TMI Blog1975 (4) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ees. (3) To advance, encourage and promote commercial and other technical education and also to establish and maintain such institutions for instructing and training persons connected with manufacture, trade and commerce of its members. (4) To promote and protect the interest of textile industries and other trades, commerce and manufactures of South India in general and of the cotton trade in particular. (5) To provide an exchange or mart with library and reading rooms and other accommodation for the comfort of the members who are engaged in questions connected with trade, commerce and manufactures and promote the diffusion of knowledge among its members. (6) To collect, supply, distribute and circulate literature, statistics, tables and, such other data and to circulate and supply such information as useful for the trade, commerce and manufactures of its members and their employees. (7) To take all steps which may be necessary for promoting, protecting, supporting, encouraging or opposing legislative and other measures affecting the interests of its members. (8) To make representations to Municipal, State, Central or other authorities on any matters connected wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agements of any one or more of the Associations, institutions, societies or companies with which this Association is authorised to amalgamate. (18) To transfer all or any part of the property, assets, liabilities and engagements of this Association to any one or more of the Associations, institutions, societies or companies with which this Association is authorised to amalgamate. (19) And generally to do all such other lawful things as are incidental or conducive or may be necessary in the interests of the Association or of the above objects of the Association directly or indirectly." The members of the Association are drawn from all the four States of South India, viz., Andhra Pradesh, Karnataka, Kerala and Tamil Nadu. Any individual, firm or company owning one or more mills in these States is eligible to become a member of the Association. The word "Mills" means textiles and natural and/or artificial fibre manufacturing or processing mills and shall include cotton, silk, woollen or other natural or artificial fibre processing or manufacturing mills. There is a form of application prescribed by the Association and the committee could accept or reject such application with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. The assessee appealed to the Appellate Assistant Commissioner and reiterated its claim under section 4(3)(i) of the Act on the strength of the decision in Commissioner of Income-tax v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC). The Appellate Assistant Commissioner upheld the assessment and in addition enhanced it by bringing to tax a sum of Rs. 75,471 received as subscription and entrance fees and also withdrawing the allowance of Rs. 8,434 as expenses on the ground that it had been deducted twice. The assessee then appealed to the Appellate Tribunal. The point in issue was whether the property of the assessee was held for charitable purposes. The Tribunal examined this claim in the light of the objects clause. It considered certain objects as primary and certain others as incidental, the primary objects being those set out in clauses (4), (6), (8) and (11) of the objects clause already extracted, the rest of the clauses being treated as incidental. Before the Tribunal the assessee placed certain materials to show that the assessee's activities led to economic prosperity enuring for the benefit of the entire community. It was pointed out for the assessee that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were worked and how they disclosed a public charitable purpose. He tried to show that the decision of the Supreme Court in Commissioner of Income-tax v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC) had no application to the facts herein. We have very carefully considered the submissions; but we are unable to agree with the counsel. The Tribunal's decision is based on the decision of the Supreme Court in Commissioner of Income-tax v. Andhra Chamber of Commerce [1965] 55 ITR 722 (SC). The primary objects of the Andhra Chamber of Commerce, which was a company incorporated under section 26 of the Indian Companies Act of 1913 was to promote and protect trade, commerce and industries, to aid, stimulate and promote the development of trade, commerce and industries, and to watch over and protect the general commercial interests of India or any part thereof. The chamber was particularly concerned with the promotion and protection of trading in the Andhra country. There were other objects, which were found to be incidental to the principal objects. The chamber derived income from letting out a property it had acquired and claimed exemption under section 4(3)(i) of the Indian Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmerce and manufactures of the members. The idea appears to be not to sponsor any individual representations, but to bring to the notice of the authorities the conditions relating to the trade or manufactures represented by this Association. Clause (9) provides for settlement of disputes generally and not merely relating to the members. The settlement of a dispute in a healthy manner is such as to subserve public good. Similarly, clause (11) contemplates action being taken so as to be conducive to the extension of manufacture, trade and commerce of the members. Here also we do not understand the clause as being designed to sponsor individual cases, but to promote the manufactures, trade and commerce of textiles. Clauses (13) and (14) envisage printing and publishing newspapers, periodicals, etc., for the promotion of the objects of this Association and dissemination of knowledge and information, and applying for and acquiring such concessions in any country, as may be advantageous for carrying out the objects of the Association. These two clauses are not intended only for the members. Having these objects in view, we are satisfied that the Tribunal rightly upheld the assessee's cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal, as relying on the practice for the purpose of ascertaining the intention of the objects of the Association. However, those materials themselves have not been included in the annexures. We say no more about those materials. We have already, independently of those materials, come to the conclusion that the objects of the assessee-Association satisfy the test of general public utility. During the course of the arguments our attention was drawn to the decision of the Supreme Court in Commissioner of Income-tax v. Indian Sugar Mills Association [1974] 97 ITR 486 (SC), wherein also a similar claim for exemption was agitated. In that case rule 64 permitted distribution of profits among the members on a resolution being passed for this purpose. This was construed as introducing an element of private gain, which was inconsistent with the object of general public utility. There is no such rule in the present case, so that the assessee's claim cannot fail because of any element of private gain. For all these reasons, we answer the first question in the affirmative and in favour of the assessee. The second question does not arise for con sideration in view of this answer. The assessee ..... 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