1987 (10) TMI 38

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....hat the assessee, Mahasangh, is a public charitable institution and that its objects are covered within the meaning of section 2(15) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the contributions to the extent of Rs. 2,96,361 received by the assessee, Mahasangh, from its members at 50 paise per quintal of gulabi chana and pulses exported outside Madhya Pradesh were voluntary contributions exempted under section 12 of the Income-tax Act, 1961 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 2,87,231 (out of Rs. 2,96,361) is not liable to tax under section 28 of the Income-tax Act, ....

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....d by the Tribunal that the Mahasangh was a charitable institution within the meaning of section 2(15) of the Act is, on the facts of the present case, erroneous. It has also been urged by him that the aforesaid amount received by the Mahasangh was not a voluntary donation and was consequently not exempt under section 12 of the Act. Having heard learned counsel for the parties, we find it difficult to agree with the submission made by learned counsel for the Department. The Tribunal, in its appellate order, has recorded the following findings: (i) 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 th....

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.... Manufacturers Association [1980] 121 ITR 1 is squarely applicable. It was held that the true meaning of the words " not involving the carrying on of any activity for profit" used in section 2(15) of the Act is that when the purpose of a trust or institution is the advancement of an object of general public utility, it is that object of general public utility and not its accomplishment or carrying out which must not involve the carrying on of any activity for profit. So long as the purpose does not involve the carrying on of any activity for profit, the requirement of the definition would be met and it is immaterial how the monies for achieving or implementing such purpose are found, whether by carrying on an activity for profit or not. It ....