‘Charitable Purpose’, GPU Category- Post 2008 Amendment – Eligibility for Exemption under Section 11 – Section 2(15) – Part II

INTRODUCTION 4.1    As mentioned in Introduction in Part I of this write-up (BCAJ April, 2023), special provisions dealing with income derived by charitable trusts were present in section 4(3) of the Indian Income-tax Act, 1922 (“1922 Act”). The term “charitable purpose” was defined in the 1922 Act to include relief of the poor, education, medical relief and the advancement of any other object of general public utility. The last limb – ‘advancement of any other object of general public utility’ (“GPU” or “GPU category”) did not contain any conditions which restricted a charitable trust from carrying on business activities. 4.2    As mentioned in Part I of the write up, provisions dealing with charitable trusts were amended from time to time in the Income-tax Act, 1961 (“1961 Act”). As stated in Para 1.3 of Part I, the words ‘not involving the carrying on of any activity for profit’ were added in the GPU category at the time of enactment of the 1961 Act. These words were interpreted by several decisions of the Supreme Court. To reiterate in brief, the Supreme Court in Sole Trustee, Loka Shikshana Trust vs. CIT [1975] 101 ITR 234 (“Loka Shikshana Trust”) held that a GPU category charitable trust should show that its purpose is the advancement of any other object of general public utility and that such purpose does not involve the carrying on of any activity for prof