Law:

Section:

Section 10(26B) of the Income-tax Act, 1961 - Scheduled Tribes/Castes - Central/State financial bodies for promoting interests of - Whether income of assessee, State Forest Corporation, which was primarily formed with object to ameliorate suffering of tribal population of State of Arunachal Pradesh and for ushering concept of developmental activities in State, was entitled to exemption under section 10(26B) - Held, yes FACTS The assessee, State Forest Corporation, claimed exemption under section 10(26B). The assessing authorities as well as the Tribunal rejected the claim holding that the assessee was not established for the purpose of promotion of tribal welfare and as such it was not entitled to the exemption. On appeal : HELD It was noticed from records that the assessee-State Corporation was formed as a wholly-owned Government company with avowed object to establish and to promote the forest resources. [Para 8] On consideration of the background under which the assessee-Corporation came into being and taking into account the provisions under articles 46 and 47 of the Constitution, it was clear that the assessee was primarily formed to ameliorate the suffering of the tribal population of the Arunachal Pradesh and for ushering the concept of developmental activities in the State. In the facts and circumstances of the instant case, a restricted interpretation of clause (26B) of section 10 was not called for. [Para 14] In view of aforesaid, the assessee-State Corporation was formed with the object to promote the members of the Scheduled Tribes in the State of Arunachal Pradesh and as such the income of the said corporation was entitled to exemption under section 10(26B). [Para 16] In the result, the instant appeals were allowed. CASES REFERRED TO CIT v. Ramakrishna Deo [1959] 35 ITR 312 (SC) [Para 5], CIT v. Harijan Evam Nirbal Varg Avas Nigam[1997] 226 ITR 696 (All.) [Para 6] and Delhi Stock Exchange Association Ltd. v. CIT [1997] 225 ITR 235/91 Taxman 273 (SC) [Para 15]. Dr. A.K. Saraf, D. Baruah, Ms. N. Hawelia, Ms. M.L. Gope, S. Chetia and A. Goyal for the Appellant.U. Bhuyan and A. Hazarika for the Respondent. JUDGMENT P.G. Agarwal, J. - All the above…

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