SATISH CHANDRA, J. - (1.) ETAWAH District Exhibition and Cattle Fair Association, the assessee, was taxed in the status of an AOPs. For the asst. yrs. 1963-64, 1964-65 and 1965-66 it claimed that its income was exempt from tax under S. 11 (1) (a) of the IT Act, 1961. The Income Tax Officer repelled this submission and brought the entire income to tax. The assessee appealed. The AAC held that-- (a) in order to be entitled for an association to exemption from income tax, it is not necessary that it should be a registered body (b) the assessee owned income-yielding properties. Its entire organisation and undertaking also constituted property; (c) some of the objects were undoubtedly charitable but some were covered by the clause "object of general public utility" occuring in S. 2 (15) of the Act. Since the business of the association involved carrying on of an activity for profit it was not held to be a charitable trust under S. 11 (1) (a) . He, however, upheld the claim of the assessee that it was entitled to emption under S. 11 (b) in respect of that part of its income which was actually used for charitable purposes. The appeal was allowed in part.
(2.) BOTH the assessee as well as the Department went up in appeal to the Tribunal. The Tribunal found that the assessee association first held Exhibition and Cattle Fair at Aligarh in 1888, and continued to hold it till 1892. The cattle fair was revived in 1910, and since then it has been held every year. The income of the association consisted of donations from zamindars etc. By 1935 the association had accumulated a fund of Rs. 50,000/-. The association constructed some shops on the exhibition ground, which was partly owned by the association. The association adopted a written Constitution in 1954. The association got itself registered under the Societies Registration Act in the year 1970. According to its constitution the objects of the Association were-- (a) To promote cultural, social and educational developments. (b) to encourage development of Art, agriculture, horticulture and industry of the district. (c) To improve the breeding of cattle, sheep, goat, fish, horse and poulty etc. in the district. (d) To promote physical culture, public health, maternity and child welfare.
(3.) PARAGRAPH (3) of the Constitution provided that an agricultural and industrial exhibition and cattle fair will be held annually at Etawah and all necessary and suitable steps will be taken to achieve the said objects.;