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2016 (9) TMI 846 - AT - Income TaxGrant of registration u/s 12AA refused - determination of object of a trust - Held that:- If the predominant object of a trust or institution is charitable and in the process of achieving that object some activity of commercial nature generating income is carried out, which again is utilised for the advancement of its charitable objects, it cannot be inferred that the trust or institution is not established for charitable purposes. Moreover, the issue of applicability of the proviso to section 2(15) has to be examined at the stage of assessment while adjudicating the assessee’s claim of exemption u/s 11 of the Income Tax Act, 1961 and hence it is not germane at the time of considering the issue of granting registration u/s 12AA. Though the first proviso to sec. 2(15) of the Act excludes any activity of the nature of trade, commerce or business from being considered to be a charitable purpose but, the second proviso to section 2(15) restricts the application of first proviso only to such trusts and institutions having receipts from commercial activity exceeding a prescribed limit in a particular previous year. Therefore, the application of the proviso to section 2(15) has to be looked into in every assessment year. In our considered view, the first proviso to section 2(15) will have no role to play in the matter of granting registration and the role of the Ld. DIT (E) is restricted to him being satisfied that the objects are genuine and charitable. In absence of any such finding by the Ld. DIT (E) in this instant appeal, we hold that the benefit of grant of registration has been denied to the assessee without any cogent reason and hence while allowing the assessee’s appeal we direct the Ld. DIT (E) to grant registration to the assessee u/s 12AA of the Act. - Decided in favour of assessee
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