Section 13(8) of the Income Tax Act

Depreciation is allowable on assets for which the cost has been fully allowed as an application of income under Section 11 in previous years, when computing the income of a charitable trust. Charitable trusts are also entitled to carry forward their deficit.

A charitable institution, whose predominant object is general public utility, can engage in non-charitable activities yielding incidental profits, provided these profits are deployed to achieve the dominant charitable object. A subsidiary object, if ancillary to the primary charitable purpose, does not negate the institution's charitable character.

If activities for the advancement of general public utility are carried on as a business, income from such activities is not exempt under Section 11, even if the profits are utilized for the main charitable object. The argument that profits from general public utility activities can be ploughed back to charity to maintain exemption is not a good law.

Activities carried out by governmental or quasi-governmental bodies like urban development authorities or industrial development corporations for the advancement of general public utility are not considered to be in the nature of trade, commerce, or business, even if fees or cess are collected. Therefore, the proviso to Section 2(15) of the Income-tax Act, 1961 is not attracted, and such bodies are eligible for exemption under Sections 11 and 12.

A charitable institution registered under section 12A is entitled to claim depreciation on fixed assets, even if the expenditure incurred for acquiring such assets has already been treated as an application of income for exemption purposes.

An institution engaged in the advancement of general public utility retains its charitable character and eligibility for exemptions under Section 11 or approval under Section 10(23C)(iv) provided profit is not its predominant motive, even if it generates incidental surpluses or collects fees.

Development authorities can continue to be regarded as existing for a 'Charitable Purpose' under Section 2(15) of the Income Tax Act, even after the introduction of the proviso to that section. The contention that such authorities automatically lose their charitable status due to the proviso is incorrect.

A statutory corporation undertaking activities that generate income qualifies as a charitable entity under Section 2(15) if its dominant object is general public utility and it is legally obligated to apply its income solely for that purpose, even if the activities appear to be in the nature of trade or business. Such an entity is entitled to registration under Section 12A and exemptions under Section 11.

The legal form or ostensible autonomy of an entity does not prevent it from being classified as 'State' or 'authority' under Article 12 if it functions as an instrumentality of the Government, thereby attracting constitutional accountability under Part III.

An object beneficial to a section of the public, as distinguished from an individual or group of individuals, qualifies as an object of general public utility under Section 2(15) and hence a charitable purpose. This applies even if the benefits are restricted to a specific caste, community, or professional group.