TMI Blog2018 (2) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... itha Lal Meena, Accountant Member Appellant by Shri Inderjeet Singh, CIT. DR Respondent by Shri Alok Farsaiya, CA ORDER Per, Dr Mitha Lal Meena, AM This appeal by the assessee is directed against the order of CIT-II, Agra dated 29.09.2014, rejecting application for registration u/s 12A of the Income Tax Act, 1961. 2. At the outset, the Ld. counsel for the assessee requested for condonation of delay of its appeal for 70 days. 3. In this regard, a condonation application has been placed on record by the assessee, supported with an affidavit dated 19.10.2017, sworn by the erstwhile counsel for the assessee has been filed before this Bench, alongwith the Annexures mentioned therein. The contents thereof are as follows: 1. That the deponent is the Chartered Accountant Tax Consultant of the Appellant. 2. That the Order of Comm of Income Tax rejecting the grant of Registration U/S 12AA dt. 29-09-2014 was received by the Appellant on 05-10-2014. 3. That after getting the appeal singed by the Mr. Ravinder Kumar Mathad the Secretary of the Authority the appellant the office clerk of the appellant left the documents in the office of the deponent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes without any conditions. The assessee's objects include acquisition, development and auction of lands, charging development levies of various kind with definite motive of profit and there is no charitable purpose or any activity for public utility. Further, profit making by the assessee is not merely incidental or by-product of the activity of the assessee. There is no escape from conclusion that the assessee is carrying on activities of commercial nature with the motive to make profit and as such there is no reason to continue the registration granted under section 12AA of the Act. 7. From the facts discussed above, I am satisfied that the activities of the assessee are not genuine so far as they are no longer for Charitable purpose as per amended section 2(15) of the Income Tax Act, 1961. Therefore, the appellant, Firozabad Shikohabad Development Authority, is not entitled to registration u/s 12A or 12AA and accordingly the application for grant of registration u/s 12A is hereby rejected. 7. The ld. counsel for the assessee submitted that the ld. CIT(A) has wrongly interpreted the proviso to Section 2(15) by Finance Act 2008. He has referred CBDT Circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue that the petitioner charges fee and, therefore, is carrying on business, has to be rejected. The intention behind the entire activity is philanthropic and not to recoup or reimburse in monetary terms what is given to the beneficiaries. Element of give and take is missing, but decisive element of bequeathing is present. In the absence of profit motive and charity being the primary and sole purpose behind the activities of the petitioner is perspicuously discernible and perceptible. 7.1 He relied on various judicial pronouncements to support his case which is listed below: 1. Hridwar Development Authority vs. CIT (2015) 115 ITD 318 (Del.) 2. Jhansi Development Authority vs. CIT in ITA No. 316 (Agra) 2014. 3. CIT vs. Lucknow Development Authority (2014) 265 CTR (All) 433. 4. Mathura Vrindavan Development Authority Vs. CIT in ITA No. 13/Agra/2013. 5. ITO Moradabad vs. Moradabad Development Authority in ITA No. 005/Del/2013. 6. CIT Vs. Ghaziabad Development Authority ITA No. 657 of 2007 (All) 7. India Trade Promotions Vs. Director General of Income Tax (2015) 374 ITR 0333 (Del). 8. The ld. DR has relied on the order of the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itable purpose is defined in Section 2(15) of Act, 1961 and before Finance Act, 2008 whereby it was substituted with effect from 01.04.2009 and has been made much detailed, it read as under: (15) charitable purpose includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historical interest and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of 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, irrespective of the nature of use or application, or retention, of the income from such activity; Provided further that first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh rupees or less in the previous year. 13. Advancement of any other object of general public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processing return of income of these assessees, to examine the claim of the assessees under Sections 11 13 and give such treatment to these institutions as is warranted by the facts of the case. Revenue Authorities are always at liberty to cancel the registration under Section 12AA(3). Moreover, it may be mentioned that the benefit of Section 11 is not absolute or conclusive. It is subject to control of Sections 60 to 63. If it is found by keeping in view the provisions of Sections 60 to 63 that it is not so includible then such income does not qualify for any relief. 25. Further, it may be mentioned that Section 12AA of the Act lays down the procedure for registration in relation to the conditions for applicability of Sections 11 12 as provided in Section 12A. Therefore, once the. procedure is complete as provided in sub-section (1) of Section 12AA and a certificate is issued granting registration to' the trust or institution the certificate is a document evidencing satisfaction about (i) the genuineness of the activities of the trust or institution, and (ii) about the objects of the trust or institution. Section 12A stipulates that the provisions of Sections 11 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. For the applicability of proviso to Section 2(15), the activities of the trust should be carried out on commercial lines with intention to make profit. Where the trust is carrying out its activities on non-commercial lines with no motive to earn profits, for fulfillment of its aims and objectives, which are charitable in nature and in the process earn some profits, the same would not be hit by proviso to sect/on 2(15). The aims and objects of the assessee-trust are admittedly charitable in nature. 30. Mere selling some product at a profit will not ipso facto hit assessee by applying proviso to Section 2(15) and deny exemption available under Section 11. The intention of the trustees and the manner in which the activities of the charitable trust institution are undertaken are highly relevant to decide the issue of applicability of proviso to Section 2(15). 31. There is no material/evidence brought on record by the revenue which may suggest that the assessee was conducting its affairs on commercial lines with motive to earn profit or has deviated from its objects as detailed in the trust deed' of the assessee. In these facts and circumstances of the case, the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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