S.J. VAZIFDAR, J.

After we reserved judgment in ITA No.62 of 2015, Mrs. Radhika Suri, the learned senior counsel requested us to hear ITA No.147 of 2016 stating that similar questions arise therein. We acceded to the request and decided to dispose of the appeals by a common judgment for two reasons. Firstly, the provisions of the Income Tax Act, 1961, that fall for consideration and the judgments relied upon by the assesses in both the appeals are the same. Secondly, the contrasting facts in both appeals, which have led to different results, illustrate the working of the provisions of the Act.

2. We will first deal with ITA No. 62 of 2015 which was heard first.

3. This is an appeal against the order of the Income Tax Appellate Tribunal dated 26.11.2014 setting aside the order of the Commissioner of Income Tax (Appeals) and restoring that of the Assessing Officer. The matter pertains to the Assessment Year 2009-10.

4. According to the appellant, the following substantial questions of law arise in this case:-

“(i) Whether in fact and circumstances of the case the purpose/objects of the appellant are charitable in nature despite the 2008 Amendment particularly when there is no change in the functions/nature of operation of the Trust?

(ii) Whether the reliance placed by the Ld Tribunal on the judgment in the case of Sole Trustee Loka Shikshana Trust v/s CIT (1975) 101 ITR 234 is good in law?

(iii) Whether in fact and circumstances of the case the respondents could dispute the nature of the appellant trust despite the same having been settled by the Privy Council and the exemptions granted by the CBDT continuously since 1984-85 till date?

(iv) Whether in fact and circumstances of the case, the action of the authorities below, the impugned orders Annexure A-5 and A-7 are legally sustainable in the eyes of law?”

These questions of law are of considerable general importance. The answer to these questions would affect the working of trusts in general and the effect therefore goes beyond the trusts and the assesses concerned in a given case. They call for the interpretation of section 2(15) which requires a comparison of the section as it stood from time to time and the judgments of the Supreme Court at the relevant time. It also requires a consideration as to whether the judgments apply to the amended provision and if so to what effect. The appeal is accordingly admitted. The issue, however, really is one and the questions are, therefore, dealt with together.

5. This appeal essentially involves the interpretation of section 2(15) of the Act and, in particular, the proviso thereto. It will, however, be necessary to set out the section as it was amended from time to time for the nature of the amendment has a bearing upon the interpretation of the section as it stood at the relevant time. The corresponding provision in the Income Tax Act, 1922, was section 4(3).

Section 4(3) of the 1922 Act in so far as it is relevant and the corresponding section 2(15) of the 1961 Act, as amended from time to time, read as under:-

(A) Section 4(3) of the 1922 Act.-

“4. Application of Act.—

…… ….. ….. …… …… …… …….

(3) This Act shall not apply to the following classes of income:-

(i) Any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, and in the case of property so held in part only for such purposes, the income applied or finally set apart for application thereto.

(ii) to (viii) ………………………………………”

In this sub-section “charitable purposes” includes relief of the poor, education, medical relief and the advancement of any other object of general public utility.”

(B) Section 2(15) of the 1961 Act

(i) “(15) “Charitable purpose” includes relief of the poor, education, medical relief and the advancement of any other object of general public utility not involving the carrying on of any activity for profit.”

From 1984 to 2009

(ii) “(15) “charitable purpose” includes relief of the poor, education, medical relie