationally.
Trusts for advancement of religion
The advancement of religion means the promotion of
spiritual teaching in a wide sense and the promotion
of the doctrines on which it rests and manifest it.
Examples:
Gifts for the building of a church.
Gifts to provide or maintain places of worship.
Gift to repair all head stones on the graves in
churchyards of a particular sect.
Maintenance of monuments etc.
Trusts for other purposes beneficial to community
Trust must be for public benefit.
Examples:
Provision for a fire brigade.
Provision for publication of law reports.
Provision for a library.
Provision for prizes for sports are few example of
trusts for purposes beneficial to community.
Any other object of general public utility.
All India Spinners Association v. Commissioner of
Income Tax (1944) 49 C.W.N. 1 (P.C.).
In this case it was held that the object of All India
Spinners Association was to develop the hand
spinning and Khaddar without any participation of
the members in profit. Therefore, it was object of
general public utility.
It was further observed that the provisions for
wage and provisions for poor agriculturists in the
villages especially when they are not engaged in
the agricultural operations are charitable objects.
The Tribune Press v. The Commissioner
of Income Tax AIR 1939 PC 208
In this case Sardar Dayal Singh had created a trust to
maintain the Tribune Press and News paper in an
efficient manner and keeping up the liberal policy of
the Newspaper and placed it on footing of
permanency. The trustees applied for exemption
from Income Tax.
It was held that creating a trust for maintenance of a
newspaper for awakening the public opinion is
charitable in nature and appellants were entitled to
exemption from Income Tax.
