TMI Blog2010 (2) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... to facilitate the voluntary formation and democratic functioning of co-operative as people's institutions based on self-help and mutual aid and enable them to promote their economic and social betterment within autonomy incidental thereto. (3) Thus, as said above appellant is busy in social and charitable activities moreover members of the board of directors are also busy to conduct and fulfil the abovesaid social work in different States. (4) That, therefore till the members' governing body/board of directors do not get together and resolve to make appeal against impugned order and pass the resolution of the same and authorized somebody to look after this case, it cannot be decided by anyone member. Hence the filing of appeal been delayed and falls under the Limitation Act. (5) That, due to the above circumstances, the delay caused in filing this appeal is as appellant is busy in social work, which is neither intentional nor by negligence. (6) That the appeal is under merit and for the sake of brevity balances are being part and parcel to the appeal. Thus if the appeal is not admitted only on the ground of limitation the merit of the appeal (sic-appellant) will suffer irr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and executing through labour co-operatives, to improve the financial position of National Federation and to provide the regular work to member labour co-operatives round the year. (iv) To assist in marketing, import or export and carry on agency business or every kind to produce, store and distribute material required or manufactured by the member societies and/or their affiliated units. Share capital: (1) Share certificate-Every society admitted as member shall be entitled to receive a share certificate gratis stating the number of shares and their distinctive numbers. The share certificates shall be signed by the chairman, or any director duly authorized and the managing director. The share certificate shall bear the seal of National Federation. (3) Lien or shares, dividends and deposits- The National Federation shall have the first and paramount lien or charge upon all the shares, dividends and deposits of any member or past member for all moneys due from him to the society from time to time. The society may at any time set off any sum credited by or payable to the member or past member towards payment of any liability of such member as past member. 14(f) Power an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducation and training of members, directors and employees as approved by the board of directors; (d) Donation for the development of the co-operative movement or charitable' purpose as defined is s. 2 of the Charitable Endowment Act, 1980 not exceeding 5 per cent; (e) Payment of ex gratia amount to employees as approved by the board of directors; (f) The remaining undisbursed profit shall be added to reserve fund." Having examined the material on record, it is evident that the object and the application of the utilization of the receipts of the assessee are not in consonance with the scope and object defined under the provisions of s. 2(15) of the Act for which the assessee is neither covered in the residuary clause namely 'Object of general public utility'. Sec. 2(15) of the Act is extracted herein: "2(15) 'Charitable purpose' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 139 CTR (SC) 455 : (1997) 225 ITR 235 (SC) and the relevant observations of their Lordships from the said decision describing this position of law are as under: "Shri Harish N. Salve, learned senior counsel appearing for the assessee, has urged that the nature of the activities of the assessee have to be considered as a whole. The submission is that since the objects of the assessee have been found to be of general public utility and that no dividend has been declared by the assessee, it should be held that the income derived by the assessee is from properties held for charitable purposes. Learned counsel has placed reliance on the letters of the Central Government objecting to the giving of presents by the assessee to its members and also on the decision of this Court in CIT vs. Andhra Pradesh State Road Transport Corporation (1986) 52 CTR (SC) 75 : (1986) 2 SCC 391. Shri Salve has also submitted that the earlier decision of this Court in Delhi Stock Exchange Association Ltd. vs. CIT (1961) 41 ITR 495 (SC) case related to the period prior to 1956 and that thereafter the Securities Contracts (Regulation) Act, 1956, has been enacted and the assessee has been recognised as a stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation Ltd. The object for which the assessee was established was general, that of conducting a stock exchange and that to promote and recall the business in stocks, shares, debentures and other securities to frame the rules and bye-laws for regulating the conditions subject to which business in stock exchange could be transacted and the like. The assessee derived income by way of membership fee, rent from property and interest on security. The claim of the assessee for exemption under s. 11 was rejected by the AO. After considering the memorandum and articles of association of the assessee, it was found by Hon'ble Supreme Court that the surplus of the assessee could be distributed between the shareholders or employees or even their relations. The Tribunal was of the view that aims and objects of the trust must have to be determined by the reference to the manner in which surplus derived from the activity could be disposed of and the absence of any prohibition from dividend to the shareholders and specific provisions for creating funds for the benefit of shareholders, employees or their relations clearly showed that the surplus on the activity carried on by the assessee was defini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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