9911796707
TMI Blog1978 (7) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... A. DESAI. JUDGMENT The judgment of the court was delivered by PATHAK J. --This appeal, by certificate under section 261 of the Income-tax Act, 1961, is directed against the judgment of the High Court of Kerala disposing of a reference made to it by the Income-tax Appellate Tribunal under section 256(1) of the Act. The appellant is an association constituted under a licence granted under section 25 of the Companies Act, 1956, on January 5, 1967. The relevant provisions of its memorandum of association are : " 3. (a) The main objects to be pursued by the company on its incorporation are : (i) To give charity (ii) To promote education. (iii) To establish or aid in the establishment of associations, institutions, funds, trusts with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constituted the main object of the appellant and, therefore, the income from the kurie business, even though a profit-making activity, being in aid of or incidental to the main object, was entitled to exemption. The Income-tax Appellate Tribunal, on further appeal, upheld the view taken by the Appellate Assistant Commissioner. At the instance of the Commissioner of Income-tax, the Tribunal referred the following question to the High Court of Kerala for its opinion : " Whether, on the facts and in the circumstances of the case, the assessee is entitled to exemption under section 11 of the Income-tax Act, 1961, for the assessment year 1969-70 ? " The High Court answered the question in the negative and in favour of the income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public utility ". Now, those words are followed by the words " not involving the carrying on of any activity for profit ". Do these restrictive words govern the residual general head only or also the preceding specific heads " relief of the poor, education, and medical relief " ? The specific heads " relief of the poor, education and medical relief " define well-known charitable purposes. But the residual general head " The advancement of any other object of general public utility " is of wide comprehension. This head was defined in the same terms in the definition of " charitable purpose " in section 4(3) of the Indian Income-tax Act, 1922. The same words were used in English law to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any activity for profit " govern the words " the advancement of any other object of general public utility " and not the words " relief of the poor, education and medical relief " in section 2(15). The heads " relief of the poor, education and medical relief " remained unqualified by any express statutory restriction, and income arising from a profit-making activity linked with those heads enjoyed exemption without express limitation until section 13(1)(bb) was inserted in the Act by the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1977. Now, the power to run the kurie business stems from the provision " to run chitties (kuries) " mentioned sub-clause (b) of clause 3 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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