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TMI Blog1989 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Act. The objects of the society, as enumerated in the memorandum of association, are : " (i) To promote the welfare of its members and foster and encourage the exchange of information relating to the industry. (ii) To formulate constructive policies and sound business principles so that members may render satisfactory and economical service to the public. (iii) To seek to remove obstacles to the healthy progress of the industry by making collective representation of grievances to the Central and State Governments and to put up suggestions and request to the bodies concerned in the matter of imports, exports, excise duties, taxes, development of the industry, etc. (iv) To promote and organize scientific research calculated to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the appellant, the society was formed by all the members of the society. All the benefit of the income of the society is directly or indirectly applied to the welfare of the members. Therefore, I feel, Sec. 13(1)(c) squarely applies to the case of the appellant. Benefits of Sec. 11 12 can be given only to those trusts which are formed for the benefit of some other persons and not the authors of the trust themselves. Charity is something which is for others and not for himself/themselves. I think, this is the spirit of sec. 13(1)(b). If somebody forms society for the benefit of their own business, there does not appear to be any charitable purpose in that. In these circumstances I uphold the order of the Income-tax Officer that Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general public utility. The normal meaning of "charitable purpose" is one which provides relief to poor, education or medical relief. But the scope is enlarged in sec. 2(15) which is an inclusive definition. So, the whole question is whether the assessee is an association the object of which is one of general public utility. 9. The decision in the case of CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722(SC) was considered in the case of Surat Art Silk Mfrs. Association. The Andhra Chamber of Commerce was an association formed for the welfare of the industrial community only. Dealing with this, their Lordships (page 12) pointed out : ". . . The court held that the dominant or primary object of the Andhra Chamber of Commerce was to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would not by itself prevent the association or institution from being a charity. " In the instant case, a class of persons engaged in the industry of manufacturing flat tape or its end-products is entitled to become members and the objects of the association are to promote the business welfare of such members. Having regard to the objects of the association (assessee), it would not be correct to say that any of its member has so much of personal benefit to say that the purpose is non-charitable. Examined in the light of the observations of the Supreme Court extracted above the objects of the assessee would have to be treated as one of general public utility to fall within the meaning of sec. 2(15). Perhaps it would not have been regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application or use of the income or property alone that attracts the provision. It is one thing to say that the activities of the association had resulted in benefit to the members who are manufacturing flat tape or its end products. It is quite another thing to say that the income of the assessee is used or applied for the benefit of the members. It is the latter case alone that can attract the provisions of section 13(1)(c)(ii). 12. In the instant case, the facts are too clear. The entire income remains intact. After defraying the expenses for earning the income, the net income, respectively, was Rs. 16,737 and Rs. 5,078 for the two years under consideration. This had not been used by the assessee for any purpose, let alone for the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X
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