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Issues Involved:
1. Whether the income of the Tribune Trust is liable to be assessed under the provisions of the Indian Income-tax Act. 2. Whether the income of the Tribune Trust is exempt under Section 4(3)(i) of the Indian Income-tax Act. Issue-Wise Detailed Analysis: 1. Liability of the Tribune Trust's Income to be Assessed under the Indian Income-tax Act: The primary issue was whether the income of the Tribune Trust was liable to be assessed under the provisions of the Indian Income-tax Act, 1922. This was initially assessed by the Income-tax Officer, Lahore, who assessed the appellants to tax upon an income of Rs. 61,629 for the year 1932-33. The appellants contended that this income should be exempt under the first clause of Sub-section (3) of Section 4 of the Act, which exempts income derived from property held under trust or other legal obligation wholly for religious or charitable purposes. 2. Exemption under Section 4(3)(i) of the Indian Income-tax Act: The central question was whether the income of the Tribune Trust was exempt from tax under Section 4(3)(i) of the Indian Income-tax Act, which exempts income derived from property held under trust for charitable purposes. The will of Sardar Dayal Singh, the founder of the Tribune Trust, specified that the income from the Tribune Press and Newspaper should be used to maintain and improve the newspaper, keeping up its liberal policy. The appellants argued that this constituted a charitable purpose under the Act, specifically under the category of "advancement of any other object of general public utility." The Commissioner initially opined that running a newspaper might not qualify as an object of general public utility and rejected the appellants' claim. The case was referred to the High Court, where the division bench had differing opinions, leading to a full bench review. The majority of the full bench held that the income was not exempt, with Tek Chand J. dissenting. The case was then appealed to His Majesty, who remitted it to the High Court for further information. The supplementary statement by the Commissioner provided detailed material about the newspaper's liberal policy and its nature and purpose. The Court had to determine whether the trust's objective was indeed of general public utility. The judgment noted that the newspaper was not founded for private profit and was intended to benefit the public by providing an organ of educated public opinion. The Court considered English case law on charitable trusts and political purposes, concluding that the Tribune's purpose was not dominantly political but aimed at general public utility. The judgment emphasized that the test for general public utility should be based on customary law and common opinion within the community. The Court found that the newspaper's activities, as conducted during the founder's lifetime, did not primarily serve a political purpose but aimed to benefit the public by disseminating news and opinions on various matters of public interest. Conclusion: The appeal was allowed, and the second question referred by the Commissioner was answered in the affirmative. The Court held that the income of the Tribune Trust was exempt under Section 4(3)(i) of the Indian Income-tax Act, as it was held for an object of general public utility. The respondent was ordered to pay the appellants' costs of the reference in the High Court and of the appeal.
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