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TMI Blog1984 (1) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... was right in law in holding that the income of the Association was not exempt from tax either under section II or under section 10(24) or both ? " The Indian Sugar Mills Association is a trade union registered under the Trade Unions Act, 1926 ; any individual, firm or company owning or managing a sugar mill or a factory is eligible for membership of the Association. The objects of the Association have been set out in rule 3 and there are as many as 31 objects. The object clause of the Association came up for consideration before the Supreme Court in the case of CIT v. Indian Sugar Mills Association [1974] 97 ITR 486. In that case, the Supreme Court held that clauses (a), (b), (c), (d), (1) and (n) of rule 3 fell in the category of primar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before this court. There the assessee sought to argue that since the assessee is a registered trade union, it was entitled 'to exemption under s. 10(24), I.T. Act, 1961. Division Bench of this court declined to go into that question because that question had not been raised before the Tribunal or the revenue authorities. The case before us relates to the assessment years 1973-74 and 1975-76, the relevant accounting periods being years ending on December 31, 1972, and December 31, 1974. The assessee, in this case, made an alternative argument before the Tribunal that even if the income was not exempt under s. II, I.T. Act, 1961, the, case of the assessee fell under s. 10(24). It was argued that even if some of the objects were not objects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of two or more Trade Unions". There is a proviso which is not relevant for our present purpose. Section 10, I.T. Act, 1961, provides that in computing the total income of a previous year of any person, any income falling within any of the clauses set out therein shall not be included. Clause (24) is to the following effect: 'any income chargeable under the heads " Interest on securities ", 'Income from house property' and 'Income from other sources' of registered union within the meaning of the Indian Trade Unions Act, 1926 (16 of 1926), formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen." It has been contended before us that the Indian Sugar Mills Associ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s between workmen and employers or between workmen and workmen. It is significant that the associations which are formed for the purpose of regulating the relations between employers and employers or for imposing restrictive conditions on the conduct of any trade or business or federation of two or more trade unions have been excluded from the benefit of s. 10(24). Reading the rules and the regulations, there cannot be any doubt that the Indian Sugar Mills Association is an Association of employers, set up, inter alia, for protection of the interest of its members. The workmen are not entitled to be members of this association at all. Apart from the objects that have been set out earlier in the judgment, there are various other clauses un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; but it cannot be said that the association was formed primarily for those purposes. There is nothing in the rules and the regulations to indicate that those were the primary objects of the association and the other objects set out in rule 3 were incidental or ancillary purposes. In fact, the Supreme Court has categorically held in the case of the assessee that objects in rule 3(a), (b), (c), (d), (1) and (n) are all primary objects of the association. It was sought to be argued by Mr. Murarka that the Tribunal has not found out whether the assessee was actually engaged primarily in regulating the relations between workmen and employers or between workmen and workmen. This argument is misconceived. It is for the assessee to establish fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rroneous or perverse. It was pointed out that the facts found on which the decision of the Tribunal was based had not been challenged in that case. The finding of the Tribunal in the case before us is quite different. The case of the assessee before the Tribunal was that the objects of the association were of general public utility. It was further argued that even if it was assumed that some of the objects were not of general public utility, the association still came within s. 10(24) and the whole of the income was entitled to exemption. The Tribunal has pointed out that one of the objects of the association was promotion and protection of trade interest. The Tribunal has also emphasised that rr. 3(a), (b), (c), (d), (1) and (n) were all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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