Assessee-company was incorporated by YRIPL as its fully owned subsidiary after having obtained approval from the Secretariat for Industrial Assistance for purpose of economisation of the cost of advertising and promotion of YRIPL franchisees as per their needs . Approval was granted subject to certain conditions as regards functioning of assessee, whereby it was obligated to operate on a non-profit basis on principles of mutuality . However, assessee-company undertook a commercial venture wherein contributions were accepted both from members as well as non-members. The assesse filed its returns stating the income to be “Nil” under the pretext of the mutual character of the company. The same was not accepted by the AO   Order of AO is up held by the CIT (A) Tribunal and also High Court .  On appeal the Supreme Court held that   the doctrine of mutuality bestows a special status to qualify for exemption from tax liability. It is a settled proposition of law that exemptions are to be put to strict interpretation. If the assessee fails to fulfil the stipulations and to prove the existence of mutuality, the question of extending exemption from tax liability to the assessee, that too at the cost of public exchequer, does not arise. Taking any other view would entail in stretching the limits of construction. (CA NO. 2847 of  2010, Dt. 24/4/2020)  (AY.2001 -02 )