LexHOSHIARPUR CENTRAL CO-OPERATIVE BANK LTD. versus COMMISSIONER OF INCOME-TAX, SHIMLA
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1 S.C.R. SUPREME COURT REPORTS 107 carry on or renew the proceedings. In this case, it is '960 not necessary to pronounce upon the question whether P-;;n--;;i, dissolution of the House necessarily has the effect of M. s. M. Sharma completely wiping out the contempt or the proceedings v. relating thereto. Dr .. Shree Krishna In· our opinion, for the reasons given above, no Sinha & Others grounds have been made out for the exercise by this Sinha c. J. Court of its powers under Art. 32 of the Constitution. The petition is accordingly dismissed. There will be no order as to costs. Petition dismissed. HOSHIARPUR CENTRAL CO-OPERATIVE BANK LTD. v. COMMISSIONER OF INCOME.TAX, SIMLA. (8. K. DAS, M. HIDAYATULLAH, and J. c. SHAH, Jj,) Income-tax-Co-operative Society-Profits earned in business with non-members-Whether exempt from tax-Income-tax Act, I92I (IX of I92I), s. 60, notification. The assessee Bank, which was a _co-operative society, did business is controlled commodities with the approval of the Registrar of Co-operative Societies and earned profits. It claimed that these profits were also exempt from taxation under F. D. (C. R.) Notification R. Dis. No. 291-I. T./25 dated August 25, 1925, as subsequently amended, issued under s. 60 of the Income-tax Act. This notification exempted "the profits of any co-operative society." from tax. It was urged for the Depart- ment that these words referred to profits made by a co-perative society in its business as a pure co-operative society, i.e., ifLbusi. ness with its own members. within the four corners of the Co- operative Societies Act, 1912, and the bye-laws made thereunder. Held, that the said profits were exempt from tax. The words of the Notification were wide enough to include profits of business of a co-operative society in transactions· with non- members also. It was always open to the appropriate Govern- ment to allow a society to exten<f its business operations to trad- ing with persons other than its members. Once there was such z960 . August 2. 108 SUPREME COURT REPORTS [19fll] 19~0 extension, the profits of the society from such business fell with- in the general words of the :\otification an<l it required more 11,,,1i1arp10· than a supposed underlying intention to negative the exemption. Cc,z/ral - Tl1t Madra5 Central Urban Banh Ltd. v. Commissioner of Co-of'trati1·1: ) I M d 6 r. Rank Ud. Income-tax, (1929 .L.R. 52. a . 40, ". R., The Madras Provin- cial Co-<>Perative Bank Ltd. v. Commissioner of lncomr-tax, (1933) . v. I I.L.R. 56 ~lad. 837 F. B. and Commissioner of Income-ta~. Burma C 011 ;;;;;,;;_~:: 0 v. The Bengalee llr~an. Co~operatit·e Credit Society Ltd., (1933) S .. 1 · l.L.R. 1I Ran. 521, d1stmgmshed . . Utl a CIVIL APPELLATE JURISDICTION: Civil Appl'al No. 238 of 1955. · Appeal from the judgment n.nd order da.ted May 27, 1953, of the Punjab High Court in Civil Reference No. 3/1952. Del!a Singh Rarulhaoo and K. L. Mehta, for the appellant. 111. C. Setalvad, Attorney-General for Irulia, K. N. Rajagopal Sastri and D. Gupta, fo~ the respondent. 1960. August. 2. The Judgment of the court was delivered by Hidayat1<llah ]. HIDAYATULLA~ J.-This is an appeal against the judgment and order of the High Court of Punjab with the certificat~ of the Court granted under s. 66A(2) of the Indian Income-tax Act. The Hoshiarpur Central Co-operative Ba.nk, Ltd., Hoshia.rpur, hereinafter referred to ns the Bank, is the appellant, and the Commissioner of Income-tax, Simla, is the respondent. For the assessment yea.rs 1948.49 and 1949-50, the lncome.ta.x Officer included in,the asse~sment of the Bank certs.in income which ha.d accrued t.o the Ba.nk as profits from trading in cont- rolled commodities like suga.r, cloth, kerosene, etc., which the Ba.nk wa.s allowed to deal in, with the app- roval of the Registrar of Co-operative Societies con- veyed in a letter dated September 28, 1954. The Bank claimed exemption under a. notification issued under s. 60 of the Income-tax Act, but the contention was not accepted. On appeal, the Appellate Assista.nt Commissioner reversed the decision, which, on further appeal, was reversed by the A ppella.te Tribunal, Delhi Branch. The Appellate Tribunal, however, raised, 1 S.C.R. SUPREME COURT REP,ORTS 109 and referred the following question to the High Court under s. 66(1) of the Income-tax Act: "Where a co-operative Bank deals in sugar an
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