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2014 (9) TMI 267 - AT - Income TaxCancellation of registration of Trust u/s 12AA(3) – Charitable purpose or not u/s 2(15) – Held that:- The assessee trust is carrying on these activities since its inception and was allowed exemption/registration u/s. 12AA of the Act and is also a notified trust u/s. 10(23C)(iv) of the Act - The CBDT Circular No. 11/2008 dt. 19.12.2008 has explained the implications arising from the amendment brought to the provisions of Sec 2(15) of the Act - The CBDT clarifies that the newly inserted proviso to Sec. 2(15) will not apply in respect of the first three limbs of Sec. 2(15) i.e. relief of the poor, education or medical relief - even the CBDT does not lay down any guidelines for determining whether the entity is carrying on any commercial activity - the fundamental or dominant function of the Trust is to provide asylum for old, maimed, sick, dry, weak, disabled and stray animals and birds, more particularly cows and other such milk cattle and to bring about improvement in breeding cattle for the beneficial promotion, upkeep, maintenance and propagation of cows. Thus the dominant object is to run Panjrapole and the activities related to it. The Trust is engaged in multi series activities of diverse nature but the primary and the dominant activity is Panjrapole - The predominant object of Panjrapole activity has been held to be a charitable purpose in Commissioner Of Income-Tax, Gujarat Versus Swastik Textile Trading Company Pvt. Limited [1977 (7) TMI 30 - GUJARAT High Court] – the trust would not loose its character of charitable purpose merely because some profits arises from the activity of the sale of milk - Such activity cannot be carried on in such a manner that it does not result in any profit - It be indeed be difficult for persons in-charge of a trust or institution to carry on the activity such that the expenditure balances the income and there is no resulting profit - there was no material which may suggest that the assessee-trust was conducting its affairs solely on commercial lines with a motive to earn profit - There is also no material brought on record which could suggest that the assessee trust has deviated from its objects which it has been pursuing since last 130 years, the proviso to Sec. 2(15) of the Act is not applicable on the facts of the case and the assessee deserves continuance of registration u/s. 12AA of the Act – the DIT(E) is directed for the continuance of the registration – Decided in favour of Assessee.
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