Law:

Section:

Section 11 of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - Assessment years 1964-65 to 1966-67 - Assessee-Chamber of Commerce received amounts for issuance of certificates for survey and weighment to advance trade and commerce and claimed exemption under section 11(1)(a) - Whether since object of assessee was to help its members engaged in trade or commerce and others in same field which was an object of general public utility, income of assessee would be exempt from tax under section 11(1)(a) - Held, yes FACTS The assessee-Chamber of Commerce received amounts in the accounting period relevant to the assessment year in question for the issuance of certificates for survey and weighment. It was proposed to treat the said receipts as income for the purpose of assessment. The assessee contended that the income in question was derived from the property held under trust wholly for charitable purposes and, therefore, was exempted under section 11(1)(a). The Tribunal accepted the assessee's contention, allowed the assessee's claim. On reference : HELD If the object is for general public utility, such as, say, for educating public opinion or for the advancement of trade and commerce and there is no object to carry on any activity for profit, the fact that in carrying out the objects of the trust some income results would not take the charitable purpose outside the scope of the definition. The very object must be for the carrying on of an activity for profit in order that the object may be outside the purview of the definition. In instant case, the object was to advance trade and commerce. The issuance of the certificate was for that purpose. It obviated delay and it helped those who were engaged in trade and commerce. This was the main purpose and if, for carrying out this object, it was necessary to incur expenses it was only natural that a fee should be charged and that fee certainly could not be charged with such arithmetic precision that it always resulted in receipts which never exceed the expenditure involved. Prudent carrying on of any activity would involve the charging of such fees as would normally…

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