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2023 (9) TMI 93 - AT - Income TaxExemption u/s 11 - Charitable activity u/s 2(15) - appellant registration u/s 12A as rejected on the ground that the revenue earned by the Council is from commercial activities - HELD THAT:- The Council is established under an Act by the State Government for Para-medical education and to promote, develop and regulate the same for the welfare of the society and the public health, with no intent of any business. It has been noted that the surplus is not distributed and only utilized for the activities and the fees/charges are decided in consultation with the State Government at normal level looking to the welfare of the public. CIT (Exemption) in his order has mentioned that the receipts are from examination fees, registration fees, revaluation fees, inspection fees and counseling fees, which are commercial in nature whereas apparently such receipts are from the key services for education only. In this way the contents are contradictory neither it has been brought on record that they are abnormally high with an intent to earn profit on commercial lines nor the same has been established that how they are not related to education in the instant case. In view of the arguments made by the ld A/R, supra, the surplus cannot lead by itself that the activities are from trade, commerce or business. There can be a revenue surplus in particular year/s which is allowed to be applied in the next year(s) as permitted under the Act. The un-applied amount becomes the income of the assessee after the end of the time-limit. Since, the proviso to section 2(15) is, otherwise, also not applicable as the activities are not in the nature of trade, commerce or business. Thus the object of the appellant Council qualified as charitable purpose and covered u/s 2(15) as applied by the appellant and given that there is no dispute on the genuineness of the activities carried on by the assessee Council in furtherance of its object, the order passed by ld. CIT (E) is hereby set aside and directed to grant the registration to the appellant Council under section 12AA as applied by them. Appeal filed by the assessee is allowed.
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