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2020 (9) TMI 919 - AT - Income TaxExemption u/s 11 & 12 - Assessee failed to qualify as an organization for charitable purposes - charitable activity u/s 2(15) - assessee association is receiving some charges or fees for rendering services on non- commercial principles to State Road Transport Undertakings and other concern members for a fee or charges - HELD THAT:- There is evidence and material to show that the activity were carried out on sound and recognized business principles and persuaded with reasonable continuity then it would constitute business even if there is no profit motive as we have already noted that in assessee's own case for A.Y. 1989-90, 1990-91 and 1993-94 [2000 (12) TMI 225 - ITAT DELHI-E] it was held that the aims and objects of the assessee were to render common services to members and assist them in such matters as standardization of equipment, purchase of materials for thereon use at economical prices, promotional efficiency of Road Transport Services and deduction is operational cost of member State Road Transport Undertakings are the activities of charitable purpose towards promotion of main objects set out in the Memorandum of Association of the assessee association, thus, in absence of any substantial allegation or incriminating material. We are unable to accept view of the CIT that the assessee association is conducting these activities with the main object of earning profits. In the present case, the activities of the assessee's association cannot be termed either "trade" , "commerce" or "business" simply because the assessee association is receiving some charges or fees for rendering services on non- commercial principles to State Road Transport Undertakings and other concern members for a fee or charges. As Indian Trade Promotion Organisation vs. DGIT [2015 (1) TMI 928 - DELHI HIGH COURT]wherein it was held that thus, first proviso to section 2(15) of the Act would have been to be read down and interpreted in the context of section 10 (23C) (iv) of the Act as the context requires such interpretation where assessee is not driving primarily by desired or motive to earn profit but to pursue activities in furtherance of its objects of general public utility then it must be recognized as an institution established for charitable purposes. Hon'ble Delhi High Court in the case of Institute of Chartered Accountant of India vs. DGI [2011 (9) TMI 77 - DELHI HIGH COURT] held that the object of the first proviso to section 2(15) of the Act is to include any transaction for a fee or money and the activity would be business if it is undertaken with the profit motive but in some cases this fact must be determinative and the profit motive test should be specified and viewed in the context of section 10 (23C) (iv) - Decided against revenue.
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