TMI Blog2016 (2) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... by Finance Act 1993 with effect from 1st April 1983. Therefore, after such omission, the element of profit cannot be excluded from the definition ‘charitable purposes’ u/s 2(15) of the Act. According to this provision, if any educational institution is running on commercial basis, then the income of such educational institution cannot be exempted from taxation. However, such institution can claim exemption u/ss 11 & 12 of the Act if it involves charitable activities. After complying the requirement of sec. 11 of the Act, if there is any violation either in sec. 11 or 13, profit of such institution would be taxable because some profit has been earned by the institution, registration u/s 12AA cannot be denied so long as provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee filed application in Form No.10A on 8.9.2014 for registration u/s 12AA of the Act. According to the DIT(E), limitation for passing order u/s 12AA(2) of the Act expired on 31.3.2015, however, in view of the judgment of the jurisdictional High Court in the case of CIT vs Sheela Christian Charitable Trust, 354 ITR 478, the CIT is empowered to pass order even after that date as the date mentioned in 12AA(2) of the Act is only directory and not mandatory. Accordingly, he passed order on 29.6.2015. Regarding granting or registration u/s 12AA of the Act, the DIT(E) was of the opinion that the object clause of the assessee reads as follows: 2. To Develop Rural Society Economically and socially . Expenditure-3 : Economy To give them hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture was incurred. Accordingly, he rejected the application of the assessee for registration u/s 12AA of the Act. Against this, the assessee is in appeal before us. 4. We have heard both the parties and perused the material on record. The question for consideration is with regard to the scope of enquiry by the DIT(E) u/s 12AA of the Act. With effect from 1.4.1997, the CIT(E)/DIT(E) is empowered to enquire about the activities of the assessee before passing the order. There may be cases where application made after the commencement of activities by the assessee-trust. In such cases, the DIT(E) is justified to enquire about the activities. However, where no activity is commenced, the question of making any enquiry regarding any activity b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To provide resources for Advanced Education for people who deserve it. 2. To develop Rural Society Economically and socially. 3. To provide resources to enhance the Technical skills of the youth of the country so that they can be self employed. 4. To provide job oriented education to the rural youth. 5. To help them find suitable jobs in order to improve their socio economic conditions. 6. To bring Awareness in people regarding health by conducting awareness camps. 7. To provide Good sanitation facilities in rural areas. 8. To distribute free educational aids for the poor and needy persons. 9. To provide free transport facility for commuting to school to the poor and needy persons in rural areas. 10. To promote V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition charitable purposes u/s 2(15) of the Act. According to this provision, if any educational institution is running on commercial basis, then the income of such educational institution cannot be exempted from taxation. However, such institution can claim exemption u/ss 11 12 of the Act if it involves charitable activities. After complying the requirement of sec. 11 of the Act, if there is any violation either in sec. 11 or 13, profit of such institution would be taxable because some profit has been earned by the institution, registration u/s 12AA cannot be denied so long as provisions of sections 11, 12 12 of the Act are complied with. So long as it is established that income of the institution has been applied for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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