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TMI Blog2015 (7) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... ny account with the post office savings bank. Apart from the other investments as prescribed there under. Thus, we find that the objects under sub-clause-i to l are charitable in nature and cannot be termed as non-charitable The assessee is not found to be involved in the activity of profit and the objects of the assessee are all only to achieve the main objects to provide education, learning, training facilities to the students of all branches of education. Therefore, all these ancillary objects included in the object clause of the assessee are found to be for the purpose of achieving and furtherance of the main objects than, these ancillary objects and acts to attain the main object cannot be held as non-charitable in nature The impugned order rejecting the registration u/s 12AA of the IT Act on the ground that the objects mentioned in the sub-clauses i to l of clause-4 of the trust deed are not charitable in nature is not sustainable and accordingly, the same is set aside. However, the assessee has not filed the relevant record, as required u/s 12AA of the Act to satisfy the authority concerned about the genuineness of the activity. We accordingly, direct the CIT to re-con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. The CIT rejected the application for registration u/s 12AA of the Act, while passing the impugned order on the ground that some of the object of the trust mentioned in sub-clauses-(i),(j),(k),and (l)of clause-4 of the trust deed are not charitable in nature. 4. Before us learned AR of the assessee has referred to the objects of the assessee trust and submitted that the objects of the trust includes to provide education, learning, training facilities to students of all branches of education by all means possible. To achieve this main object of providing learning, training facilities to students of all branches the objects in clause-4 of the assessee also include to establish, start promote maintain, support run guide schools, colleges, institutes training centres, research centres and all centres of learning and to education right from basic preparatory and primary education upwards to the highest echelons of learning in all branches and fields of knowledge. The learned AR has submitted that the sub-clause-i, j, k l contain the objects and acts to achieve main object of the assessee and therefore, these objects are very much charitable in nature. He has referred sec.11((1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at some of the objects of the applicant mentioned at subclauses i,j,k l under clause-4 of the Trust Deed were not charitable in nature as they pertain to acquisition of property, acceptance of gifts, alienation of property by sale and investment of money in banks. In view of this, office show cause letter dated 22.04.2014 the applicant was offered an opportunity under the proviso to sec.12AA(1)(b)(ii) of the IT Act, 1961 to show cause why an order rejecting its application should not be passed. In response, the applicant has filed a letter dated 29.04.2014. However, the non-charitable objects have not been deleted from the Trust Deed. In view of the above, I am not satisfied about the objects of the Trust. I am constrained to dismiss the application for registration u/s 12AA. Consequently, the above application dated 30.04.2014 stands rejected. Sd/- (LAKSHMI HANDE PURI) CIT, MANGALORE To M/s Assisi Education Trust Bagambila, Deralakatta P.O 575 018 7. It is clear from the order that the sole objection raised by the CIT is non-charitable nature of the objects mentioned in the sub-clauses i,j,k l of clause-4 of the trust deed. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st from the objects of the assessee that even the objects under sub-clause i to l cannot be said to be non-charitable in nature, when these objects are clearly for achieving and in furtherance to the main objects of the assessee trust to provide education, learning, training facilities to the students in all branches of education. The CIT has not disputed the objects of the assessee as per the other sub-clauses are charitable in nature. We further note from the clause 7(vi) of the trust deed these objects of investments are required to be in conformity with sec.13 r.w.s.11(5) of the IT Act. Therefore, these objects are strictly in consonance with the provisions of sections 11 12 of the IT Act. We find that sec.11(1A) permits the income from voluntary contribution made with a specific direction that this shall form part of corpus. Similarly, sec.12(1) permit any voluntary contribution received by the trust created solely for charitable or religious purpose. Thus, receiving the contribution, donation or gift which is to be used for the stated purpose cannot be termed as a non-charitable object of the assessee. Sec.11(1A)(a) further, provides that for the purpose of sub-sec.1 a capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of an object of general public activity; and (ii) that purpose must not involve the carrying on of any activity for profit. The first condition does not present any difficulty and, as we have already pointed out above, it is fulfilled in the present case, because the primary purpose of the assessee, namely, promotion of commerce and trade in art silk yarn, raw silk, cotton yarn, art silk cloth, silk cloth and cotton cloth is clearly advancement of an object of general public utility. But the real difficulty arises when we turn to consider the applicability of the second condition. What do the words not involving the carrying on of any activity for profit, mean and what is the nature of the limitation they imply, so far as he purpose of advancement of an object of general public utility is concerned . 9. Thus, it is clear that the assessee is not found to be involved in the activity of profit and the objects of the assessee are all only to achieve the main objects to provide education, learning, training facilities to the students of all branches of education. Therefore, all these ancillary objects included in the object clause of the assessee are found to be for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RC (1947) 27 Tax Cases 409: (1948) 16 ITR (Supp) 41 (HL) TC23R. 194, that all objects of general public utility were not necessarily charitable, and that while some may be so others may not. The law in India under the Indian IT Act, 1922, was not in congruency with the English law of charity in as much as by including those words in its statutory definition the Indian law extended the expression charitable purpose to an area beyond that covered by the English law. In other words, purposes recognized as charitable purposes under the English law, they extended also to objects which were not accepted as charitable under the English law. Apparently, when framing the IT Act, 1961. Parliament considered it appropriate to cut down the wide scope of these words by qualifying them with the restrictive words not involving the carrying on of any activity for profit. This was done to emphasize that the residual general head was to be confined to objects which were essentially charitable in nature. It is therefore, clear that the words not involving the carrying on of any activity for profit govern the words the advancement of any other object of general public utility and not the words relief ..... X X X X Extracts X X X X X X X X Extracts X X X X
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