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2019 (5) TMI 1797 - AT - Income TaxExemption u/s 11 - denial of exemption on surplus as per Income & Expenditure A/c under the head Income from business & profession - Assessee working solely in the field of education for the deprived and under-privileged children since its inception in 1987 - assessee society has been registered u/s 12A as a charitable society and its objects and activities falls in the last limb of definition under section 2(15) i.e, advancement of any object of general public utility as the assessee society is engaged in ancillary activities which are supporting out of the school children - HELD THAT:- Merely having a surplus is not an indicator of carrying out business activities, rather the real test is the dominant and purposive test which has been satisfied in the instant case where the intention is not to earn such surplus/profits but to carry out educational activities for the benefit of underprivileged children belonging to socially and economic weaker sections of the society and as part of such activities, where such surplus is generated and used for furthence of such educational activities, the assessee society doesn’t loses its character of being charitable society engaged in educational activities. Objects so envisioned and activities of the assessee society are directed towards education of the socially and economically under-privileged children either directly imparting education through its network of Bodhshalas or by way of collaborating/partnering with the government and other non-governmental organizations/institutions and not to earn any profits. Incorrect to classify the objects and activities of the assessee society as objects and activities in nature of general public utility. The proviso to section 2(15) which can be invoked in case of objects of general public utility therefore doesn’t apply and thus cannot be invoked in the instant case. The consequent action of the Assessing officer in withdrawing the exemption claimed by the assessee society u/s 11 & 12 is hereby set-aside and the matter is decided in favour of the assessee society.
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