R.K.Agrawal, J. - (1.) The Tribunal, Allahabad, by separate orders has referred the following two questions of law under Section 256(2) of the IT Act, 1961, hereinafter referred to as the Act, for opinion to this Court.; "1. Whether the Tribunal was justified in holding that the income of the assessee-AOP was exempt from tax on the ground of mutuality ? 2. Whether the Tribunal was justified in ignoring that the income of the assessee-AOP was assessable business income under Section 28(iii) of the IT Act, 1961, in view of the fact that the assessee-AOP was carrying on an organised activity of arranging meetings and conferences for discussing matters of productions, accounts, taxation, etc. ?"
(2.) While the Ref. No. 247 of 1987 relates to asst. yrs. 1976-77 to 1978-79, the Ref. No. 248 of 1987 relates to the asst. yrs. 1979-80 and 1980-81.
(3.) Briefly stated that facts giving rise to the present references are that the respondent-assessee, M/s J.K. Organisation Ltd., Kamla Tower, Kanpur, hereinafter referred to as the Organisation, is an AOP. It is registered under the Indian Trade Unions Act, 1926, and its membership is confined to persons whose undertakings in business, trade, industry and agriculture form part of or are connected with the J.K. Group of undertakings or who are trustees under a trust made by any member or members thereof. The main object of the Organisation is to regulate the relations between members and their employees and between members and members. Rule 3 of the rules and regulations, which contained objects is reproduced below : "(i) To promote and protect the trade, commerce, industry and agriculture in which the members of the association are or may be concerned and to impose restrictive conditions on the conduct of such trade, commerce, industry and agriculture. (ii) To formulate and recommend to members common administrative policies and to settle questions of common interest and to protect the members of the association against competition. (iii) To formulate and regulate terms and conditions of employment of the employees of its members and to start to organise, establish and maintain labour relations and labour welfare organisation. (iv) To consider all questions affecting trade, commerce, industry and agriculture in which members are or may be concerned and to the all necessary actions in connection therewith. (v) To engage the services of technical and other advisers and experts for the benefit of the trade, commerce, industry and agriculture in which the members of the association are or may be concerned. (vi.) To establish a fund or funds for the purpose of- (a) Legal assistance. (b) All activities undertaken for furthering all or any of its objects. (c) Payment of remuneration to technical or legal experts, secretaries and staff. (vii) To draw, accept, endorse, discount or otherwise deal with cheques, hundies, bills of exchange and other negotiable instruments and to open and operate account or accounts' with any firm or firms, bank or banks in connection with the business of the association. (viii) To invest the moneys not immediately required for the purposes of its administration. (ix) To borrow or raise any moneys required for the purposes of the association.";