ADDL COMMISSIONER OF INCOME-TAX Vs. ETAWAH DISTRICT EXHIBITION AND CATTLE FAIR ASSOCIATION
LAWS(ALL)-1980-7-53
HIGH COURT OF ALLAHABAD
Decided on July 07,1980

ADDL.COMMISSIONER OF INCOME-TAX Appellant
VERSUS
ETAWAH DISTRICT EXHIBITION AND CATTLE FAIR ASSOCIATION Respondents




JUDGEMENT

Rastogi, J. - (1.)The Income-tax Appellate Tribunal, " A Bench ", Allahabad, has referred the following questions for the opinion of this court: At the instance of the department:
"(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee held property under trust within the meaning of Section 11(1)(b) of the Income-tax Act, 1961, and, if so, whether the assessee was entitled to exemption under Section 11(1)(b) of the Act in respect of amounts actually spent on charities as mentioned in its order ?"
At the instance of the assessee:
"(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the income of the assessee-association was not exempt under Section 11(1)(a) ? (ii) Whether, on the facts and in the circumstances of the case, holding of agricultural and industrial exhibitions and cattle fair involved an activity for profit within the meaning of Section 2(15) of the Act ?"

(2.)This reference had come up before us for hearing on an earlier occasion and answer was given to the question, referred at the instance of the department. The questions referred at the instance of the assessee were returned unanswered since nobody had put in appearance on its behalf. Subsequently, on an application given by the assessee that decision was recalled by an order made on April 5, 1979, and that is how the reference has come up again for hearing.
(3.)The reference relates to the assessment years 1963-64, 1964-65 and 1965-66. The assessee is M/s. Etawah District Exhibition and Cattle Fair Association. For all these three years, assessments were made on it in the status of an association of persons. The assessee had claimed that its income was exempt from tax under Section 11(lXa) of the I.T. Act, 1961, hereafter "the Act". The ITO repelled that submission and brought the entire income to tax. The main reasons given by the ITO are contained in his order, given for the assessment year 1963-64, and they were:--that the assessee is not registered under the Socities Registeration Act; that the assessee does not own any property and, as such, the provisions of Section 11 are not applicable to it, and, lastly, there is no provision in the constitution of the assessee-association making it obligatory on its part to spend the income derived from the holding of exhibition, cattle fair, etc., wholly and exclusively, for the objects of the association, nor is there any provision expressly prohibiting the distribution of such income among the members of the association by way of dividend. For the other two years for the same reasons the claim of the assessee was rejected and the entire income was brought to tax.
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