Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (6) TMI 318 - AT - Income TaxRegistration U/s.12A canceled - whether assessee is not a charitable organisation as it is engaged in the business activity as a commercial concern and that it is a contractor to the Government of Andhra Pradesh - Held that:- In the present case the DIT (E) has not established that the conditions (a) and (b) mentioned in section 12AA(3) of the I.T. Act are attracted. Therefore, order of the DIT (E) improper relying on the decision of the Tamil Nadu Cricket Association vs. DIT (E) Madras (2013 (12) TMI 833 - MADRAS HIGH COURT ). Also Director of Income Tax has proceeded to hold that if business is carried on by a charitable organisation, it will forfeit its exemption. The assessee is producing nutritious food to supply the ready-to-eat food to pregnant women, undernourished children and lactating mothers. The organisation is fulfilling its objects by supplying food so produced to the beneficiaries for the implementation of schemes promoted by the Women & Child Welfare Department of the Government of Andhra Pradesh and other such related programmes. The nutritious food produced by the assessee is not sold in the commercial market nor it is supplied to the parties other than the beneficiaries under the schemes referred to above. It cannot be referred to as a contractor to the Government of Andhra Pradesh as it is involved in manufacture and supply of the food to the beneficiaries. Only, the supervisory activities are carried on by the Government of Andhra Pradesh, in bringing out schemes for the benefit of the beneficiaries and fixing a suitable price to meet the cost of manufacturing and other overheads. Thus, there is no prohibition in the Act that a charitable institution should not indulge in any business activity. The only restriction is that it should conform to the provisions of subsections 4 & 4A of section 11 of the I.T. Act and the activity should come within the provisions of section 2(15) defining the charitable purposes.For the reason given above, we set aside the impugned order of the ld DIT (E) - Decided in favour of assessee.
|