9911796707
TMI Blog1978 (12) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... g) to secure the repeal of any legislation or prevent the passing of legislation which is damaging or may in any way damage the trade ; (h) to collect, classify and circulate statistics ; (i) to adopt common forms of agreements ; (j) to establish funds for the purposes of the members and/or for the benefit of employees of the members ; (k) to assist or amalgamate with other associations or societies or federations of associations or societies, having for the objects or one of their objects the promotion of the interests of the jute trade ; (l) to do all such other lawful things as are incidental or conducive to the attainment of the above objects or any of them. In the assessment year 1962-63, the relevant accounting periods being the year ending on the 31st December, 1961, in respect of its general fund and the year ending on the 30th June, 1961, in respect of its operating fund, the assessee filed a return showing a loss of Rs. 4,909. The assessee claimed that as a mutual association its income could not be charged to tax. The source of the income of the general fund being only the subscription of members the ITO accepted such claim of the assessee and did not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contended on behalf of the assessee on the other hand that the main purpose of the assessee was the promotion of good relationship between its members and their employees and the clauses in its rules to the contrary were merely incidental or additional. The Tribunal noted that the assessee was an association formed by the employers but construing the object cl. (iii) held that the assessee was an association formed primarily for the purpose of regulating relations between the employers and their workmen. The Tribunal found further that the assessee was administering a welfare fund utilised only for the benefit of the workers. This constituted an activity for the promotion of good relationship between employers and their workmen. The Tribunal confirmed the decision of the AAC and the appeals of the revenue were dismissed. On an application of the CIT, West Bengal-V, under s. 256(1) of the I.T. Act, 1961, the Tribunal has drawn up a statement of case and has referred to this court for its opinion the following question of law arising from its order : " Whether, on the facts and in the circumstances of the case and having regard to the rules and regulations, the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts that the trust property was not held wholly for the religious or charitable purposes within the meaning of the section and that the assessee was not entitled to claim deduction under s. 15B of the Indian I.T. Act, 1922, in respect of donations made to the trust. (b) CIT V. Indian Sugar Mills Association [1974] 97 ITR 486 (SC). The question here was also whether the income derived by the Sugar Mills Association, the assessee, from its sugar export division was exempt under s. 4(3)(i) of the Indian I.T. Act, 1922. Construing the objects of the assessee as specified in its rules and regulations, the Supreme Court held that several objects constituted the primary purpose of the association and were incidental to one another. Some of the objects were not for charitable purpose within the meaning of the Act. At least one rule permitted distribution of profits among the members under certain conditions and introduced an element of private gain which was inconsistent with public utility. It was held that the income of the association from its business in sugar was not exempt as being wholly for charitable purposes. (c) Dharmaposhanam Co. v. CIT [1978] 114 ITR 463 (SC). The fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of regulating the relations between employers and the workmen. The Tribunal has also found that the assessee was administering a welfare fund utilised only for the benefit of the workers. Dr. Pal urged that in order to claim exemption under s. 10(24) of the Act only two conditions need be satisfied, namely, the assessee must be registered under the Indian Trade Unions Act, 1926, and it should be formed primarily for the purposes of regulating the relation between workmen and employers or between workmen and workmen. It was an admitted position that the assessee was registered as a trade union and as such the first condition was satisfied. It was also found that the assessee had been formed primarily for the purpose of regulating relations between workmen and employers. Section 10(24) did not lay down that an association must be formed wholly and exclusively for the purposes referred to in the said section so as to be entitled to the benefit of the exemption thereunder. The first object in the rules of the assesee was the regulation of relation between the employers and the employees. The other objects set out in the rules must be construed to be additional or i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
