GENTLE, J.

1. THE General Family Pension Fund was incorporated under the Indian Companies Act, 1882, on 17th Aug., 1906 ; it is a company limited by guarantee ; it has no share capital and its members are confined to persons who are subscribers for grants of pension and annuities and who hold entrance certificates ; the liability of each member is limited to a nominal sum of Rs. 5 ; since it complied with the provisions of s. 26 of the above Act, a licence was granted by the Bengal Government permitting the company to be registered without the word "limited" being included in its name.

2. THE objects of the company, as contained in its Memorandum of Association, inter alia are:--

3.(a) To acquire and take over as a going concern and to carry on and conduct and continue the objects of an existing unincorporated association or institution called the General Family Pension Fund founded and formed for the purpose of carrying on any business that has for its objects the acquisition of gain within the meaning of s. 4 of the said Act (Indian Companies Act, 1882). (b) To grant terminable pensions or annuities dependent on human life or any other event or contingency in favour of any subscriber and/or any nominee or nominees (within the categories therin mentioned) of a subscriber to the funds of the company. (d) To grant invest and deal with the moneys of the company not immediately required. (g) To pay out of any of the company 's funds all expenses of management of the company's business and objects.

4. THE income and property of the company whensoever derived shall be applied solely towards the promotion of the business and objects of the company as set forth in the Memorandum of Association and no portion thereof shall be paid or transferred directly by way of dividend or bonus or otherwise by way of profit to the members of the company. Provided that nothing therein contained shall prevent (i) payment of specified salaries and wages and (ii) ............ granting to any member a pension or annuity. It is conceded by the CIT that the company carried on the business of a life assurance company. THE Indian Life Assurance Companies Act, 1912, applies to all persons or bodies of persons, whether corporate or incorporate, (therein referred to as life assurance companies), who carry on such business within British India except, inter alia, to any fund which the Governor-General in Council may, by notification, exempt from the operation of the Act. By Notification No. 7345-97 dt. 13th Sept., 1913, the General Family Pension Fund was exempted from the operation of that Act. It is also conceded by the CIT that the transactions between the company and its members are mutual dealings and that income-tax is not assessable upon the surplus of the members' subscriptions ; this concession was made in pursuance of the decision in New York Life insurance Co. vs. Styles (1889) 14 App Cas 381 the principles of which, it is admitted, apply in India. It is convenient hereafter to refer to the General Family Pension Fund as 'the Fund'.

This reference is concerned with the assessments for the years 1937-38 and 1938-39. Since they are in respect of years prior to the passing of the Indian Income-tax (Amendment) Act, 1939, the provisions of the Indian IT Act, 1922 (hereinafter called 'the Act'), as enacted before the Amendment Act of 1939, will apply to this reference.

3. THE questions referred for the opinion of this Court are :--

1. Whether the decisions of the Asstt. CIT, Calcutta, for the years 1928-29 to 1935-36 are binding upon the ITO upon the principles of res judicata or otherwise ? 2. Whether the income, profits and gains of the General Family Pension Fund for the year ending the 31st Dec., 1936, should be assessed under r. 25 of the Indian IT Rules in the form then in force ? 3. If the answer to (2) is in the affirmative, whether in applying the said r. 25, from the surplus so ascertained, the Fund is at liberty to appropriate its non-mutu