TMI Blog1993 (2) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law and in appeal No. 2152 (Del) of 1989 grounds No. 1 2 similarly raise the same question of law as in the earlier appeal, therefore, these grounds will be taken up jointly. The revenue has argued that the assessee is engaged in business activity and it does not, therefore, qualify as a trust engaged in a charitable activity under section 2(15) of the Income-tax Act, 1961. The learned Departmental Representative has argued vehemently that the assessee association is an organisation primarily created for the promotion and protection of trade and manufacture of vanaspati and allied products. It has been argued that the assessee's predominant purpose is mutual benefit of its members and not for general public. It has been conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in connection with the sale or purchase of oil seeds, oils, vanaspati and allied products ...... It is on the basis of this object that the learned Departmental Representative has vehemently contended that the association was not a charitable institution because its objects were also to carry on business. 4. Learned counsel for the assessee has invited our attention to the decision of the Supreme Court in the case of Addl. CIT v. Surat Art Silk Cloth Mfrs. Association [1980] 121 ITR 1. In that case the objects of the association were also to promote commerce and trade in art silk yarn, raw silk, cotton yarn etc. and also to carry on all or any of the business of art silk yarn, raw silk, cotton yarn, silk cloth, cotton cloth etc. In that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. Our attention has also been invited to the view taken by the Tribunal in respect of the assessment year 1980-81. This Tribunal held that the association was granted registration by the Commissioner of Income-tax under section 12A(a) and so it was entitled to the benefit of section 11. The Assessing Officer following the direction, granted exemption to the association with respect to its income of Rs. 43,941 in the assessment year 1980-81. Copy of the order of the Tribunal has been placed at pages 9 and 11 of the paper-book filed by the assessee before us. Copy of the Assessing Officer's order dated 17-3-1988 has also been placed at pages 12-13 of the paper-book. We find that the registration was given by the Commissioner of Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative has argued before us that sub-section (4A) was inserted in section 11 by the Finance Act, 1983 with effect from 1-4-1984. Sub-section (4A) provides that sub-section (2) shall not apply unless the business is carried on by an institution wholly for charitable purposes and the work in connection with such business is mainly carried on by the beneficiaries of the institution. It is contended by the Revenue that looking to the provision contained in sub-section (4A) it should be inferred that the present assessee is not working wholly for charitable purposes. We have observed earlier that though the objects of the association permit it to carry on business, but these objects are incidental or ancillary to the attainment of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1985-86 are also common and are, therefore, taken up jointly. The learned Departmental Representative has argued that the first appellate authority has wrongly relied upon the earlier years' orders which were not at all relevant. His main plank of argument is that after the insertion of sub-section (4A) in section 11 with effect from 1-4-1984, the institution has to prove that it was carrying on business wholly for charitable purposes. He has, therefore, argued that what sub-section (4A) requires is not that the pre-dominant activity should be of a charitable nature, but that the business should be wholly for charitable purposes and not otherwise. As we have already seen, the primary object of the association is to promote a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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