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Issues involved: Determination of charitable status and eligibility for exemption under section 11(1)(a) of the Income-tax Act 1961.
Summary: The judgment by the High Court of Allahabad pertains to the assessment of a charitable institution, Banaras Brass Merchant and Manufacturers Association Varanasi, which derives income from donations and the sale and manufacturing of products by its members. The institution was initially a society registered under the Societies Registration Act 1960 before incorporating as a limited company in 1961. The main objects of the institution include fostering friendly relations, promoting trade, commerce, industry, agriculture, and representing the opinions of the mercantile community. The Tribunal found that the activities of the institution were of general public utility and granted exemption under section 11(1)(a) of the Act. It was also noted that the institution's objects did not involve profit-making activities, and any surplus upon dissolution would be transferred to a similar charitable entity. Consequently, the High Court affirmed the charitable status of the institution and ruled in favor of granting exemption under section 11(1)(a) of the Income-tax Act 1961. The Tribunal's questions were answered affirmatively in favor of the assessee, and the reference was disposed of without costs.
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