General public utility exemption survives ancillary business activity where the dominant purpose remains public benefit.

An institution constituted under the Road Transport Corporations Act, 1950 for public transport service and related public benefits was treated as pursuing an object of general public utility. For the 1922 Act, its activities fell within "advancement of any other object of general public utility," so exemption was available. For the 1961 Act, section 2(15) was read as an inclusive charitable definition, and the phrase excluding activities involving profit did not deny exemption where the dominant purpose remained public utility, even if ancillary business-like operations produced surplus. The income was therefore held exempt under both enactments.

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Issues: Whether the assessee-Corporation's income for the assessment years 1960-61 and 1961-62 was exempt under section 4(3)(i) of the Indian Income-tax Act, 1922, and for the assessment year 1962-63 was exempt under section 11 of the Income-tax Act, 1961.

Analysis: The Corporation was constituted under the Road Transport Corporations Act, 1950 to provide an efficient, adequate, economical and properly coordinated road transport system for the public. Its statutory objects were directed to public benefit, and the balance of income after meeting expenses was to be applied for road development, passenger amenities, labour welfare, and related public purposes. For the earlier assessment years, the activity fell within the expression "advancement of any other object of general public utility" under the 1922 Act. For the assessment year 1962-63, the Court construed section 2(15) of the 1961 Act as an inclusive definition of charitable purpose and held that the restrictive words "not involving the carrying on of any activity for profit" do not exclude an institution whose dominant object is public utility and not profit-making, even if it carries on ancillary business-like operations and earns surplus.

Conclusion: The assessee was held to be an serving an object of general public utility and its income was exempt from tax under both the 1922 Act and the 1961 Act.

Ratio Decidendi: An institution formed to advance a general public utility purpose does not lose exemption merely because it carries on business-like activities or earns surplus, so long as its object is not profit-making and the surplus is applied to public utility purposes.

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