Law:

Section:

Section 2(15), read with section 11, of the income-tax act, 1961-charitable purpose-Words "not involving the carrying on of any activity for profit" occurring in section 2(15)-Scope and meaning of-Assessee-association set up to promote commerce and trade in specified commodities and,inter alia, to undertake, on behalf of members, certain business operations incidental or conducive to attainment of said objectives-entire income or property applicable solely and exclusively for promotion of said objects without its distribution amongst members in any form or guise andwithout its utilisation for members' benefit-ITO disallowed claim for exemption under section 11 since objects not charitable within the meaning of section 2(15)-Tribunal allowed appeal-Case referred by tribunal under section 257 direct to supreme court-Whet tribunal right in law in holding that purpose for which assessee was established, though falling within "advancement of an object of general public utility", was a charitable purpose under section 2(15)-Held, yes-Whether assessee's income exempt from tax under section 11-Held, yes Section 257 of the income-tax act, 1961-Reference to supreme court-Whether supreme court can travel beyond the particular question of law referred to it by tribunal on account of conflict in the decisions of high courts-Held, no Facts The assessee-association, a company within the meaning of section 25 of the Companies Act, 1956, was set up, inter alia: a.to promote commerce and trade in art silk yarn, raw silk, cotton yarn, art silk cloth, silk cloth and cotton cloth; b.to carry on all and any of the business in the said articles belonging to and on behalf of the members; c.to obtain import licences for import of art silk yarn, raw silk, cotton yarn and other raw materials as well as accessories required by the members for the manufacture of art silk, silk and cotton fabrics; d.to obtain export licence and export cloth manufactured by the members; e.to buy and sell and deal in all kinds of cloth and other goods and fabrics belonging to and on behalf of the members; f.to do all other lawful things as are incidental or conclusive to the conducive to the attainment of the…

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