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TMI Blog2015 (11) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... chieving the main purpose was profitable in nature. Hence the finding of the Director of Income-tax (Exemption) has mentioned in the object clause-17 under the said Incidental Objects under Part-B of the MOA at para-5 of his order stating it to be non-charitable does not disentitle the assessee for availing exemption u/s 12 of the IT Act. See India Trade Promotion Organization Vs Director General of Income-tax [2015 (1) TMI 928 - DELHI HIGH COURT] - Decided in favour of assessee. - ITA No.1386(BNG.)/2014 - - - Dated:- 30-9-2015 - SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER For The Assessee by : Shri K. Kiran Kumar, Advocate For The Revenue by : Smt. Chandana Ramachandran, CIT-III ORDER PER SMT ASHA VIJAYARAGHAVAN, JM: This appeal is by the assessee is directed against the order of the DIT(E), Bangalore dated 17-09-2014 for the assessment year 2014-15. 2. The facts of the case are that M/s Printech Park Cluster, Bangalore had filed an application in Form No.10A on 24-03-2014 seeking registration u/s 12A of the Act, 1961. The Association of Group of Persons and it has been registered with the Registrar of Societies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intain infrastructure and other common or special facilities for the welfare of employees of industries. Clause(2) page:5 Create infrastructure facilities or upgrade infrastructure facility needed for development of the industries and business establishments in Bangalore including Harohalli industrial area either directly or through Bangalore cluster, KSPA or any other similar association and to take all steps needed in this regard. The issues before us, to be addressed are the following ; 1) whether in case of the trust/society created for the advance of general public utility it is necessary that objects should be benefit to the public at large or it would be that object beneficial to a section of pubic would be an object of general public utility, as defined u/s 2(15) of the IT Act, 1961. 2) Genuineness of the activities of the trust has been commented upon by the DIT(E) at para-6 of his order. The issue whether at the time of granting registration u/s 12A, the DIT(E) can go into the genuineness of the activities of the trust. 3) Whether the society is not driven primarily by desire or motive to earn profits, but to do service for the advancement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2008, dated 19th December, 2008 . Furthermore, in the Memorandum regarding Delegated Legislation Rationalization and Simplification Measures, it has been noted as under;- Streamlining the definition of charitable purpose Section 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 section 10(23C) or section 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 it 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 section 2(15) so as to provide that the advancement of any other object of gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order stating it to be non-charitable does not disentitle the assessee for availing exemption u/s 12 of the IT Act. The relevant portion of the decision of Kolkata Bench of the ITAT in the case of Indian Chambers of Commerce (2014) 52 Taxmann.com 52 (Kolkata-Trib) is reproduced here under; The concept behind section 28(iii) is to cut at the mutuality principle being relied on in support of a claim for exemption, when the assessee was actually deriving income or making profit as a result of rendering specific services for its members in a commercial way. The reason for the introduction of section 28(iii) is to ignore the principle of mutuality and reach the surplus arising to the mutual association and this is clear from the ITA No.739 of 2014 IP India Foundation, Hyderabad fact that these provisions are confirmed to services performed by the association for its member s. Such income would either be charged as business income or under the residual head, depending upon the question whether the activities of the association with the non-members amount to a business or otherwise, section 28(iii) constitutes certain income of the association to be business income without a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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