9911796707
TMI Blog2010 (12) TMI 1170X X X X Extracts X X X X X X X X Extracts X X X X ..... cation in Form No.10A and 10G on 24.02.2009. The society was formed on 25.1.1991 and also registered under the Tamil Nadu Societies Registration Act, 1975 vide certificate dated 29.11.2005. The objects of the society as stated in the amended bye-laws include women welfare through micro-credits. The objects at Sl. Nos. 10 to 15 are regarding activities which deal with micro financing activity which had been reproduced by the Commissioner in his order and we also think it fit to reproduce the same below:- 10. To raise loans from banks or authorized sources for lending micro loans to women self help group members. 11. To avail loan facility from banks or other government authorized bodies or sources of women entrepreneurship assistanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-SHG borrowers to the tune of ₹ 6,27,770/-. The society was instrumental in lending funds to 2700 members of various SHGs. From these facts, the Commissioner was of the opinion that the assessee-society had indulged itself in the activity of business and commerce by lending micro finance to both SHG and non-SHG borrowers and therefore, section 2(10) of the Act was attracted. It was also perused from the details that the assessee had charged ₹ 24,48,852/- from SHGs for arranging loan from banks and has shown the miscellaneous income of ₹ 1,23,612/- because the society was borrowing from Indian Bank at the rate of 13.5% per annum on diminishing basis and in turn, advancing the same to SHGs at the rate of 15% per annum. Besi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial help extended by the society, 2700 members would not have obtained the loan. They would have been under the mercy of private moneylenders who will be charging prohibitive rate of interest. 5. The CIT would have looked into any violation of law or discrimination in extending the financial help. On the contrary, he has come to a wrong conclusion that extending financial help is a business activity. 6. The society activity partake the character of RELIEF TO THE POOR and does not fall in the ambit of business activity. 5. We have heard the rival submissions. After carefully considering the arguments on both sides and various evidence and documents filed before us, we find that the activities carried on by the society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. Proof of this is enclosed in paper-book. The contention of the learned A.R. is that the society had been applying all its receipts for the execution of various projects for the advancement of rural women below the poverty line. It was submitted in the rival submission that Tamil Nadu People Welfare Association, Pallapatty, Dindigul District engaged in micro credit management for women self-help group has also obtained registration under section 12AA vide C.No.464/10/98-99 dated 25.04.2000 and approval under section 80G vide C.No.102/10/CIT II/2008-09 dated 09.04.2009 valid upto 31st March, 2011. Keeping all these facts and circumstances of this case, we are of the considered opinion that the assessee-society is engaged in extending fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to pay many times higher interest than what the assessee has charged. It is also not in dispute that the assessee incurs financial costs for obtaining loans from banks. The assessee also have to make payment towards salaries and other administrative activities of the trust. There is nothing on recod to suggest that the assets and income of the trust were available for the personal benefit of the trustee and the board members. These are only used for micro credit to poor women for their poverty alleviation and for the benefit of the socioeconomically weaker sections of the society. The A.O. has not substantiated its findings that the work of the trust is not charitable and the interest charged by the assessee is exorbitant. The A.O. placed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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