2015 (1) TMI 876 - HC - Income Tax

Registration u/s.12A - assessee imparting of occupational training of stitching and embroidery for women by charging fees - Held that - Tribunal correctly held that charging nominal fee for providing training in stitching and embroidery for rural women, the dominant purpose of the assessee trust is to uplift the status of rural women, which, is charitable activity within the meaning of section 2(15) of the Incometax Act. Therefore, grant the registration u/s.12A of the Incometax Act, 1961 to assesssee is acceptable.- Decided in favour of assessee.

Summary

Issues:
1. Appeal against rejection of registration u/s.12A of the Income Tax Act, 1961.
2. Whether activities of imparting occupational training of stitching and embroidery for women by charging fees qualify as charitable activities under section 2(15) of the Act.
3. Justification of the Income Tax Appellate Tribunal's decision to grant registration u/s.12(A) to the assessee Trust.

Analysis:
1. The appeal was filed against the rejection of registration u/s.12A of the Income Tax Act, 1961. The assessee, engaged in running a training institute for stitching and embroidery for women, applied for registration u/s.12A on 19.03.2013. The Commissioner of Income Tax (CIT) rejected the application, deeming the activity as commercial and not charitable. The appeal challenged this decision.

2. The main issue was whether the activity of imparting occupational training of stitching and embroidery for women by charging fees could be considered charitable under section 2(15) of the Act. The Appellate Tribunal noted that the trust provided free raw materials and training to rural women to make them self-sufficient. Despite charging a nominal fee, the dominant purpose was to uplift rural women, aligning with charitable activities as per the Delhi High Court's precedent.

3. The Tribunal's decision to grant registration u/s.12(A) to the assessee Trust was based on the objective of uplifting rural women through training. The Tribunal relied on the Delhi High Court's judgment, emphasizing that charging nominal fees for such training did not negate the charitable nature of the activity. The High Court concurred with the Tribunal's view, citing the Delhi High Court's precedent as governing the issue at hand. Consequently, the appeal was dismissed as no substantial questions of law were found.

This detailed analysis outlines the core issues raised in the appeal, the arguments presented, and the rationale behind the Tribunal's and High Court's decisions, providing a comprehensive overview of the legal judgment.