1962 (12) TMI 82 - HC - Income Tax

Summary

Issues:
Interpretation of section 5(a) of the Expenditure-tax Act, 1957 regarding whether educational activities constitute "business, profession, vocation, or occupation."

Analysis:
The judgment pertains to a reference under section 25(1) of the Expenditure-tax Act, 1957, involving an assessment year 1959-60 concerning an individual engaged in educational activities. The key question was whether the educational activities qualified as "business, profession, vocation, or occupation" under section 5(a) of the Act. The Commissioner contended that the activities should be income-driven to fall within the ambit of the provision. However, the court disagreed, emphasizing that an activity need not be profit-oriented to be considered a vocation or occupation. The court highlighted that even activities without an income motive, carried out for social service or benefiting society, could be deemed as vocation or occupation. The judgment referenced a Supreme Court decision to support this interpretation, stating that profit-making was not a prerequisite for an activity to be classified as a vocation. The court clarified that the term "occupation" had a broader scope than "vocation," and an activity could be an occupation without being a vocation. The court concluded that the individual's educational activities constituted an occupation under section 5(a) of the Act, irrespective of the absence of remuneration due to her affluent circumstances.

The court also addressed the distinction between an occupation or vocation and a hobby, noting that the former required more substantial engagement than a leisure pursuit. The judgment rejected the Commissioner's request to reframe the question to include whether the individual actively carried out the activity during the assessment year, as it was not raised before the Tribunal. The court held that the original question framed by the Tribunal was adequate for resolving the dispute. Ultimately, the court ruled that the respondent's educational activities qualified as an occupation under section 5(a) of the Expenditure-tax Act, 1957, and ordered the Commissioner to pay the costs of the reference.