RAMANUJAM J.

At the instance of the assessee, the following two questions have been referred by the Income-tax Appellate Tribunal to this court for its opinion.

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee-trust as originally constituted could not be regarded as a charitable trust entitled to exemption under section 11 of the Act?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that in the absence of any power of revocation or modification except to the limit provided in clause XXX of the concerned trust deed in this case, the trustees have no power to revoke or modify any of the objects of the trust as originally constituted and, therefore, the deed of rectification is not valid or effective ?" *

The assessee, Messrs. Sakthi Charities, was established under a trust deed dated June 25, 1968, declared by the founder and donor, Shri N. Mahalingam, by an initial donation of Rs. 5, 000. According to the terms of the said trust deed, the trust fund and its properties are to consist of such initial donation and all funds and assets, movable and immovable, thereafter to be donated by the trustees, Messrs. Sakthi Sugars Limited and its directors and shareholders and others for the purpose of the trust. The following are the objects set out in the trust deed.

"(a) to promote, aid and advance art, architecture, literature and science, classical, ancient and modern;

(b) to establish centres of learning and research and construct, equip and maintain buildings, equipments, models and machineries for such promotion, advancement and research;

(c) to publish books and periodicals for the propagation of Indian art, architecture and literature, classical and modern;(d) to translate and publish in English and/or other language books, classical and ancient works of Indian culture, art, architecture and literature and propagate the same in and outside India.

(e) to print and publish books, journals and periodicals for the propagation of Indian art, architecture and literature in and outside India

(f) to establish and run schools and colleges for the study of Indian Art, architecture and literature and other languages and literature;

(g) to establish schools and colleges for the study of sciences and humanities ;

(h) to publish books and journals on sciences and scientific researches;

(i) and (j)

(k) to promote the welfare and well-being of the employees of M/s. Sakthi Sugars Ltd., their wives, husbands and children during the tenure of their employment;

(1) to help the destitute wives, husbands and children of the deceased employees of M/s. Sakthi Sugars Limited;

(m) and (n)

(o) to send and finance persons for advanced studies in sugar technology and allied subjects for the better and more efficient carrying on of the industries under the maintenance and management of M/s. Sakthi Sugars Limited." *

The assessee, on September 17, 1968, applied for the grant of a certificate of recognition under s. 80G of the I.T. Act. However, the departmental authorities raised objections to the three clauses 'k', 'l', and 'o' mentioned above and also for clauses 'd' and 'e' providing for application of monies for any charitable purposes outside India. Taking note of these objections raised by the Department, the trustees executed a rectification deed dated January 31, 1969, removing the impugned clauses in the "objects". Thereafter, the Department granted exemption under s. 11 read with s. 80G by an order dated March 4, 1969. However, for the assessment year 1976-77, which was after the deed of rectification, the ITO held that the assessee was not entitled to exemption as a public charitable trust because of clauses 'k', 'l' and 'o' in the original trust deed which are not public charitable purposes and that the subsequent rectification deed was not valid because only the authority conferred under the terms of the trust in clause XX