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2015 (1) TMI 1109 - ITAT DELHIRegistration under section 12A declined - assessee is not engaged in charitable activity within the meanings of that expression under section 2 (15) - Held that:- An activity would be considered "business" if it is undertaken with a profit motive, but in some cases this may not be determinative. Normally the profit motive test should be satisfied but in a given case activity may be regarded as business even when profit motive cannot be established/proved. In such cases, there should be evidence and material to show that the activity has continued on sound and recognized business principles, and pursued with reasonable continuity. There should be facts and other circumstances which justify and show that the activity undertaken is in fact in the nature of business. There has to be, therefore, something more than mere charging a fees by an institution which can demonstrate that activity undertaken is in the nature of business, and the onus of demonstrating that fact is on the revenue authorities. The reason for this onus is simple; nobody can be expected to prove a negative, as was held by Hon’ble Supreme Court in the case of K P Varghese Vs ITO [1981 (9) TMI 1 - SUPREME Court], and the assessee cannot, therefore, be asked to prove that the assessee is not carrying on an activity with business motive. A perusal of the impugned order, however, indicates that the only reason for which the assessee is held to be pursuing business activity is charging of fees and there is no other legally sustainable finding to support that conclusion. In view of these facts, as also bearing in mind, we are of the considered view that the learned Director of Income Tax (Exemptions) was indeed in error in rejecting the registration under section 12 A, as sought by the assessee. We, therefore, direct the learned Director to grant the registration under section 12A. - Decided in favour of assessee.
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