9911796707
TMI Blog2014 (1) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same were not permissible for grant of registration as charitable institution. Further, the applicant trust had shown Navaratri Utsav Income of Rs.2,19,853/-, Rs.3,83,366/- and Rs.5,98,302/- during the financial years 2009-10 to 2011-12 which seemed to be tainted with commercial motive. The applicant had not submitted any evidence of conducting the cooking classes and even the said activity could not be said to be charitable activity. Even the applicant had earned income of Rs.6,00,317/-, Rs.7,26,209/-, and Rs.6,52,205/- during financial years 2009-10 to 2011-12 by renting of utensils at concessional rates which indicates that the same was more of a commercial than charitable activity. He further observed that the 'Sanatorium' being run by the assessee at Lonawala was in fact a guest house being run by the assessee for commercial purposes. He further observed that a "Sanatorium" literally is an establishment for treating chronic diseases or convalescents. However, the assessee was not providing any medical facility to the visitors. From the records it established that the assessee in fact was running a guest house in the garb of sanatorium. 3. Before us, the ld. Representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 80G or any other such or similar provision in the Income Tax Act 1961 and of any replacement or reenactment or modification thereof for the time being in force shall apply and the intention is that any donation thereto recognized as eligible for exemption or relief from tax as regard to the donor under Income Tax Act, 1961, the Gift Tax Act 1958 and the Expenditure Tax Act, 1957 and any such or similar Legislation for the time being in force in India. c) The main aim of the Mandal is to promote cooperation amongst public at large and cr5eate an awareness among them and to elevate social , values and education level amongst the general public and to participate in nation building work and to extend help to poor people (Male and Female) and to spread education amongst them. d) To Celebrate National and Cultural Festivals (Utsav) every year. e) To extend Medical help to the general public at large. f) To give educational help to boys and girls & make arrangement for their progress in education. g) Relief of Poverty in such manner as the managing Committee may think. h) To purchase, construct to take on rent a multipurpose hall with or without guest house and to maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile rejecting the application of the assessee, the DIT(E) wrongly observed that the assessee trust was carrying on commercial activities rather the perusal of the objects of the trust reveals that the assessee was carrying out charitable activities. The celebration of the Ganesh Utsav and Navratri Utsav was not religious activity but the cultural activity only. The same is celebrated by holding various programs including drawing competition among children and holding of Drama etc. The evidence in the shape of vouchers for cooking material expenses was enough to prove the activity of holding the cooking classes. Further that the DIT(E) wrongly gave a restricted and narrow meaning to word 'Sanatorium'. The said facility was availed of by the persons requiring convalescent and clean air at the 'sanatorium'. The sanatorium was used by small families during the year 2012- 13 aggregating 1300 persons. He has further contended that the assessee is entitled to be registered as a charitable trust, its objects being falling in the category of charitable purpose as per definition of charitable purpose given u/s. 2(15) of the Income tax Act. He has further contended that assuming that the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s" has been defined under section 2(15) of the Act. To be more clear and for the sake of convenience, section 2(15) of the Income tax Act is reproduced as under: "2.(15) "Charitable Purpose" includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity. Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is ten lac rupees or less in the previous year" 7. A perusal of the above reproduced section 2(15) of the Act reveals that the definition is an 'inclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest, if the commissioner is otherwise satisfied about the charitable nature of the objects and genuineness of the activities of the concerned trust /institution. 8. Now coming to the facts of the present case, the assessee during the financial years 2009-10 to 2011-12 received Navaratri Utsav Income of Rs.2,19,853/-, Rs.3,83,366/- and Rs.5,98,302/- respectively and further income of Rs.6,00,317/-, Rs.7,26,209/-, and Rs.6,52,205/- from renting of utensils at concessional rates. Apart from that during the financial year 2010-11, the total receipt from alleged 'sanatorium' at Lonawala was Rs.16,82,315/- and for F.Y. 2011-12 was Rs.20,66,256/-. Further the receipts from Ganpati Utsav for F.Y. 2011-12 were Rs.40,034/-. So far the previous year i.e. F.Y.2011-12 is concerned, the total receipts of the assessee were Rs.598302.00 + Rs.652205.00 + Rs.2066256.00 + Rs.40034.00 which comes out to be Rs.33,56,797/- which was much more than the prescribed limit of Rs.10,00,000/-. None of the activities of the assessee-trust, from which the income was received, falls in the definition or scope of the purpose of relief of the poor, education, medical relief, preservation of environment (includin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose' as per the relevant provisions/definitions given under the Act, then, such institution would not be entitled to tax exemption or benefits granted under the Act. Even despite the fact that such an institution, otherwise, is carrying out charitable activities. Further dealing with the question as to whether the registration of the Assessee as a charitable institution is liable to be cancelled because of the reason that the total receipts exceeded the limit of Rs.10.00 lakhs as provided under the second proviso to section 2(15) of the Act, it has been observed by us in the said case as under : "In our view the word "previous year" mentioned in the second proviso to section 2(15) is more relevant. It has not been mentioned that the first proviso, which as observed is a rigorous proviso, will not apply if the total receipts from the charitable activities exceeds the limit of Rs.10.00 lacs during "any year" rather, the word is "previous year". That means the benefits will not be available to the Assessee for the assessment year in which the gross receipts of income exceeds the limit of Rs.10.00 lacs, however, that does not mean that such benefits will not be available to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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