COMMISSIONER OF INCOME TAX Vs. DHARMODAYAM COMPANY

JUDGEMENT

(1.) The questions referred to us in the reference are

(2.) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that setting apart reserves under Art.39 of the assessee's memorandum did not vitiate the charitable purpose of the institution -

(3.) After the Income Tax Act of 1961 came into force, the present case arose. The assessment year, with which we are concerned in this case, is 1968-69; and the Income Tax Officer assessed the income derived by the Company by conducting kuries to tax for the said year. The Officer held that, since the sole test for exemption under S.11 of the Act was that the objects on which the income was spent should be charitable, the test was not satisfied and therefore the liability to tax arose. In appeal, the Appellate Assistant Commissioner came to a different conclusion; he held that the earlier decision of this Court applied to the case and the alteration in the definition of "charitable purpose" in S.2(15) of the new Act did not bring about any alteration in the position of the Company. This view was accepted by the Appellate Tribunal as well. Thereafter, at the instance of the Revenue, the questions mentioned at the commencement of the judgment have been referred to us.