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2015 (10) TMI 8 - AT - Income TaxRegistration under sec. 12AA denied - whether the assessee trust are innumerable in number and idealistic in character and, therefore, such conglomeration of objects is vague that the objects could not be considered as real and practical? - Held that:- In order to cope with the priorities of the future it has to become necessary for trusts and such other institutions to state their objects in very many words encompassing all fields of charitable endeavours. It is not necessary that a trust should carry on all and every one of its stated objects. It is sufficient that a trust carries on selected number of objects stated in its charter. In the present case, out of a number of declared objects, the assessee trust may be pursuing only one or two viable objects and may advent upon other objects as and when the circumstances permit. Therefore, stating a large number of objects in the trust deed does not disentitle the assessee from claiming the status of a charitable trust. It is only sufficient to look into whether the actual activities carried on by the assessee trust are coming under any of the objects stated in its trust deed. We find that the first ground raised by the Director of Income-tax(Exemptions) may not be sustainable in law. Whether certain objects mentioned in the trust deed of the assessee, are of commercial in nature and, therefore could not be treated as activities for charitable purpose as per the proviso to sec.2(15)? - Held that:- When the assessee trust contemplates to organize milk societies for facilitating sale of milk, the underlying intention is to get good price for the milk sold by the villagers and also to encourage them to rear their own milch animals. The villagers can earn a decent livelihood by engaging themselves in rearing of milch animals and selling of milk without middlemen and exploitation, through the societies formed under the guidance of the assessee trust. This is the same case with other proposed activities like ginning, spinning, fruit processing etc., where labour of the village women-folk could be fruitfully deployed, to keep away exploitation.The economic activities in the above nature cannot be treated as activities in the nature of trade, commerce or business as contemplated in proviso to sec.2(15). Therefore, we find that the Director of Income-tax(Exemptions) has characterized the activities of the assessee trust as commercial in nature without going into the circumstances in which the activities are contemplated to be carried on by the assessee trust. The assessee trust has not so far carried out any substantial activities as proclaimed by them, for want of funds. It is stated that the trust is in the process of collecting funds to accomplish its objectives. Therefore, it is not possible now to say whether the activities carried on by the assessee are outside the purview of charitable activities or not. The conclusion of the Director of Income-tax(Exemptions)is premature. The assessee trust is qualified for registration under sec.12AA - Decided in favour of assessee.
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