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2016 (9) TMI 855 - AT - Income TaxExemption claimed u/s. 11(1)(a) denied - activities of milching animals - Held that:- It is an admitted fact that the assessee is not in any way involved in a trade, commerce or business. Nor does it carry out any activity in relation thereto since providing medical, maternity, nursery, fertility and vaccination facilities to bovine milch animals belonging to milk producers in lieu of collecting cess @ 12 paisa per liter of the milk produced. Both the ld. lower authorities are fair enough in not disputing genuineness of all these research and development activities. Its objects forming part of the lower appellate order pages 7 to 9 along with the receipts in question do not indicate any trading, commercial or business activity element. The assessee is already a registered body within the meaning of a charitable trust u/s. 12A of the act. We are only dealing with impugned exemption proceedings. The Assessing Officer takes note of the fact that the appropriate authority has denied assessee’s status of a research association u/s. 35(1)(2) of the act. We fail to concur with this line of reasoning as section 35 rejection order denying deduction of expenditure on scientific research stands on a totally different footing as against the impugned exemption proceedings. We make it clear that we are dealing with section 2(15) r.w.s. 11 of the Act wherein the only issue is that of the assessee being engaged in charitable activities in furtherance to its charitable objects followed by application of income in furtherance thereto. We accordingly are of the opinion that both the lower authorities have wrongly rejected assessee’s exemption claim by invoking section 2(15) proviso of the act, since it neither carries out any activity in the nature of trade, commerce business nor any activities or renders any service in relation to the same whilst collecting the impugned cess @ 12 paisa per liter from milk producers in lieu of making them avail the above stated facilities. The assessee’s activities hereinabove in making available the facilities in question to milching animals are to ensure that they are free from diseases, their breed improvement and overall well being. We apply all the above stated constitutional provisions and case law to conclude that ‘medical relief’ in section 2(15) of the act very much includes the above referred relief made available by the assessee to the milch animals in lieu of a nominal cess @ 12 paise per litre. We reiterate that we are dealing with a charitable purpose definition clause in a tax statute to be given a broader interpretation in order to give its full effect. We hold that assessee’s activities deserve to be treated under the former specific category of ‘medical relief’ not covered by sec. 2(15) proviso inserted w.e.f. 01-04-2009 in question. It is accordingly held to be not an entity advancing any other object or general public utility without prejudice to our findings hereinabove - Decided in favour of assessee
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