Skip to content


Commissioner of Income-tax, Madras Vs. Andhra Chamber of Commerce and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtSupreme Court of India
Decided On
Judge
Reported in[1981]130ITR184(SC)
ActsIncome Tax Act, 1961 - Sections 2(15) and 11
AppellantCommissioner of Income-tax, Madras
RespondentAndhra Chamber of Commerce and ors.
Excerpt:
.....taxation - charitable purpose - sections 2 (15) and 11 of income tax act, 1961 - whether object of andhra chamber of commerce fell within last category of charitable purpose provided in act - predominant activity of andhra chamber of commerce is promotion of trade and commerce which was an object of general pubic utility - held, view of high court that andhra chamber of commerce's object is of charitable purpose and it is entitled to tax exemption justified. - [j.c. shah,; k. subba rao and; s.m.sikri,jj.] the respondent-company was carrying on the business of redrying tobacco entrusted to it by its customers. the process involved the keeping of the moisture content of tobacco leaf at a particular level, and in order to ensure that level, the leaf was packed in bales, in water-proof..........silk cloth manufacturers association : [1980]121itr1(sc) . it is clear from the judgment in cit v. andhra chamber of commerce, that the objects of the andhra chamber of commerce fell within the last head of charitable purpose denoted by the words 'advancement of any other object of general public utility' and were, therefore, charitable within the meaning of section 2(15) of the i.t. act, 1961, unless it could be shown that they involved the carrying on of any activity for profit. the words 'not involving the carrying on of any activity for profit' came up for consideration before this court in addl. cit v. surat article silk cloth manufacturers association, and there it was held by the majority of the judges that it was only where the predominant object and the purpose of the activity.....
Judgment:

1. This appeal by special leave is covered by the judgment of this Court in CIT v. Andhra Chamber of Commerce : [1965]55ITR722(SC) and in Addl. CIT v. Swat Article Silk Cloth Manufacturers Association : [1980]121ITR1(SC) . It is clear from the judgment in CIT v. Andhra Chamber of Commerce, that the objects of the Andhra Chamber of Commerce fell within the last head of charitable purpose denoted by the words 'advancement of any other object of general public utility' and were, therefore, charitable within the meaning of Section 2(15) of the I.T. Act, 1961, unless it could be shown that they involved the carrying on of any activity for profit. The words 'not involving the carrying on of any activity for profit' came up for consideration before this Court in Addl. CIT v. Surat Article Silk Cloth Manufacturers Association, and there it was held by the majority of the judges that it was only where the predominant object and the purpose of the activity carried on was to earn profit, that the object could be said to involve the carrying on of an activity for profit but if the predominant object was to subserve the charitable purpose then the inhibition of these last 9 words would not be attracted. It is clear from the facts set out in the judgment of the High Court that profit-making was not the predominant object of the activity carried on by the Andhra Chamber of Commerce but the predominant object was to promote trade and commerce which was an object of general public utility. The High Court was, therefore, right in taking the view that the objects of the Andhra Chamber of Commerce fell within the last! category of charitable purpose given in Section 2(15) of the Act and its income was exempt from tax under Section 11(1) of the Act.

2. The appeal is accordingly dismissed with no order as to costs.

3. S.L.P. (Civil) No. 4165 of 1979, S.L.P. (Civil) Nos. 4166-71 of 1979, S.L.P. (Civil) Nos. 4172-75 of 1979 and S.L.P. (Civil) Nos. 3779 of 1979 are also dismissed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //