TMI Blog2009 (8) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity by the assessee trust. It is an undisputed fact that the assessee trust has been granted registration under s. 80G(5), registration under s. 12A, has been approved under s. 10(23C)(iv) as has been analyzed in detail above in this order. Therefore, we fail to understand as to how the CIT taking undue advantage of the amended definition of s. 2(15) w.e.f. 1st April, 2009 has rejected the renewal application filed by the assessee trust under s. 80G(5). - Application for renewal accepted - decided in favor of assessee. - - - - - Dated:- 10-8-2009 - Member(s) : N. L. DASH., V. K. GUPTA. ORDER-N.L. DASH, J.M.: This is an appeal preferred against the CIT-II, Nagpur for his order passed under s. 80G(5) of the IT Act on the following grounds: "1. The learned CIT-II, Nagpur erred in not giving reasonable and sufficient opportunity and passed order rejecting renewal application under s. 80G(5) of IT Act. 2. Learned CIT erred in holding that the assessee's activity does not fall within the definition of charitable purpose as amended from 1st April, 2009. 3. Learned CIT failed to see and appreciate that the activities carried on by the assessee did not at all amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of untouchability. 4.1 After the death of Mahatma Gandhi in due course, it became a great historical monument for the country, nation and people outside India believing in Gandhian philosophy. His disciples and followers maintained Ashram with his ideology and got the same registered with Asstt. Registrar of Societies under the Societies Registration Act, 1860 i.e., on 12th Feb., 1968 (Registration No. 188/68-Wardha). Apart from the Ekadasha Vrat or 11 tenets propounded by Bapuji, the Ashram aimed of fulfilling the object of the trust by collecting donation and giving donations, spending money, taking loan with or without interests, mortgaging property or purchasing or selling property in order to impart training on various realms like library, agriculture, cow maintenance and protection, promote Khadi, village home industry, village development, naturopathy Asan, Pranayam, Yog Sadhana, etc. These were regularly carried on by the said trust from year to year. It was further learnt that the trust was also registered under s. 12A of the IT Act, 1961 and said registration still continues. 80G registration is also continued as per the certificate of registration issued by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndhiji's autobiography and books written by others on Gandhian ideology. Every year at an average 2 lakhs visitors visit the Ashram. They wish to purchase lot of books on Gandhian literature and by this process there is a propagation of Gandhian thoughts and Gandhian philosophy. The Sahitya Bhandar sell and distribute this type of books by having a stall inside the Ashram. They exhibit the books there in order to facilitate the visitors to purchase the books of their own choice. Sevaks or Sadhaks of the Ashram while engaged in Sahitya Bhandar activities never go out of the Ashram to sale books nor they are engaged in such type of business. Sometimes there is a surplus on this head as was in the year ending 31st March, 2006 amounting to Rs. 29,200. 7. Yatri Niwas takes care of stay of visitors, hold conference, the visitors are charged nominal rate ranging from Rs. 30 to Rs. 80 per day. They are allowed to take food at nominal rate. No outsider is allowed to stay in the Yatri Niwas nor any outsider is allowed to purchase food item from the Yatri Niwas. The Yatri Niwas meant to take care of the visitors and facilitate them with affordable stay and fooding. In the year ending 31st M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o that Act in force in any part of India or under s. 25 of the Companies Act, 1956 (1 of 1956), or is a university established by law, or is any other educational institution recognised by the Government or by a university established by law, or affiliated to any university established by law, or is an institution financed wholly or in part by the Government or a local authority; and (vi) in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the CIT in accordance with the rules made in this behalf: Provided that any approval shall have effect for such assessment year or years, not exceeding five assessment years, as may be specified in the approval." Sec. 12A is also quoted below: "12A. (1) The provisions of s. 11 and s. 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely: (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the CIT before, the 1st day of July, 1973, or before the expiry of a period of one year from the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institution established for charitable purposes which may be approved by the prescribed authority having regard to the object of the fund or institution and its; importance through out India or through out any state or states............" Sec. 2(15) defines "Charitable purpose" includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility. 9. The CIT has rejected the application under s. 80G on the ground that the assessee trust is hit by the proviso to s. 2(15). The learned senior counsel appearing for the appellant-assessee has cited one case law in the case of Addl. CIT vs. Surat Art Silk Cloth Manufacturers Association (1979) 13 CTR (SC) 378 : (1980) 121 ITR 1 (SC) and submitted before the Bench that as per the said decision, the Hon'ble Supreme Court has held as follows: "It is not enough that as a matter of fact an activity results in profit but it must be carried on with the object of earning profit. Profit earning must be the end to which the activity must be directed or in other words, the predominant object of the activity must be making profit. Where an activity is not pervaded by profit motive but is car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(23C)(iv) as has been analyzed in detail above in this order. Therefore, we fail to understand as to how the CIT taking undue advantage of the amended definition of s. 2(15) w.e.f. 1st April, 2009 has rejected the renewal application filed by the assessee trust under s. 80G(5). Besides the three other sections allowed, and approved by the same Revenue authorities like ss. 80G(5), 12A and 10(23C) by only making an interpretation of the proviso to s. 2(15), rejection of the application is totally unwarranted and illegal in our considered view. Besides considering the legal aspect, looking at the factual aspect of the argument and existence of the assessee trust, it is pertinent to note here that right from 1936 the trust has been carrying on its activities with the same intent and purpose propounded by the Father of the Nation and the Revenue has failed to establish a single proviso for violation of the activities other than the charitable purpose by the trust. The activities carried out have not been disputed nor disproved. It is an historical monument of national importance inviting international visitors which has to be reckoned with. 13. Therefore, on an overall consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X
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