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TMI Blog2018 (8) TMI 2099X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and the assessee-association deserves benefit u/s 11/12 of the Act. We, therefore, do not find any reason to interfere with the findings of the first appellate authority. Appeal filed by the Revenue is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ot allowed to the assessee by the Assessing Officer. The Assessing Officer further mentioned that the registration granted to the assessee u/s 12A (1) of the Income Tax Act by the DIT (Exemptions Delhi) clearly stated that such registration does not automatically examined the income of the trust/association and that the taxability of the income shall be examined and decided by the Assessing Officer on the basis of activity carried out from year to year. Thus, the Assessing Officer made addition of ₹ 1,72,82,290/- by denying the benefit of exemption u/s 12A of the Income Tax Act as well as not allowing the claim for deprecation. 5. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee. The Revenue has filed the present appeal before us. 6. The Ld. DR submitted that the Assessing Officer has rightly made additions and disallowed claim for deprecation as the activities of the assessee involved rendering of service in relation to carrying on commerce or business and hence proviso to Section 2(15) is applicable in this case. The Ld. DR further submitted that the Hon'ble Delhi High Court in case of DIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral 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 (twenty five lakh rupees) or less in the previous year]. 18. This proviso was added only in respect of the last limb of the provisions of Sec. 2(15) which relates to the advancement of any other object of general public utility shall not be a charitable purpose if it involves carrying on of an activity in the nature of trade, commerce or business for a cess or fee. The second limb is not relevant to the fact under consideration. A close perusal of the aforementioned proviso shows that the spirit of the section is same as per the section 2(15) as it stood prior to the amendment brought by Finance Act, 1983 as mentioned hereinabove. 19. All that has to be decided now i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the first three limbs of Sec. 2(15) i.e. relief of the poor, education or medical relief. Consequently where the purpose of a trust or institution is relief of the poor, education or medical relief, it will constitute charitable purpose, even if it is incidentally involves the carrying on of commercial activity. The Board further clarified that "the newly inserted proviso to Sec. 2(15) will apply only to entities whose purpose is advancement of any other object of general public utility i.e. 4th limb of the definition of the charitable purpose contained in Sec. 2(15). The Circular further clarified "in the final analysis, whether the assessee has for its objects the advancement of any other object or general public utility is a question of fact. If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in relation to trade, commerce or business, it would not be entitled to claim that its object is charitable purpose. In such a case, the object of general public utility will be only a mask or device to hide the true purpose which is trade commerce or business or the rendering of any service in relation to trade, commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the light of the amendment brought o Sec. 2(15) of the Act as the institute was charging fees for conducting coaching clauses and making huge money in a systematic and organized manner. Considering the facts in the light of the amended provisions of Sec. 2(15), the Hon'ble Delhi High Court held that the order denying the exemption was not valid. 28. Reliance by the ld. DR on various decisions to buttress his submissions are misplaced in as much as the dominant activity cannot be brushed aside lightly even after the amendment. 26. After considering the entire facts in totality in the light of discussion hereinabove and also drawing support from the speech of the Finance Minister and subsequent clarification issued by the CBDT within the framework of amended provisions of section 2(15) of the Act, in our considered opinion, there was no material which may suggest that the assessee association was conducting its affairs solely on commercial lines with the motive to earn profit. There is also no material which could suggest that the assessee association has deviated from its objects which it has been pursuing since past many decades. In our humble opinion and understanding of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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