TaxTMI 
TaxTMI 
1980 (5) TMI 68
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.... its registration. At first no return was filed by the assessee for asst. yr. 1968-69 under s. 139 of the Act. A return was, however, filed on initiation of proceedings under s. 147(a)of the Act showing nil income. The return was accompanied with a written claim of the assessee that it was a charitable institution which was constituted with the purpose to further the interest of its members, arouse interest for democratic socialism, to protect the interest of its members, to assist, regulate and control the trade in grains and oil seeds and to advice in the settlement of disputes. It was claimed that the assessee Mahasangh had received voluntary donations of Rs. 2,96,361 from Anaj Tilhan Vyaparies of M.P. during the financial year ending 31....
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....plicate. One copy of the receipt was to be submitted to the Mahasangh alongwith application form for export. The members were further required to remit 50 ps. Per quintal for its administrative expenses. After narrating the contents of the circular, the ITO held that the sum of 50 ps. Per quintal were charged by the assessee Mahasangh for the services rendered and the subsequent letter dt. 12th Sept.,1967 was only a play on words. As such, the ITO came to the conclusion that the amounts were not at all voluntary donations covered by s. 12 of the Act. The ITO also held that the assessee was not a public and charitable institution in view of the decision of the Supreme Court in the case of Indian Chamber of Commerce vs. CIT (3). In that view ....
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...., the matter was clarified in the subsequent circular letter issued by the Sangh on 12th Sept., 1967. It was submitted that in the latter circular it was made clear that there was no pressure on any member to contribute 50 ps. per quintal, that the contribution was entirely voluntary and was for the promotion of the interest of the traders. Shri Gupta then pointed out that the assessee's case would be fully covered by the definition of a public charitable trust given in s. 2(15) of the Act in view of the decision of the Supreme Court in 121 ITR 1(5). He also submitted that the contribution made at the same time by the same traders to the chief Minister's Drought Relief Fund @ Rs. 30 per quintal for Gulabi Chana and Rs. 5 per quintal for Dal....
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....the requirements of the Act have been complied with. Therefore it follows, as an effect of registration of the assessee Mahasangh as non-trading corporation under the said Act, that it is a corporation. 8. The objects of the assessee Mahasangh are set out in its constitution according to which the predominant object is to protect the interest of its members, to assist, regulate and control the trade in grains and oil seeds and to advise to settle the disputes. This being the predominant object of the assessee Mahasangh, it has to be held as a charitable institution on the ration of the decision of the Andhra Pradesh High Court in Hyderabad Stock Exchange Limited vs. CIT (2). In that case also the aims and objects of he assessee, a stock ....
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....h Manufacturers Association (5). In that case, their Lordships of the Supreme Court had laid down that where the dominant or primary purpose of the assessee is of promotion of commerce and trade in art silk yarns, etc., it is an object of public utility not involving the carrying on of any activity for profit within the meaning of s. 2(15). The assessee Mahasangh is not a business as such. It is only acting for the benefit of the traders who are its members. Its predominant object is to assist, regulate and promote the trade in grains and oil seeds. Therefore this case is covered by the ratio of the above mentioned Supreme Court decision 121 ITR 1(5). 9. In the instant case it appears that there was ban on export of Gulabi Chana and puls....
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....ade willingly and without compulsion and the money had to be gifted or given gratuitously without consideration. We are of the view that these tests are satisfied on the facts of the present case. We are unable to agree with the Deptl. Rep. that this was a fee for any specified services rendered by the Mahasangh to the traders or it was a quid-pro quo for the export permit which they would have got for export of Gulabi Chana. The voluntary contributions of 50 ps. per quintal made by to the assessee Mahasangh were wholly negligible as compared with the contributions made by these members @ Rs. 30 per quintal for Gulabi Chana to the Chief Minister's Drought Relief Fund. It was a case on ground before us that the M.P. High Court has held that ....