General public utility includes trade promotion; incidental member benefit does not defeat charitable exemption when private profit is excluded.

The expression "charitable purpose" in section 4(3)(i) of the Income-tax Act, 1922 includes advancement of any object of general public utility. Where an association's governing documents require its income to be applied only to its stated objects and prohibit distribution of surplus to members, the property is treated as held for charitable purposes. An object directed to promoting and protecting trade, commerce and industry for the community at large satisfies this test, and incidental advantage to members does not destroy the charitable character. On that basis, the income was exempt from tax and the reference was answered for the assessee.

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Issues: Whether the income from the assessee's property was exempt under section 4(3)(i) of the Income-tax Act, 1922 on the footing that the assessee's objects amounted to advancement of an object of general public utility.

Analysis: The statutory expression "charitable purpose" in section 4(3)(i) is inclusive and extends to the advancement of any other object of general public utility. The assessee was bound by its incorporation documents to apply its income only to its objects and not to distribute any surplus to members. Its predominant objects were to promote and protect trade, commerce and industry in the country as a whole. That advancement benefits the community generally and is not displaced because members of the association may also derive incidental advantage. The court treated the legal obligation created by the Companies Act and the memorandum as sufficient to satisfy the requirement that the property be held for charitable purposes.

Conclusion: The assessee's property was held for a charitable purpose within section 4(3)(i), and the income was exempt from tax. The answer to the referred question was in the affirmative and in favour of the assessee.

Ratio Decidendi: Advancement of trade, commerce and industry for the benefit of the community at large is an object of general public utility, and incidental benefit to members does not negate charitable character where private profit is excluded and the income is bound to be applied only to the stated objects.

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