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2021 (10) TMI 1252 - AT - Income TaxExemption u/s 11 - denial of registration u/s 12AA - Proof of charitable activities u/s 2(15) - main/ primary object of the trust/ institution - whether activities undertaken by the assessee do not fall within the definition of Section 2(15) of the Act? - HELD THAT:- It is evident that the objects of the assessee trust meant for benefit of pharma dealers would undoubtedly fall within the fourth limb of Section 2(15) of the Act i.e. ‘the advancement of any other object of general public utility’ which has been held to be very wide in its connotation in several judicial pronouncements noted above. The assessee society in the instant case is stated to be engaged in promotion of trade and commerce related to pharma business, protecting the rights and interests of its members, making its members aware about their duties, conducting seminars and workshops and organizing awareness camps and educating them about health and safety, cleanliness and also creating awareness about the legal provisions and duties and obligations under Income Tax Act and other laws to help them becoming a law abiding citizens. In this background, we are of the opinion that endeavors of the assessee society tantamounts to advancement of public utility and hence making such objects charitable in nature and susceptible to s.2(15). The object beneficial to a section of the public is also an object of general public utility. Hence, the case of the assessee gets covered in the fourth limb of Section 2(15) of the Act i.e. ‘the advancement of any other object of general public utility’. This being so, the assessee would be entitled to the benefit meant for charitable trust as contemplated in the scheme of the Act. Other objection of the CIT(E) that assessee society has purchased the land and distributed the same to its members by way of 99 years of lease - merely leasing of developed plots to its members on the basis of their respective contributions does not make the assessee ineligible for registration as a charitable entity per se. No merit in the contention of the CIT(E) that land purchased by the society is not appearing in the balance sheet. As pointed out on behalf of the assessee, the land purchased by the assessee society has been duly disclosed in the Schedule ‘A’ ‘Land and Land Development’ of the balance sheet and thus disclosed in a particular manner. While the assessee is a mutual concern and operating on the principles of mutuality, this by itself would not place any embargo for registration under s.12AA of the Act and to avail associated benefits under s.11 & s.12 of the Act having regard to CBDT Circular No. 11/2008 dated 19.12.2008 coupled with the decision of All India Rubber Industries Association vs. Addl.CIT & Ors. [2018 (10) TMI 1172 - ITAT MUMBAI] The objects of the assessee society when read in the light of judicial precedents expounding the law in this regard, the conclusion is inescapable that the objects of the assessee is for charitable purpose within the meaning of Section 2(15) of the Act and the assessee is entitled in law for registration under s.12AA - Decided in favour of assessee.
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