9911796707
TMI Blog1970 (10) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... taxation under section 11 of the Income-tax Act, 1961, for the assessment years 1962-63, 1963-64 and 1964-65 ?" The assesse is the Indian Chamber of Commerce, Cochin registered under 23(1) of the Cochin Companies Act, 1120. The objects of the association are seen from its memorandum of association which are extracted in the order of the Tribunal as well as in the statement of the case. We may refer to a few of these objects as seen from the memorandum as they are relied on by counsel on behalf of the revenue. They are clauses (a), (b), (c), (h), and (i) which read as follows: "(a) To promote and protect the trade, commerce and manufacture of India, or any part thereof, and in particular of the Cochin State. (b) To watch over and prot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) of the Act. The income-tax Officer held that in any view of the matter the assesssee is not entitled to the exemption of the entire income as section 11(2) has not been satisfied. The assessee appealed unsuccessfully. But the Tribunal in further appeal held that the purpose for which the association informed is a "charitable purpose" within the meaning of that expression in section 2(15) of the Act and allowed the exemption permissible under section 11(1)(a) of the Act The Tribunal did not find specifically about the quantum of the exemption to which the assessee is entitled. We are by the question referred to us called upon only to answer the general question as to whether the income can be said to be derived from property held on trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, objects that have been the subject matter of scrutiny in Commissioner of Income-tax v. Andhra Chamber of Commerce, wherein it was held that those objects are objects of general public utility and therefore falling within the last part of the definition in section 4(3)(i) of the Indian Income-tax Act, 1922. Going through the memorandum of association of the assessee, therefore, we have no doubt whatever that the association is one for a charitable purpose. This leads us to the second line of contention raised by counsel that even so it will not be a "charitable purpose" as the activity of issuing certificates for weighment and survey involves an activity for profit. Counsel submits that if in achieving the charitable purpose some activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the activity must be for profit and that activity for profit must be involved in the objects of general public utility. This last element we are unable to find in this case. This question as such has not arisen in any of the numerous decisions that have been cited before us. Since even in relation to the business activity a trust can be created, the question in these cases was only whether the activity was for private profit or whether the activity was in furtherance of the objects of the trust. We venture to think that even when an activity is in furtherance of the objects of a trust and even if such activity results in profits, the definition will not be attracted unless the objects involve carrying on an activity for profit. The objec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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