Sankar Prasad Mitra, J. - (1.) The assessment years in this reference under Section 66( 1) of the Indian Income-tax Act, 1922, are the years 1958-59, 1959-60, 1960-61 and 1961-62, The previous years are the calendar years 1957, 1958, 1959 and 1960, respectively.
(2.) For all these assessment years the applicant named the Indian Sugar Mills Association, Calcutta, claimed before the Income-tax Officer that the income arising from the sugar export division should not be subjected to tax. The Income-tax Officer did not accept this contention.
(3.) Before the Appellate Assistant Commissioner the assessee submitted that the business which the association carried on in the relevant assessment years was in the nature of property held under trust or other legal obligation to apply the income for general public utility within the meaning of Section 4(3)(i) of the Indian Income-tax Act, 1922, and, as such, the association's income was exempt. Section 4(3)(i) of the Act of 1922 lays down, inter alia, that "income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, in so far as such income is applied or accumulated for application to such charitable or religious purposes as relate to anything done within the taxable territories, and in case of property so held in part only for such purposes, the income applied or finally set apart for application thereto" shall not be included in the total income of the person receiving it. The Appellate Assistant Commissioner, however, negatived the assessee's claim for exemption particularly in view of Rule 5(a) of the association's regulations, which ran thus : "5. (a) If, upon winding up or dissolution of the association there remains after the satisfaction of all its debts and liabilities any property whatsoever, the same shall be dealt with in accordance with the resolution of the association at a general meeting held for the purpose.";