The interpretation of Section 2 (15) of the Income-tax Act, 1961, indicates that the advancement of an object of general public utility must not involve the carrying on of any activity for profit to qualify as a charitable purpose.

( 1 ) IN this income-tax reference under Section 256 (1) of the Income-tax Act, 1961, the following question of law has been raised for an answer by this court:"whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the activities carried on by the assessee from which it derived, (a) arbitration fees, (b) fees for certificate of origin, and (c) its share of profit from Messrs. Calcutta Licensed Measurers, were not activities carried on for profit within the meaning of Section 2 (15) of the Income-tax Act, 1961, and, accordingly, the income derived from such activities was exempt from tax under Section 11 of the Income-tax Act, 1961 ?"

( 2 ) THE facts raising this controversy are as follows: the assessee is the Indian Chamber of Commerce. The assessment year is 1964-65 and the corresponding accounting year is the year 1963. The assessee-company was registered under Section 26 of the Indian Companies Act, 1913, and was permitted to omit the word "limited" from its name.

( 3 ) THE income on which the tax is questioned arises in this case from three different sources. The first is the arbitration fees. The second is the fees for certificate of origin. The third source arises from the share of profit of the assessee which arises in the following way. Formerly, the Chamber had a measuring department where it used to undertake all types of weighment and measurements for the benefit of the traders in general for which it charged fees. The Bengal Chamber of Commerce, a sister concern, had also a similar department. By an agreement dated the 20th March, 1962, the two chambers of commerce agreed to carry on the business formerly carried on by the two chambers in their measuring departments in partnership under the name and style of Messrs. Calcutta Licensed Measurers on and from the 1st April, 1962.

( 4 ) THE Income-tax Officer found that, apart from receipts by way of admission fees, members' subscription, affiliation and other receipts which were not assessable as no specific services were rendered in respect thereof, the assessee-chamber had derived income from these three sources. The chamber's return for 1964-65 showed profit of Rs. 1,58,690, comprising gross receipts from, (i) arbitration fees amounting to Rs. 4,792, (ii) fees from certificate of origin amounting to Rs. 4,552, (iii) miscellaneous receipts of Rs. 208, and (iv) share of income from M/s. Calcutta Licensed Measurers amounting to Rs. 1,69,779. After deducting expenses of Rs. 47,641, the net profit of Rs. 1,58,690 was arrived at. The Income-tax Officer held that the income derived by the assessee from arbitration fees, fees for certificate of origin and the share of profit from Messrs. Calcutta Licensed Measurers, was assessable to tax. He was of the opinion that in the definition of "charitable purpose" in Section 2 (15) of the Income-tax Act, 1961, the words "not involving the carrying on of any activity for profit" had been introduced and as the aforesaid activities of the assessee constituted activities for profit the surplus received from these sources were taxable income in the hands of the assessee. He determined such taxable income at Rs. 1,58,482.

( 5 ) ON appeal by the assessee-chamber the Appellate Assistant Commissioner substantially agreed with the decision of the Income-tax Officer that these activities were activities for profit and the income derived therefrom would constitute business income taxable under the Income-tax Act, 1961. The Appellate Assistant Commissioner, however, accepted the alternative contention of the assessee that the losses brought forward from the previous years should be set off against business income for this year.

( 6 ) ON the assessee's appeal to the Tribunal, however, the Tribunal allowed the appeal by applying the decision of the Supreme Court in Commissioner of Income-tax v. Andhra Chamber of Commerce,. On an analysis of the objects in the memorandum and a