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TMI Blog2012 (11) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... to have granted approval. (c) DIT(E) ought to have appreciated the fact that there are no sales and the collection is only by way of participation fee only by Members of the Society and public at large, erred in rejecting the application. (d) Your appellant object for the denial of the approval on the ground that wrong address was given without affording an opportunity to explain the same or gather the correct particulars. Your appellant submits that the present address as on the date of application was given. 3. Brief facts of the issue are that the assessee filed an application for registration u/s. 12AA of the Act on 19.10.2011. The DIT(E) called for details of specific points and documents and books of account and bills and vouchers for verification. On verification of the documents the DIT(E) found that in Form No. 10A and bye-laws of the society, registered office of the society is mentioned that it is situated at 4th Floor, Plot Nos. 6/2 and 6/3, Huda Techno Enclave, Hightec City, Madhapur, Hyderabad-81. However, as per the certificate issued by the Registrar of Societies, the address of the society was mentioned as Vijaypuri, ECIL Post, Hyderabad-61. 4. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 16,000 Membership fee 27,000 Participant fee-receipt Hyd Marathon 2011 22,80,506 27,53,538 27,53,538 27,53,538 Gross Profit b/f. 27,53,538 6. From the above financial statement for the financial year 2011-12, it is seen that under direct income a sum of Rs. 2,44,425 is shown as collection from Auroville Marathon 2012 and a sum of Rs. 22,80,506 from participant fee-Receipt-Hvd-Marathon 2011. The Hyderabad Marathon was conducted on 28th August, 2011. The receipts from fees etc., from both the Marathons i.e., Auroville Marathon & Hyderabad Marathon during the financial year 2011-12 were to the extent of Rs. 25,24,931 i.e., more than Rs. 25 lakhs. As may be seen from that financial statement, the total receipts in the hands of the above society from sale of T-shirts and from fees etc., received from both the above Marathons, during financial year 2011-12, were exceeding Rs. 25 lakhs. Since, the assessee society has shown the entire such receipts as direct income under the major head 'Sales account', in that statement and the activities in case of the society are fully in the nature of advancement of any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spanning five continents and sometimes its members have gone on to do a podium finish. The assessee operates through an online group with 1100+ runners and growing each day with the aim of making running as the most preferred form of fitness activity in the twin cities. The society has been bringing out to the general public at large the awareness, benefit and advantages of running. The offline activities include four running and fitness related activities. It is an ancient, scientific and profound belief that daily running improves the body fitness and mental stability. Even today most of the training centres like Military Training, , Police Training, and various residential training centres start their day only with running/jogging for at least about 2-3 km to keep them physically and mentally fit. It is an undisputed fact that jogging is one form of running and marathon is an advanced and technically higher level of jogging. The marathon is a long-distance running event with an official distance of 42.195 kilometres (26 miles and 385 yards) 9. The AR submitted that it is also a known fact that marathon is a sport by itself and the popularity is evident by the fact that there ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riterion of completing a full marathon once in years and also a half marathon in every calendar year. (2) Associate Members - It consists of online members of the group who have been active and do plan to take part in the regular offline weekly and other activities. There is no criterion for it apart from paying an annual fee which is yet to be finalized. Currently the core members are spending money on their own to keep the activities of the group going seamlessly. (3) Corporate Members - Since the group has been set up with the idea of making distance running as the most preferred form of fitness activity, the group has been contemplating approaching corporate bodies to help spread distance running as a form of activity as part of the individual and corporate wellness programmes. The proposed membership centre will concentrate on a corporate signing up with Hyderabad Runners Society to develop a wellness programme based on running and also training for 10K, Half-Marathons and Full-Marathons and also the number of people who have signed up for such a programme. Since the group has been evolving over the last few years and since there are no full time staff for this, a membership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial without there being an iota commercial activity. Any surplus from the activities also would be applied only for development of popularity of endurance running as a daily exercise. The membership is open to members of general public who are interested in participating in the activities, without any restrictions. Even on the winding up of the society, all its assets remaining after settlement of all its liabilities shall not be distributed amongst the members but shall be handed over to any other similar organization registered as charitable organization under the provisions of section 12A and other applicable provisions of Income Tax Act. Therefore, all the conditions generally required for registration of society for general public utility have been complied with. The AR prayed that approval under section 12A may be granted. 13. The AR also drew our attention to a decision of Andhra Pradesh High Court in the case of CIT v. Andhra Pradesh Riding Club [1987] 168 ITR 393, wherein the High Court held that "Assessee club engaged in promoting horse riding among section of the public being open to general public and its income being utilized for those activities, is said to be carryi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under that sub-section from the stage at which they were on that day. (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) section 12A. (3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard:" 16. Section 12AA of the Act confers power on the commissioner while considering the application for registration of a trust or institution made under the same provisions to call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of the activitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April, 2009 and will accordingly apply in relation to the asst. yr. 2009-10 and subsequent assessment years. In the memorandum explaining the provisions of the Finance Bill, it has been mentioned as under for bringing the amendment to the definition of the charitable purpose : "Sec. 2(15) of the Act defines 'charitable purpose' to include relief of the poor, education, medical relief, and the advancement of any other object of general public utility. It has been noticed that a number of entities operating on commercial lines are claiming exemption on their income either under s. 10(23C) of s. 11 of the Act on the ground that they are charitable institutions. This is based on the argument that they are engaged in the 'advancement of an object of general public utility' as is included in the fourth limb of the current definition of 'charitable purpose'. Such a claim, when made in respect of an activity carried out on commercial lines, is contrary to the intention of the provision. With a view to limiting the scope of the phrase 'advancement of any other object of general public utility', it is proposed to amend s. 2(15) so as to provide that 'the advancement of any other object of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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