Per Pramod Kumar, Accountant Member. - Under section 254(3) of the Income-tax Act, 1961, Hon’ble President had constituted a Special Bench, in this case, to consider the following questions :

"(1)Whether the object of the assessee trust is an object of general public utility under section 2(15) of the Income-tax A6t, 1961 ?

(2)Whether, the provisions of section 11(4A) introduced with effect from 1-4-1984 are applicable to assessee’s case ?

(3)Whether, the provisions of sub-section (4A) of section 11, as substituted by Finance (No. 2) Act, 1991 with effect from 1-4-1992 are clarificatory in nature and are hence applicable to the assessment years involved in these appeals?

(4)If the answer to the first question is in affirmative, does the earning of substantial profit by the assessee affect its status as a trust existing for an object of general public utility and consequently the claim for exemption under section 11, and if so, to what extent, in the light of the judgment of Supreme Court in the case of Addl. CIT v. Surat Art Silk Cloth Manufacturers Association (121 ITR 1)."

2. The Special Bench so constituted, vide order dated 22-10-2003, adjudicated Question Nos. (2) and (3) against the assessee and observed that ‘in view of this decision, Question Nos. (1) and (4) have now become academic for the years under consideration’. A rectification petition was filed by the assessee pointing out that the ground numbers (1) and (4) needed to be dealt with on merits and cannot be dismissed as merely academic , inter alia, for the reason that this aspect of the matter was ‘never argued or discussed before the Special Bench’. To that extent, and vide order dated 15-2-2006, order dated 22-10-2003 was recalled for the limited purposes of disposing of question numbers (1) and (4) on merits. In the meantime, all the Members constituting the original Special Bench have been transferred out of Mumbai Benches, and, accordingly, the Members constituting this Special Bench were nominated to hear the recalled matter and dispose of question numbers (1) and (4) on merits.

3. It is in the backdrop set out above that we come to be in seisin of the matter to deal with the following two questions :—

"Whether the object of the assessee trust is an object of general public utility under section 2(15) of the Income-tax Act, 1961?

If the answer to the first question is in affirmative, does the earning of substantial profit by the assessee affect its status as a trust existing for an object of general public utility and consequently the claim for exemption under section 11, and if so, to what extent, in the light of the judgment of Supreme Court in the case of Addl. CIT v. Surat Art Silk Cloth Manufacturers Association (121 ITR 1)."

4. So far as these two questions are concerned, the materials developments are like this. The assessee is a trust established in June 1942. Right from the assessment year 1943-44, it is engaged in the activity of publication of newspapers and periodicals: The question whether this activity can be said to be of ‘general public utility’, and, accordingly, covered by exemption under section 4(3)(i) of the Income-tax Act, 1922, travelled up to the Income-tax Appellate Tribunal in the assessment year 1943-44 itself. The Tribunal, vide order dated 2-1-1946, held that the trust existed for charitable purposes. That finding was, it is important to bear in mind, in the context of the provisions of section 4(3)(i) of 1922 Act in which the limitation of ‘not involving the carrying on of any activity of profit’ did not exist, as later found place in the corresponding section of 1961 Act, i.e., section 2(15). It was because of this paradigm shift in Income-tax Act, 1961, that the exemption was denied to the assessee for the assessment years 1962-63 onwards. The Tribunal, dealing with the assessment years 1962-63 to 1971-72, declined to accept the assessee’s con-tention that the object of the Trust did not involve carrying on of any activity for