Meaning of “Any other object of general public utility”

The meaning of any other object of general public utility under section 2(15) of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of meaning of any other object of general public utility.

Meaning of any other object of general public utility defined by court

The phrase ‘any other object of general public utility’ used in section 2(15) of the Income Tax Act came up before hon’ble Allahabad high court in CIT v. State Urban Development Agency (SUDA) [2013] 37 taxmann.Com 193/218 taxman 146 (all.) and it explained.

Meaning : The expression ‘any other object of general public utility’ in section 2(15) is of the widest connotation. That expression would prima facie include all objects which promote the welfare of the general public. It cannot be said that a purpose would cease to be charitable even if public welfare is intended to be served. If the primary purpose and the pre-dominant object are to promote the welfare of the general public, the purpose would be a charitable purpose. The words ‘charitable purposes’ defined in section 2(15) include the advancement of any other object of general public utility.

Prior to 1-4-1984, the words used in the section were ‘advancement of any other object of general public utility not involving the carrying on of any activity of profit’. The finance act, 1983 omitted the words ‘not involving the carrying on of any activity for profit’ from the section with effect from 1-4-1984. Thus, after 1-4-1984, even if there is some profit in the activity carried on by the trust/institution, so long as the dominant object is of general public utility, it cannot be said that the trust/institution is not established for charitable purposes.

Section 2(15) of Income Tax Act

2(15) “charitable purpose” includes relief of the poor, education, yoga, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility:

Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless—

(i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and

(ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year;

In this article, you can get guidance from high courts on the meaning of any other object of general public utility under section 2(15) of the Income Tax Act.

Updated up to Finance Act 2021