TMI Blog2007 (2) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the company claimed exemption under clause (26B) of section 10 of the Income-tax Act, (for short "the Act"). The claim was rejected by the assessing authority whereupon appeal was filed before the appellate authority and thereafter also before the Appellate Tribunal. Both the appellate authority as well as the Appellate Tribunal rejected the contention of the APFC holding, inter alia, that the corporation was not established/formed for the purpose of promotion of tribal welfare and as such it is not entitled to exemption. Hence, the present appeal. Clause (26B) of the Act reads as follows: "any income of a corporation established by a Central, State or Provincial Act or of any other body, institution or association (being a body, institution or association wholly financed by Government) where such corporation or other body or institution or association has been established or formed for promoting the interests of the members of the Schedule Castes or the Scheduled Tribes or backward classes or of any two or all of them." In the present cases the APFC has claimed exemption under clause (26B) of the Act and as such it is for the corporation to establish that it is eligible f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our country. In so far as the income of the assessee from the main object No. I, is severable from the income accruing to it from other main objects, we see no legal infirmity in taking the view that the assessee's income attributable to the housing schemes undertaken for promoting the interests of the members of the Scheduled Castes will be entitled to exemption under clause (26B). The matter may be looked at from the angle of constitutional law as well. Article 47 of the Constitution of India mandates, inter alia, that the State shall regard the raising of the standard of living of its people and improvement of public health as its primary duty. Article 46 of the Constitution enjoins upon the State to promote with special care the educational and economic interests of the Scheduled Castes and Scheduled Tribes in particular and to protect them from social injustice and all forms of exploitation. These two articles put together, cast a duty on the State to protect the members of the Scheduled Castes and the Scheduled Tribes and raise their standard of living. Exemption under clause (26B) is in furtherance of these articles. It need hardly be mentioned that the Constitution is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting on the recommendation of the said Committee, the APFC was formed as, a wholly owned Government company with the avowed object to establish and to promote the forest resources. The seven main objects as prescribed in the memorandum of association reads as follows: "1. To provide the necessary infrastructure to harvest and develop forest resources, to promote forest resource based industries, to arrange marketing of timber and other forest resource within the country and abroad. 2. To plant, grow, cultivate, produce, and raise plantations of various forest species of proven utility and other agricultural, plantation and horticultural crops, medicinal and aromatic plants and to buy, sell, export, import, process, distribute or otherwise deal with all kinds of forest crops, natural products, agricultural, plantation and horticultural crops, medicinal and aromatic plants. 3. To develop land, to maintain, conserve, protect, preserve, tend, exploit and to manage in all respects, crops and trees raised or come up naturally and forests and land of all description and to arm all officers including the managing director and staff of the company with powers similar to those of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce and the APFC came into existence on the recommendation of the Parliamentary Committee on Scheduled Castes/Scheduled Tribes. It is, therefore, submitted that even in the absence of any specific words in the objects that it is for the purpose of promoting the interests of the Scheduled Tribes, the fact remains that the corporation was established to promote the development of the local population and admittedly the tribal population constitutes the bulk of the entire population. It is also submitted that considering the poor financial condition of the local tribal population, the corporation organised the local people to form societies to develop the land and engage them in cultivation of tea and other cash crops. The entire finance, manpower and technical activities were provided by the corporation and the above activities of the corporation led to the development of tea production in the State. On consideration of the background under which the corporation came into being and taking into account the provisions under articles 46 and 47 of the Constitution, we are of the view that the APFC was primarily formed to ameliorate the suffering of the tribal population of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
