JUDGMENT

KULDIP SINGH, J.:- The question for our consideration in these appeals is whether Gangabai Charities, a trust operating in the city of Madras, is entitled to exemption under Section 11(1)(a) of the Income-tax Act, 1961 (the Act).

2. Gangabai executed a document dated September 13, 1958 which was described as a deed of trust. The trust was named as "Ganga Bai Charities". In the trust-deed Ganga Bai gave effect to her desire to construct and provide a building for the benefit of the public to be used for religious, charitable, cultural and social purposes. She contributed Rupees 34,000/- to the trust fund. With that fund a plot of land was purchased and the construction began. The fund was augmented by her son Seetha Rama Rao from his own contributions as well as from outside donations. The building was completed at the cost of about Rs. six lakhs. Ever since the construction of the building it is being let out as a marriage mandapam to be used by the members of the public as such. The income derived from letting out the Kalyana Mandapam came to Rupees 1,06,392.00 in the year ending March 31, 1963. For the subsequent years also the income was substantial. The trust was also running a printing press and sizable income was being earned from the press.

3. The income-tax officer took the view that the income earned by the trust was taxable. The contention of the trust that the income derived from the property was being held wholly for religious and charitable purposes and as such was exempt under S. 11 of the Act, was rejected. On appeal the Appellate Assistant Commissioner reversed the order of the income-tax officer and held that the Ganga Bai Charities was a charitable trust and its income was entitled to exemption under S. 11 of the Act. On further appeal by the department, the tribunal upheld the decision of the Commissioner but remitted the assessment to the income-tax officer to find out as to what extent in each year the trust income or accumulations were expended for charitable purposes. The Income-tax Appellate Tribunal referred the following question to the High Court under S. 256(1) of the Act:-

"Whether it has been rightly held that the income of the trust would be entitled to exemption under S. 11 of the Income-tax Act, 1961?"

The High Court by its judgment dated December 17, 1980 answered the question in the negative and against the assessee. These appeals by way of special leave are against the judgment of the High Court.

4. Section 11(1)(a) of the Act, to the relevant extent, is reproduced here under:-

11. Income from property held for charitable or religious purposes-(1) Subject to the provisions of Ss. 60 to 63, 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 is applied to such purposes in India.........

The above quoted provisions make it clear that a Trust has to satisfy the following conditions in order to claim benefit of S.11 (1)(a) of the Act: -

(1) The income is derived from property held under the trust.

(2) The trust is wholly for charitable or religious purposes.

(3) The exemption is permissible to the extent to which such income is applied to such purposes in India.

5. The appellant-trust has been created under a deed of trust dated May 30, 1978 and as such we have to look into the contents of the trust to find out as to whether the conditions precedent for claiming exemption under Section 11 (1)(a) of the Act are satisfied. The Tribunal and the High Court have also based their conclusions on the interpretation of the trust deed.

6. It is not disputed that the appellant trust derived the income from the property held under it but the existence of other conditions necessary to claim exemption under S. 11 (1)(a) of the Act have been seriously disputed by the Revenue before us. We have minutely examined the t