Charitable purpose and incidental income: profit from ancillary receipts did not defeat exemption where the dominant object remained public utility.

A society whose dominant object was to promote and safeguard the business interests of the press in India fell within advancement of objects of general public utility. Incidental receipts from property, subscriptions, sales of hand-books, and letting of rooms did not destroy its charitable character, because the decisive test was whether the predominant purpose of the activity was to earn profit or to further the charitable object. On the facts, the receipts were merely incidental to that dominant purpose, so the exemption was available to the assessee.

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Issues: Whether the assessee-society's objects were of general public utility and whether incidental letting of property and receipt of income destroyed its charitable character so as to deny exemption under the relevant income-tax provisions.

Analysis: The primary objects of the society were to promote and safeguard the business interests of the press in India, while the remaining clauses of its memorandum were only incidental powers for carrying out that dominant purpose. The existence of income from property, subscriptions, sales of hand-books, or letting of rooms did not, by itself, establish that the society was carrying on an activity for profit. The decisive test was whether the predominant object of the activity was to earn profit or merely to subserve the charitable object. On the facts, the letting and other receipts were incidental to the advancement of the society's dominant purpose and were not carried on with a profit motive.

Conclusion: The society's objects fell within advancement of objects of general public utility, and the incidental income did not take the case out of the charitable exemption. The answer was in favour of the assessee.

Ratio Decidendi: A charitable purpose is not denied exemption merely because incidental activities yield profit, provided the dominant object remains the advancement of the charitable purpose and not the making of profit.

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