TMI Blog2016 (9) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed limit in a particular previous year. Therefore, the application of the proviso to section 2(15) has to be looked into in every assessment year. In our considered view, the first proviso to section 2(15) will have no role to play in the matter of granting registration and the role of the Ld. DIT (E) is restricted to him being satisfied that the objects are genuine and charitable. In absence of any such finding by the Ld. DIT (E) in this instant appeal, we hold that the benefit of grant of registration has been denied to the assessee without any cogent reason and hence while allowing the assessee’s appeal we direct the Ld. DIT (E) to grant registration to the assessee u/s 12AA of the Act. - Decided in favour of assessee - ITA No. 1037/Del/2014 - - - Dated:- 11-8-2016 - SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Assessee : Dr. Rakesh Gupta, Adv. Sh. Somil Agarwal, Adv. Sh. Abhishek Anand, Adv. For The Revenue : Sh. Ravi Jain, CIT DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: The present appeal has been preferred by the assessee against the order u/s 12AA(1)(b) dated 29/01/2014 passed by the ld. Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isabling provision for another year. The ld. AR submitted that similarly a temporary disablement in one year will not alter the very nature of trust and the institution so as to lead to cancellation of registration or withdrawal of approval or rescinding of notification issued in respect of trust or institution. The ld. AR further submitted that the impact of the proviso to sec. 2(15) will be that the assessee will not be eligible for exemption u/s 11 of the Act and although the assessee may be hit by the proviso to sec. 2(15), the same will not have any bearing on the grant, denial or withdrawal of the registration u/s 12AA. The ld. AR also relied on the decision of the ITAT Amritsar Bench in Kapoorthala Improvement Trust vs. CIT in ITA No. 732/Asr/2013. 5. The ld. DR supported the order of the ld. DIT (E) and submitted that the registration has been correctly denied. 6. We have heard the rival submissions and have perused the material on record. The Memorandum of the society reveals that the aims objects of the society for which the society has been established are as under: 1. To improve the economy of the rural people through afforestation and reforestation programm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable technology in local languages. 24. To intensify and promote the potential youth to utilize available technology and their related industrial matter. 25. To collect the information with regards to research technology and their related industrial matter. 26. To employ and pay necessary staff for the purposes of the society. 27. To do all other such things as the society may consider necessary, incidental or conducive to the attainment of the above objectives. 28. Utilization of non-conventional energy resources for rural. 29. To establish, open and run educational and vocational study centers, skill knowledge providing centers, Vocational Training providing centers, Smart School Classes Institutes in the name Style of Institute of Horticulture Technology across all over India under the banner of Society to impart vocational Technical Education to Farmers, Research Associates, Unemployed Youths, Students of Schools Colleges in the field of Agriculture, Horticulture, Agri Business Management, Food Processing, Food Sciences, Dairy Science Technology, Bio- Chemistry Biotechnology. 30. To establish, open and run educational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this behalf. Thus, the scope of enquiry by the CIT while considering the issue of registration u/s 12AA is very much limited and cannot include enquiry relating to grant of exemption u/s 11 of the Act. It is evident from the order of the Ld. DIT (Exemptions) that he has considered the assessee as a non charitable institution because as per him the activities of the assessee are commercial in nature and hence not eligible for registration u/s12AA of the Act. On a cursory look at the objects of the assessee, it is seen that the assessee is engaged in improving economy of the rural people through aforestation and reforestation. All other objects are ancillary and incidental to the said main objects. A plain reading of the definition of charitable purpose as provided u/s 2(15) of the Income Tax Act, 1961 would make it clear that the restriction imposed under the proviso to the said section applies only to the last limb i.e advancement of any other object of general public utility. There is no express provision u/s 2(15) of the Act which restricts an institution from undertaking any commercial activity if it comes under other limb of charitable purposes. Only requirement is that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion but would also reflect unsound principle of management . 6.3 In our opinion, the aforesaid principle laid down by the Hon'ble Apex court still holds good even after the introduction of proviso to section 2(15) by the Finance Act, 2008 with effect from April 1, 2009 . The words 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 or fee or any other consideration was considered and interpreted by the Hon ble Delhi High Court in the case of Institute of Chartered Accountants Of India v . DGIT (Exemptions) 347 ITR 99 (Delhi), as under (page 123): Section 2(15) defines the term 'charitable purpose'. Therefore, while construing the term 'business' for the said section, the object and purpose of the section has to be kept in mind. We do not think that a very broad and extended definition of the term 'business' is intended for the purpose of interpreting and applying the first proviso to section 2(15) of the Act to include any transaction for a fee or money. An activity would be considered 'business' if it is undertaken wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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