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TMI Blog2016 (11) TMI 1361X X X X Extracts X X X X X X X X Extracts X X X X ..... pose. Therefore, the view of the ld. CIT that society has charged hefty fees from students and hence, operating commercial activities is wrong and not supported by any material on record. The finger raised by ld. CIT on the activities of appellant society and its aims and objects being not charitable is, therefore, based on no good reasons relevant for refusal to grant registration. Therefore, in view of several decisions relied on by the ld. Counsel for the assessee and in the attending facts of the case, we direct the ld. CIT to grant registration u/s. 12A and approval u/s. 80G of the Act as prayed for. X X X X Extracts X X X X X X X X Extracts X X X X ..... o be decided on merits. The ld. CIT referring to the definition of 'Charitable purpose' rejected the applications of appellant by observing as under : "3. The definition of 'Charitable Purpose' as given in the Income Tax Act, 1961 is reproduced below :- "Charitable purpose includes relief of the poor, education, medical relief, [preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l society which is interested in approval for registration u/s 12AA of the Income Tax Act, 1961. The provisions of sec 11 and 12 do not envisage that a charitable institution shall provide charity by charging fees from public. The fee received is outside the scope of sec 11 and 12 and shall, therefore, be taxable. Fees imply direct involvement of consideration for the service rendered. Fees cannot be voluntary and are, therefore, taxable under the head profit and gains of the business or profession. The educational institutions run by the society charged hefty fees and earn systematic profit year to year to enhance its earning capacity through the acquisition of buildings & other fixed assets. Thus, the society is running its institutions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee society and its activities are charitable qualifying for the registration. Several other decisions have also been relied upon on the issue. 5. The ld. DR, on the other hand, relied on the order of the ld. CIT and submitted that the activities of the assessee were found to be commercial in nature and therefore, the CIT rightly rejected the applications of the assessee. 6. We have heard the rival contentions and have gone through the entire material available on record and we find no justification to support the orders of the ld. CIT refusing to grant registration u/s. 12A and approval u/s. 80G of the Act. It appears that the conclusion reached by the ld. CIT that the assessee trust is profit oriented business entity and not a charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alysis of above financial statements, we find that the nominal surplus amounts shown above remained with the society and not distributed amongst its. The appellant society has charged fees from students, but the same has been utilized for running of school for education purpose. Therefore, the view of the ld. CIT that society has charged hefty fees from students and hence, operating commercial activities is wrong and not supported by any material on record. The finger raised by ld. CIT on the activities of appellant society and its aims and objects being not charitable is, therefore, based on no good reasons relevant for refusal to grant registration. Therefore, in view of several decisions relied on by the ld. Counsel for the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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