Commissioners of Inland Revenue v Yorkshire Agricultural Society
| Jurisdiction | England & Wales |
| Date | 1928 |
| Court | Court of Appeal |
NO. 632.-HIGH COURT OF JUSTICE (KING'S BENCH DIVISION).-
COURT OF APPEAL.-
Income Tax - Exemption - Charitable purposes - Income Tax Act, 1918 (8 -9 Geo. V., c. 40), Section 37 (1) (b).
The Respondent Society was formed in 1837 for the purpose of holding an annual meeting for the exhibition of farming stock, implements, etc., and for the general promotion of agriculture. The objects of the Society also included, inter alia, the improvement of live stock, poultry, implements, etc., the demonstration of methods and processes connected with agriculture, horticulture, etc., agricultural education and scientific research. In 1923 the Society added to its objects the function of watching and advising on legislation affecting the agricultural industry. The Society was not incorporated and had no deed of trust. Its income consisted mainly of entry fees and gate receipts at the Annual Show, members' subscriptions, and investment income. The expenditure was
mainly on the Show, on the yearly Journal and on administration. Any excess of income over expenditure was invested and any loss incurred on a Show was met by the sale of investments. No provision was made in the rules for the disposal of the Society's funds in the event of winding-up. In 1926 members numbered about 3000. Ordinary members paid an annual subscription of £1 and were entitled, inter alia, to free admission to the Society's Shows, to reduced rates for exhibiting and for certain services, and to receive a free copy of the yearly JournalThe Society claimed exemption from Income Tax in respect of the income from its investments for the year 1922-23. The claim was refused by the Commissioners of Inland Revenue, but was allowed by the Special Commissioners, on application to them under Section 19 of the Finance Act, 1925.
Held, that the Society was established for charitable purposes only, and that it was entitled to exemption in respect of its investment income.
Stated under the Finance Act, 1925, Section 19 (3), and the Income Tax Act, 1918, Section 149, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the King's Bench Division of the High Court of Justice.
1. At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held on the 2nd June, 1926, we heard the claim of The Yorkshire Agricultural Society (hereinafter called "the Society"), for exemption from Income Tax under Section 37 (1) (b) of the Income Tax Act, 1918, in respect of the income from the investments of the Society for the year ended 5th April, 1923. The claim was made on the ground that the Society was established for charitable purposes only.
2. The Society made a claim for exemption from Income Tax to the Commissioners of Inland Revenue under the provisions of Section 19 (1) of the Finance Act, 1925. The Commissioners of Inland Revenue refused the claim and the Society thereupon made an application in the prescribed form to have the claim heard and determined by the Special Commissioners under the provisions of Section 19 (2).
3. The following facts were admitted or proved:-
(a) The Society was formed at a meeting held at York on the 10th October, 1837. The following resolutions (inter alia) were passed at this meeting:-
"That a Society be formed called "The Yorkshire "Agricultural Society", the object of which shall be to "hold an annual meeting for the exhibition of farming "stock, implements, etc., and for the general promotion "of agriculture".
"That every subscriber of £1 annually be a member of "the Society".
"That all the prizes shall be open to competition in the "United Kingdom".
(b) The Society is not incorporated and has no deed of trust.
(c) A complete copy, marked "A", of the minutes of the meeting is annexed hereto and forms part of this Case.(1)
(d) The present objects of the Society are as follows:-
(e) The holding of an Annual Show for the exhibition of live stock, poultry, farm produce, horticultural produce, also of machinery, implements, tools, appliances, utensils, etc. connected with or appertaining to agriculture; such Annual Show to be held successively in different parts of the County.
(f) The improvement of live stock, poultry, implements, machinery and appliances in connection with agriculture.
(g) The demonstration of methods and processes connected with, and the furtherance of the interests of agriculture, horticulture, arboriculture, apiculture and allied industries.
(h) Agricultural education.
(i) Scientific research and experimental work.
(j) The watching and advising on legislation affecting the agricultural industry and the improvement, assistance, and promotion of agriculture generally.
(k) Watching and advising on legislation affecting the agricultural industry was an object added at a meeting of members of the Society held in 1923. Previous to that alteration in the objects it had been forbidden to introduce any subject connected with legislative enactment at any meeting of the Society.
(l) The following provisions are made in the Rules of the Society:-
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6. Members of the Society shall be elected by the "Council from persons, firms, companies, or associations, "who shall have signified their desire to become Members "by signing the Society's Form of Application for Membership "and shall have paid the required subscription. "In the case of firms only one Member of the firm, in "the case of companies only one Director, and in the case "of associations only one Member shall be entitled to "nominate or vote for Members of the Council and the "Riding in which the principal office or place of business
"of the firm, company, or association is situate shall be "the Riding to which such right of nomination and voting "shall be applicable, unless such firm, company or "association shall pay a separate subscription in respect "of each Riding in which it holds a qualification, in which "case such firm, company, or association shall be "entitled to nominate and vote for candidates in each "Riding in respect of which they pay a subscription. 9. The following subscriptions shall constitute Membership "of the Society after election by the Council:-
"A Vice-President not less than £50 as a Life "Member, or not less than £5 as an Annual Member.
"An Ordinary Member not less than £15 as a Life "Member, or not less than £1 as an Annual Member.
"A Lady Member 10s. as an annual Member, which "subscription entitles the Subscriber to all the privileges "of Membership, with the exception of making entries "at the Annual Show at Members' rates.
"After payment of not less than 20 Annual Subscriptions "a Member may become a Life Member of "the Society by the payment of £8.
"Annual subscriptions shall become due and shall be "payable by Members in advance on the 1st day of "January in each year, and so long as the Annual "Subscription is continued to be received by the "Society the Subscriber shall enjoy all the privileges of "Membership.
"In all cases where a Member wishes to withdraw "from Membership of the Society, notice in writing to "that effect must be given to the Secretary on or before "the 31st day of December in any year, otherwise the "Annual Subscription becoming payable as set out "above on the 1st day of January following will be "claimed as due to the Society.
10. A Member of the Society whose subscription is "not in arrear shall have free Admission to all Exhibitions "of the Society, and reduced entry fees for his exhibits, "and shall be entitled to other privileges as may from "time to time be arranged by the Council of the Society.
(m) The present privileges of Members of the Society are as follows:-
(2) To free admission to the Great Yorkshire Shows of the Society.
(3) To free admission to the unreserved parts of the Grand Stand.
(4) To purchase tickets for the reserved seats at a considerably reduced rate.
(5) To use the Members' Dining, Reading and Writing Rooms on the Show Ground.
(6) To reduced rates of exhibits in the Society's Shows.
(7) To nominate and vote for the election of Members of the Council.
(8) To receive a free copy of the "Journal" annually.
(9) To have manures and feeding stuffs analysed at reduced fees.
(10) To attend and vote at general meetings of the Society.
(11) To receive a copy of the "Journal of the Ministry of Agriculture -Fisheries" every month, at the reduced rate of 4s.6d. per annum, post free.
(12) To benefit by any special railway facilities for the Show which may be in force.
(13) To free admission to the Stand at the Working Dairy.
(14) To free admission to the Hound Show.
(15) To free admission to the Horticultural Exhibition on the Show Ground, and to any other Department where an extra charge is in force.
(16) To apply for District Prizes that may be offered.
14. In order to be entitled to make entries at the "Annual Show at Members' rates, an Exhibitor must "have paid at least two Annual Subscriptions as a "Member of the Society, including the Subscription for "the current year, or, if he be a new Member, the Exhibitor "must have paid a Subscription for the current "year and also a subscription for one year in advance.
"No Member whose Subscription is unpaid shall be "qualified to make an entry for the Annual Shows of the "Society nor be allowed to exhibit as a Non-subscriber.
(n) A copy, marked "B", of the Objects and Rules of the Society is annexed hereto and forms part of this Case.(1)
(o) There is no provision in the Rules for the disposal of the funds of the Society in the improbable event of the Society being wound up.
(p) In pursuance of the objects of the Society a Show has been held annually since its foundation for the exhibition of live stock, dairy produce, garden produce, implements, etc. Lectures and demonstrations on dairying subjects, bee-keeping and other matters of interest to the agricultural community are given at the Show...
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