9911796707
TMI Blog1981 (3) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... ludes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit". The ITO, before whom the claim for exemption was made, denied it on the ground that the question of exemption has been considered by the Madras High Court in the assessee's own case and was decided against it in T.C. No. 101 of 1971. The ITO then observed that on an examination of the position for this year and hearing of the assessee, he found that for this year also the assessee's income was not entitled to exemption. The income assessed eventually was a sum of Rs. 4080, but the question is one of considerable importance in the opinion of the Id. advocate appeari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that each one of them taken individually or collectively satisfied the requirements of law, and, therefore, the exemption should not be denied to the assessee. He also submitted that the Tribunal while rendering its judgment for the year 1974-75 relied largely on the decision of the Supreme Court in the case of Indian Chamber of Commerce vs. CIT, West Bengal II reported in 1975 CTR (SC) 271 : (1975) 101 ITR 796 (SC) wherein the Supreme Court held that since the activities of the Chamber are activities carried on for profit, in the absence of any restriction in its memorandum and articles of association against the making of profit from those activities would not be entitled to exemption u/s II of the Act. The Supreme Court furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not so, the Supreme Court's decision in the case of Surat Art Silk Cloth Manufacturers Association 121 ITR 1 reversing the decision in the case of Indian Chamber of Commerce 101 ITR 796 did not alter the situation at all. On the other hand, the ld. Deptl. Rep. pointed out by comparing the objects before and after the amendment that some of the objects even after amendment continued to suffer from the same vice, which was pointed out by the High Court of Madras in the case reported in 111 ITR 241. That being the case, the property could not be said to be held wholly for charitable purposes within the meaning of s. 2(15) of the Act and consequently not entitled to exemption. If a trust contains some objects which are charitable in nature and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of CIT vs. L.G. Ramamurthy and others 1977 CTR (Mad) 416 : (1967) 110 ITR 453 (Mad). 5. We have carefully gone through the Madras High Court decision reported in 111 ITR 241, the amendments made to the memorandum of association and the other decisions of the Supreme Court relied upon before us. We are clearly of the opinion that the decision of the Tribunal for the asst. yr. 1974-75 is a decision given on a consideration of the effect of the amendments carried out to the objects clause of the memorandum of association tested on the anvil of the requirements of s. 2(15) of the Act and the Madras High Court decision. The reference in the order of the Tribunal to the decision of the Supreme Court reported in 101 ITR 796, since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, which was an activity for profit, and that the reference to the welfare of the public was only mentioned (in passing), but the basic object of the association was to advance their own interest and the service to the public was only incidental. When this is the considered opinion of the Bench after taking into account the amended memorandum of association, and the decision of the High Court in the assessee's own case, we cannot now say that the earlier Bench had not considered the amendments carefully and in proper perspective. 6. We may also add that the amended memorandum of association (clause-c), which came into force from 26th October, 1976, provides: (c) to arrange supply of proper raw materials or quality for preparation of qual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We may also add that the High Court compared the objects of the assessee-association with the objects obtaining the case of CIT vs. Andhra Chamber of Commerce (1965) 55 ITR 722 (SC), which was again approved and followed by the Supreme Court in the case reported in 121 ITR 1. On a comparison, the High Court that "there is no object in the assessee-association which is equivalent to the one in the Chamber of Commerce which is intended to promote the development of trade, commerce and industry in India as a whole. Whilst the chamber of commerce intends to protect general commercial interest of the trading community in India, the object of the assessee-association is to protect the business interests of its members. The Madras Hotels Associa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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