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Issues Involved:
1. Whether the Cricket Association of Bengal was entitled to tax exemption under sections 4(3)(i) and 4(3)(ia) of the Indian Income-tax Act, 1922, for the assessment years 1950-51 and 1951-52. 2. Whether the Cricket Association of Bengal was entitled to tax exemption under section 4(3)(i) of the Indian Income-tax Act, 1922, as amended in 1953, for the assessment year 1952-53. Detailed Analysis: Issue 1: Tax Exemption for Assessment Years 1950-51 and 1951-52 Legal Provisions: - Section 4(3)(i) exempts "any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes." - Section 4(3)(ia) exempts "any income derived from business carried on behalf of a religious or charitable institution when the income is applied solely to the purposes of the institution." Key Findings: 1. Property and Legal Obligation: - The Cricket Association of Bengal (CAB) is an unregistered and unincorporated body without a trust deed or document vesting property for its activities. - The Tribunal found that the income in question was derived from organising cricket matches and charging admission fees, not from property held under any trust or legal obligation. 2. Charitable Purpose: - The Income-tax Officer and the Appellate Assistant Commissioner concluded that promoting cricket is not a charitable object. - The Tribunal upheld this view, noting that the activities of CAB could take directions other than charitable purposes. 3. Application of Income: - The rules of CAB do not specify how the income should be applied, and there is no evidence that the income was used solely for charitable purposes. Conclusion: - The Tribunal was correct in holding that CAB was not entitled to the exemption under sections 4(3)(i) and 4(3)(ia) for the assessment years 1950-51 and 1951-52. The promotion of cricket, as conducted by CAB, does not qualify as a charitable purpose, and the income was not derived from property held under a legal obligation for such purposes. Issue 2: Tax Exemption for Assessment Year 1952-53 Legal Provision: - Section 4(3)(i) as amended in 1953 requires that income must be derived from property held under trust or other legal obligation wholly for charitable purposes and applied or accumulated for such purposes. Key Findings: 1. Application and Accumulation of Income: - The amended section adds the requirement that the income must be applied or accumulated for charitable purposes. - There is no evidence on record regarding the application or accumulation of the income by CAB for charitable purposes. 2. Property and Legal Obligation: - Similar to the earlier years, there is no property held under trust or legal obligation by CAB. Conclusion: - The Tribunal was right in holding that CAB was not entitled to the exemption under the amended section 4(3)(i) for the assessment year 1952-53. The lack of evidence on the application or accumulation of income for charitable purposes further weakens CAB's claim. Final Judgment: - The answers to the questions referred were: - Question (1): Yes. - Question (2): Yes. - The Commissioner of Income-tax was awarded costs of the reference. Separate Judgments: - Both judges, Chakravartti, CJ, and Guha, J., concurred in the judgment, with Guha, J. explicitly agreeing with the analysis and conclusions.
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