JUDGMENT

RAY. C. J.:— These appeals by special leave are from the judgment dated 26 May, 1970 of the High Court of Delhi.

2. The question referred to the High Court under Section 66 (1) of the Income-tax Act, 1922 referred to as the Act was as follows:-

"Whether on the facts and in the circumstances of the case the income of the trust which was spent on the religious and charitable purposes within the taxable territories was exempt under Section 4 (3) (i) of the Indian Income Tax Act, 1922."

3. The main judgment was delivered in Income Tax Reference no. 40 of 1965.

4. The High Court answered the question in the negative.

5. The trust in Income Tax Reference No. 40 of 1965 was taken as typical of all the cases. The deed of trust dated 12 April, 1948 was made by Ramkrishna Dalmia. The trust was called "Jaipur Charitable Trust". In Jaipur Charitable Trust Rs. 10,000 was given on trust on the terms and conditions set out in the deed.

6. The objects of the trust in clause 5 (a) are, inter alia, as follows:

(i) To open, found, construct, establish, take over, equip, promote, conduct, maintain, support, subsidise, grant aids and make donations to schools, colleges, Pathshalas, boarding houses, r