1. The following questions are involved in this reference under Section 66(1) of the Indian Income-tax Act, 1922 :
'1. Whether, on the facts and in the circumstances of the case, the objects of the assessee-association were objects of general public utility and accordingly the assessee was entitled to exemption from tax in respect of all its activities under Section 4(3)(i) of the Indian Income-tax Act, 1922
2. Whether, on the facts and in the circumstances of the case, income derived by the assessee from (a) membership roster advertisement, (b) member roster sale fees, (c) agents' authorisation fees, and (d) miscellaneous receipt, was income from business carried on in the course of the actual carrying out of a primary purpose of the assessee
3. If the answer to question No. 2 above is in the affirmative, whether the work in connection with the business was mainly carried on by beneficiaries of the assessee and accordingly the income derived from such activities was exempt from tax under Section 4(3)(i) of the Income-tax Act, 1961?'
2. The statement of the case relates to the assessment years 1961-62 to 1964-65. The assessee is a company and was registered under Section 26 of the Indian Companies Act, 1913, as an association not for profit and was qualified for and exempted from using the word 'limited' in its name. The assessee claimed exemption under Section 4(3)(i) of the Indian Income-tax Act, 1922, for the assessment year 1961-62 and under the corresponding Section 11 of the Income-tax Act, 1961, for the remaining three assessment years.
3. We reframe question No. 1 by adding the words 'for the assessment year 1961-62 and the corresponding Section 11 of the Income-tax Act, ] 961, for the assessment years 1962-63 to 1964-65' after the words 'Indian Income-tax Act, 1922.'
4. The Income-tax Officer has rejected the assessee's contention and has brought to tax several items of income specified in the statements of the case on the grounds stated in the assessment orders. Appeals preferred by the assessee were heard by two Appellate Assistant Commissioners successively. One of them has dismissed the two appeals and the other one has allowed the remaining two appeals for the reasons recorded in their respective orders. Appeals were filed by the assessee and also by the department before the Appellate Tribunal who has allowed the appeals filed by the assessee and has dismissed the appeals filed by the department by holding that the assessee 'was formed with the primary object of development and promotion of motor trade and industry which was essential and an integral part of the general commerce and industry of the country and, as such, the same was of public utility and was exempt from tax '.
5. Having considered the respective submissions made by the learned counsel for the parties including the objects set forth in the memorandum of association of the assessee and the decision of the Supreme Court in the case of Commissioner of Income-tax v. Indian Sugar Mills Association, reported in : 97ITR486(SC) and Indian Chamber of Commerce v. Commissioner of Income-tax reported in : 101ITR796(SC) , we are of the opinion that the assessee has carried on those activities for profit and there being no restrictions in its memorandum and articles of association from making profit from those activities, its income from those activities is liable to be taxed and the assessee is not entitled to exemption as claimed in the assessment years concerned.
6. Accordingly, we return our answer to question No. 1 in the negative and in favour of the revenue by saying that the assessee is not entitled to exemption from tax in respect of any of its activities under Section 4(3)(i) of the Indian Income-tax Act, 1922, and the corresponding Section 11 of the Income-tax Act, 1961, as claimed in the assessment years concerned.
7. Accordingly, the remaining questions do not call for any answer and we decline to answer them. There will be no order as to costs.
Dipak Kumar Sen, J.
8. I agree.