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2018 (5) TMI 134 - ITAT AMRITSARRegistration u/s. 12AA - charitable activities or busniss activities - Sukhmani centers - formation of societies to take full advantage of the E-Governance in all citizens related services, providing for the same through a single window mechanism in an integrated fashion - society is to run on a self-sustaining basis - Held that:- The society is to operate on the self-sustaining principle. The same itself implies being run on sound business principles in-asmuch as it would ensure recovery of cost – which is not subject to any competitive pressure of the market, and a reasonable margin. Outsourcing is to be through the tendering process. A part (and not insubstantial) of the revenue generated is also to be given to Punjab E-Governance Society (refer object clauses 4(f),(g) & (h)). Fixing of the rate with the approval of the State Government, thus, would not detract from the fact that the activity is being run on sound business principles and, further, envisaged with reasonable continuity. The revenue comes from different avenues, which includes the sale of statutory forms. As such, nothing turns on the fact, as argued, that but for this, the business (undertaking) would not have returned a surplus (profit), which argument is though valid for only two years. How, one may ask, the sale of forms be ignored, which is an integral part of the assessee’s undertaking? In fact, the service rates, which are in addition to the statutory fee being charged by the Government, could be increased at any time, of course following the procedure for the purpose. It is, as explained, the ability to produce profit from the stated/pursued (set of) activity/s, that is relevant. In our view, therefore, the assessee is undertaking business and, accordingly, is hit by the second proviso to section 2(15) of the Act. SEE Sukhmani Society for Citizen Services, Mansa [2012 (11) TMI 947 - ITAT AMRITSAR] - Decided against assessee.
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