- (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, the following question of law has been referred by the Tribunal : "Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the assessee is a mutual concern and that consequently the income derived by the assessee as and when and by way of subscription and admission fees is not liable to be taxed under the Income-tax Act, 1961 ?"
(2.) This reference relates to the assessment years 1975-76, 1978-79 and 1981-82. The assessee is a trade association. The objects for which it was established as set out in Clause 3 of the articles of association are, inter alia, to promote and protect trade, commerce and industries of India and in particular the trade, commerce and industries connected with paper, to encourage friendly feeling and unanimity amongst the mills and users of steam and water and/or electric power on all subjects connected with their common good, to ameliorate the working conditions of the employees in the mills and factories, to promote good relations between the employees and the employers, to educate public opinion and disseminate correct information about the working of the industry by means of publication of literature, by taking part in exhibitions and through the press and other media and to organise, establish, start or sponsor a separate institute or Department or Departments of the association for the purpose of doing research work, sales of paper and other products of the mills and for such other purposes as are mentioned in the objects of the association. The association does not carry on business for its members or outsiders. The receipts of the association are from the following sources : 1. Admission fee receivable from its members as per Clause 17 of the articles of association. 2. Annual subscription fee receivable from its members as per Clause 18 of the articles of the association.
(3.) Special subscription fee or surcharge receivable from its members as per Clause 19 of the articles of association.;