1977 (9) TMI 33

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.... in the circumstances of the case, the Appellate Tribunal is justified in law in holding that the provisions of section 28(iii) are not applicable to the facts of the case ?" The question arises in respect of the assessment years 1971-72 and 1972-73. The Tribunal declined to refer the second question of law. Reference of the said question was sought to be compelled on an application made to this court under section 256(2) of the Act. This court compelled the reference and accordingly I.T.Rs. Nos. 78 and 79 of 1977 are before this court in respect of the said question, reference of which was declined by the Tribunal and was compelled by this court. The question referred is as follows: "Whether, on the facts and in the circumstances of ....

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....ads are entitled to exemption under section 11 of the Income-tax Act read with section 2, clause (15), of the same, or whether the exemption is to be denied on the ground that the Cochin Chamber of Commerce has been carrying on an activity for profit which would dissentitle it to earn the exemption under section 11 of the Act. The exact effect and import of the exemption under section 11 read with section 2(15) of the Act was recently expounded by the Supreme Court in Indian Chamber of Commerce v. Commissioner of Income-tax [1975] 101 ITR 796 (SC). It was pointed out that section 2(15) must be interpreted according to the language used therein, and against the background of Indian life, and that the benefit of the exemption from total incom....

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....n discussed nor found as to whether the Chamber of Commerce can be said to be carrying on an activity for earning profit within the meaning of the words used in section 2(15) of the Income-tax Act. Counsel rightly pointed out that the approach to this question will have to be in the light of the exposition made by the Supreme Court in the decision noticed supra, and that the Tribunal and the assessing authority had proceeded on the basis of this court's pronouncement in Cochin Chamber of Commerce's case [1973] 87 ITR 83 (Ker) referred to earlier. We think the submission of counsel is well-founded; and that in respect of items referred to by him it is not only fair and proper, but very necessary, that there should be a fresh investigation an....