Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 513 - AT - Income TaxExemption u/s 11 - Denial of registration to the assessee trust u/s 12AA - charitable activity u/s 2(15) - primary and the dominant object of the assessee society is to provide medical relief to poor and needy people and not to carry out any such activities for the purposes of earning profit - HELD THAT:- The act of charging of fees for such services cannot by itself diminish the very objectives of setting up of the assessee society which is clearly for charitable purposes and not for purposes of profit. Such fees are towards recovery of cost of providing the ambulance services in terms of driver salary and regular maintenance, wear/tear etc and nominal surplus which get generated from such activities are again utilized for the purposes of its charitable activities. The act of undertaking charitable activities cannot at all times be expected to be undertaken from grants and donations and where as part of undertaking the charitable activities, the assessee is charging certain fees to recoup its cost and make its charitable activities self-sustaining, the same cannot lead to a conclusion that the very nature of its activities have lost the character of charity and such activities are undertaken for earning profits. Where as part of rendering of such activities, it recovers certain nominal fees to meet its operational and administrative expenses, the same will not disqualify it from being involved in carrying on charitable activities. As a settled position that the proviso to section 2(15) applies only if an institution is engaged in advancement of “any other object of general public utility” and postulates that such an institution is not "charitable" if it is involved in carrying on any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business for a cess, fee or any other consideration. In the instant case, the assessee society is carrying out charitable activities in the field of medical relief to the poor and needy section of the society and not in the field of general public utility and thus, the proviso to section 2(15) is not applicable and thus cannot be invoked. There are enough safeguards provided in the Act including by way of section 11(4A) to monitor the activities of the assessee society and the Revenue is at liberty to examine the same during the course of regular assessment proceedings - as far as the objects of the assessee society are concerned, the same are clearly charitable in nature and the assessee society therefore deserve to succeed in seeking registration u/s 12AA - Appeal of the assessee is allowed.
|