Law: Income Tax Act, 1961

Section: 11

Income-tax----Charitable purpose---Charitable trust---Trust for formation of trade and commerce---Finding by Tribunal that objects of trusts were for general public utility and that there was no activity for profit---Trust entitled to exemption under S.11---Indian Income Tax Act, 1961, S.11. Held; that on a reading -of the objects of the assessee-company, it appeared, that the company was incorporated for the purposes of general public utility and the main object of the company was to promote and protect trade, commerce and industry of the mercantile community. The Tribunal found that the objects of the assessee were for general public utility and did not involve the carrying on of any activities for profit and the office-bearers of the company were not entitled to get salary. On winding up or dissolution of the company, if there remained after satisfaction of the debt and liabilities, any profit whatsoever, the same was not to be distributed amongst the members of the company but was to be given or transferred to such other company having objects similar to the association. Hence, the assessee was entitled to exemption under section 11 of the Income Tax Act, 1961. THIS JUDGMENT DELIVERED BY The assessee is a charitable institution of Banaras Brass Merchant and Manufacturers Association, Varanasi. They derive their income from donations, selling and manufacturing of the products produced by their members. The assessee-company was incorporated as a limited company in 1961. Prior to that it was a society registered under the Societies Registration Act, 1960. The main objects of the institution are as under:-- (a) To foster and develop friendly relations, mutual help and common understanding among all, who are directly or indirectly or interested in or concerned with the trade, commerce, industry, agriculture or manufacture; (b) To promote and protect the trade, commerce, industry, agriculture and manufacture in which members of the association are engaged or interested, directly or indirectly and to represent and to express on these and connected questions the opinions of the mercantile…

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