ANDHRA CHAMBER OF COMMERCE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee, the Andhra Chamber of Commerce, an incorporated company, obtained registration under the provisions of section 26 of the Indian Companies Act (VII of 1913). Both section 26 of that Act and article 4 of the memorandum of association required the assessee-association to expend its income solely on the promotion of its objects and prohibited it from distributing any portion of its income amongst its members by way of dividend or otherwise. Clause 7 of the memorandum provided that, even if the assessee-association was dissolved or wound up, its assets should not be distributed amongst the members of the Chamber, but should be utilised by transfer to other institutions with similar objects. THE principal sources of income of the assessee-association were the subscriptions and donations it received from its members and the rental it received from the tenants who occupied the building it owned at Madras. THE principal objects of the association as set out in sub-paragraphs (a), (b), (c), and (y) of clause 3 of the memorandum of association were : (a) To promote and protect trade, commerce, and industries of India in the Province of Madras and in particular in the Andhra country. (b) To aid, stimulate and promote the development of trade, commerce and industries in India or any part thereof with capital principally provided by Indians or under the management of Indians, (c) To watch over and protect the general commercial interests of India or any part thereof and the interests of the Andhras in particular engaged in trade, commerce or manufacture in India and in particular Andhra Desa. (y) To do all such other things as may be conducive to the preservation and extension of trade, commerce, industries, and manufactures or incidental to the attainment of the above objects or any of them.

(2.) IN paragraph 4 of the statement of the case submitted by the Tribunal it admitted the claim of the assessee-association, that in practice too its objects were to promote that was accepted was :

(3.) NONE of the objects expressly enumerated in this statutory explanation to section 4(3), relief of the poor, education and medical relief, arises for consideration in this case. The real question for determination is, whether the objects of the assessee association satisfy the statutory test, "the advancement of any other object of general public utility". Is the avowed object of the assessee-association to promote and protect the trade, commerce and industry in the country as a whole an object of general public utility is the question to which we have to address ourselves.