COMMISSIONER OF INCOME-TAX Vs. TEXTILE MANUFACTURERS ASSOCIATION

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal (Delhi Bench " C ") has referred the following question of law to this court for opinion: " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to the benefit of exemption provided in Section 4 (3) (i) of the Act of 1922 and in excluding the property income from the assessment of the assessee ?

(2.) THE assessment year is 1960-61 for which the previous year ended on June 30, 1959. The assessee, M/s. Textile Manufacturers' Association, Amritsar, is a company limited by guarantee and registered under the Indian Companies Act, 1913. It was incorporated in 1936. The assessee owns a building at Amritsar from which it derives rental income. That income was being assessed to tax in the previous years which was not objected to by the assessee but during the course of the proceedings for the assessment year 1960-61, the assessee contended that the rental income of Rs. 6,600 was exempt under Section 4 (3) (i) of the Income tax Act, 1922 (hereinafter called " the Act " ). The Income-tax Officer rejected the contention of the assessee and included the rental income in its total income for the purpose of assessment. The assessee filed an appeal before the Appellate Assistant Commissioner which was dismissed on March 12, 1964. The assessee then filed an appeal before the Income-tax Appellate Tribunal which was accepted on the basis of the judgment of their Lordships of the Supreme Court in Commissioner of Income-tax v. Andhra Chamber of Commerce, [1965] 55 I. T. R. 722 ; [1965] I S. C. R. 565 (S. C. ). The Commissioner of Income-tax then applied for a reference to this court which was allowed.

(3.) THE learned counsel for the petitioner has vehemently argued that the judgment of their Lordships relied upon by the Tribunal is distinguishable which is apparent from the following observations of their Lordships on page 727 of the report: " The principal objects of the assessee are to promote and protect trade, commerce and industries and to aid, stimulate and promote the development of trade, commerce and industries in India or any part thereof. By the achievement of these objects, it is not intended to serve merely the interests of the members of the assessee. Advancement or promotion of trade, commerce and industry leading to economic prosperity enures for the benefit of the entire community. That prosperity would be shared also by those who engage in trade, commerce and industry but on that account the purpose is not rendered any the less an object of general public utility. It may be remembered that promotion and protection of trade, commerce and industry cannot be equated with promotion and protection of activities and interests merely of persons engaged in trade, commerce and industry. "