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Issues Involved:
1. Whether the income of the Tribune Trust is liable to be assessed in the hands of the Trustees under the provisions of the Income-tax Act. 2. Whether the income of the Tribune Trust is exempt under Section 4(3)(i) of the Indian Income-tax Act, 1922. Issue-wise Detailed Analysis: 1. Liability of Income Assessment: The primary issue addressed was whether the income of the Tribune Trust is subject to assessment under the Indian Income-tax Act. The judgment noted that the Income-tax Officer assessed the appellants for the year 1932-33, and no dispute arose regarding the amount or computation of the tax. The sole contention was whether the income is exempt under Section 4(3)(i) of the Act. 2. Exemption Under Section 4(3)(i): The core of the judgment revolved around interpreting whether the income derived from the Tribune Trust falls under the exemption clause of Section 4(3)(i) of the Indian Income-tax Act, 1922. This section exempts income derived from property held under trust or other legal obligation wholly for religious or charitable purposes. The term "charitable purpose" includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility. The trust was established by Sardar Dayal Singh's will, which directed that the Tribune Press and Newspaper be maintained efficiently, with surplus income used for its improvement and permanency. The appellants claimed exemption on the grounds that the trust's objective was of general public utility. The High Court's Full Bench had a divided opinion on this matter. Jai Lal, J. held that the income was exempt, while Skemp, J. disagreed. The Full Bench majority, consisting of Young, C.J., and Addison, J., ruled against the exemption, with Tek Chand, J. dissenting. Upon appeal, the Privy Council examined the nature and purpose of the trust. The judgment highlighted that the trust was not established for private profit and was intended to benefit the public by providing an English newspaper that disseminated news and opinions on matters of public interest. The judgment noted that the political character of the newspaper did not disqualify it from being considered of general public utility, as long as the dominant purpose was not political propaganda. The judgment referenced several English cases to elucidate the principles governing charitable trusts and public utility. It concluded that the Tribune's objective was to supply the province with an organ of educated public opinion, which is an object of general public utility. The judgment distinguished this case from others where political purposes were dominant. The Privy Council determined that the trust's purpose aligned more closely with cases where the charitable intent was upheld despite some political elements. Consequently, they held that the income of the Tribune Trust was exempt under Section 4(3)(i) of the Indian Income-tax Act, 1922. Conclusion: The appeal was allowed, and the second question referred by the Commissioner was answered affirmatively. The respondent was ordered to pay the appellant's costs for the reference in the High Court and the appeal. The judgment emphasized the importance of applying correct legal principles to determine the character of a trust and its eligibility for tax exemption based on the purpose of general public utility.
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