Director of Income Tax (Exemption) vs National Dairy Development Board Employees Benevolent Fund Welfare Association National Dairy Development Board

Madan B. Lokur, J.—The Revenue is aggrieved by an order dated 28th February, 2007 passed by the Income Tax Appellate Tribunal, Delhi Bench ''D'' in ITA No. 5455 /Del/2004 relevant for the Assessment Year 2004-2005.

The assessed was denied registration u/s 12AA of the Income Tax Act, 1961 (for short the Act). The Income Tax Appellate Tribunal went through the Memorandum of Association of the assessed as well as its aims and objects and thereafter, on the facts of the case, came to the conclusion that the Director of Income Tax (Exemption) was not justified in denying registration to the assessed.

The Tribunal has discussed that the association was formed to provide financial assistance for maintenance or for welfare or for education or for any other similar purpose to its members who are employees of the National Dairy Development Board, their wives, husbands, children, widows, widowers, relatives and other dependants for support. The assessed was formed for the purposes of arranging various kinds of welfare programmes to promote literacy, cultural and other social activities by awareness programmes, lectures, exhibitions, press conferences and seminars. These activities were not restricted only to the members of the association. On this basis, the Tribunal concluded that the assessed could be classified as an association for a charitable purpose as defined in Section 2(15) of the Act which includes objects of general public utility. Consequently, the Tribunal allowed the appeal of the assessed.

Learned Counsel for the Revenue has relied upon Commissioner of Income Tax Vs. Bel Employees Death Relief Fund and Service Benefit Fund Association, to contend that the rules of the society restricted the benefits of the association to the members who had subscribed to the association and were its beneficiaries. We find that the facts of that case are completely different from the facts of the present case in as much as there is no such restriction in so far as the memorandum of association and the aims and objects of the present association are concerned. The benefits of the association are not restricted to its members only.

The Tribunal has also considered the decision of the Supreme Court in Commissioner of Income Tax, Madras Vs. Andhra Chamber of Commerce, wherein the Supreme Court held that ''objects of general utility'' which occurs in Section 2(15) of the Act is not restricted to objects beneficial to the whole of mankind and that an object beneficial to a section of the public is an object of general public utility.

Following the principle laid down by the Supreme Court as well as taking into account the facts of the present case, we find that the Director of Income Tax (Exemption) had incorrectly denied registration to the assessed.

No substantial question of law arises for consideration.

Dismissed.