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2014 (10) TMI 219 - AT - Income TaxWithdrawal of registration of Trust Activities charitable or not - scope of section 2(15) The JDA was established in October, 1982 by JDA Act - Purpose of JDA is for planning, coordinating and supervising for proper, orderly and rapid development of the areas in Jaipur region, in which several government departments, local authorities and other organization are at present engaged within their own jurisdictions to provide also that such authority be enabled either itself or through other authority to formulate and execute plans, projects and schemes for the development of Jaipur region - housing, community facilities, civic amenities and other infrastructure are properly created for the population of Jaipur region in the prospective of 2001 AD or thereafter including the intermediate stage and to provide for matters connected with the purpose - The intention of the institution is not to earn profit but recover the cost of the establishment as well as other expenditure to implement the object of the JDA - The State Government also give the grant to it - The intention and manner of the assessee was not to earn profit. Held that:- the amendment made in Section 2(15) is effective from 2011-12 as clarified by the CBDT in its circular - in case where the predominant object of the activity is to carry out charitable purpose and not to earn profit, it does not lose its character of charitable purpose merely because some profit arises from such activities - money earned from business held under trust or otherwise, to feed the charity would not disentitle or negate the claim of engagement in charitable purpose defined u/s 2(15) of the Act - CBDT circular No. 11/2008 emphasized that 2008 amendment is only applicable to residual category, charitable entity when it carries on any activity in the nature of trade, commerce or business, on any activity and to determine whether such activity is commercial will be decided on its own facts and no generalization is possible. Keeping in view of the charitable activity test, it was held that business activity of the assessee is integral to its charitable purpose and question of requirement of separate books of account for the business activity seems redundant Following the decision in M/s GS1 India Versus Director General of Income Tax (Exemption) And Another [2013 (10) TMI 19 - DELHI HIGH COURT] - proviso to Section 2(15) of the IT Act is to cover those, which under the garb of general public utility carry on business on commercial activities to escape the liability under the Act gaining exemption U/s 11 of the Act, the section applied on such type of trust or institution who get registration U/s 12A of the Act for claiming the exemption U/s 11 of the Act - assessee is a government agency and engaged in the coordinate and planned development of Jaipur region and which is predominant object of it - CIT also erred in applying the provisions of Section 293(c) of the Act, which applied withdrawal of approval granted under any provision of this Act, notwithstanding that a provision to withdraw such approval has not been specifically provided for in such provision - For cancellation of registration, the specific provision U/s 12AA is provided - CIT was no right to withdraw the registration of the appellant from AY 2009-10 thus, the order of the CIT(A) is to be set aside and the Registration is granted to JDA Decided in favour of assessee.
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