Charitable purpose exemption for trade associations upheld where property income was dedicated to members' collective public utility object.

Rental income from property held by an association of textile manufacturers was treated as exempt because the association's objects fell within "charitable purpose" as advancing an object of general public utility. The court applied the principle that a purpose need not benefit mankind at large and may still qualify if it serves a sufficiently defined and identifiable section of the public. On the memorandum of association, the income and property were dedicated to the association's objects and could not be distributed to members, and the benefited class was the defined body of textile manufacturers in the province. The earlier Supreme Court authority on trade association exemption was followed, and the income was excluded from assessment.

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Issues: Whether rental income from property owned by an association formed to promote the interests of textile manufacturers was exempt under section 4(3)(i) of the Income-tax Act, 1922 as income held for a charitable purpose.

Analysis: The relevant statutory test treated "charitable purpose" as including advancement of any other object of general public utility. The court applied the principle that an object need not benefit mankind at large and may still qualify if it benefits a sufficiently defined and identifiable section of the public. On the memorandum of association, the income and property were dedicated to the association's objects and could not be distributed to members, and the class benefited was the defined body of textile manufacturers in the province. The earlier Supreme Court authority on trade association exemption was held to govern the case.

Conclusion: The rental income was exempt under section 4(3)(i), and the assessee was entitled to exclude it from assessment.

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