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Issues: Whether the assessee corporation's bus transportation activity is an object of general public utility or otherwise charitable, and whether denial of exemption under section 11 was justified in view of the proviso to section 2(15).
Analysis: The activity of running buses for the public at large was treated as falling within the limb of general public utility, since the service was available to the public and not confined to a select class. However, the applicability of the proviso to section 2(15) depended on whether the corporation was carrying on trade, commerce or business with a dominant profit motive. The lower authorities had proceeded mainly on the basis of fare collection and the threshold of receipts, but had not recorded a clear finding on the dominant and primary object for which the corporation was established. The constitutional and statutory framework governing the corporation, including its transport-related objectives, required examination to determine whether the activity was truly commercial or whether it remained a public utility function with incidental revenue generation.
Conclusion: The matter was required to be examined afresh on the dominant purpose and the true character of the assessee's activities, and the issue was remitted to the appellate authority for reconsideration.
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