TMI Blog2019 (3) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... en employment. The execution of the work awarded by the Railways, is not a public utility service carried on by the assessee and the mere fact that the poor are employed in such execution of contract awarded, would not make it a charitable purpose. Further though the assessee is said to have provided employment to various people who are engaged in the actual cleaning work carried out in pursuance of the contract, there is absolutely no material placed as to the categories from which such employees were sourced. But for the mere assertion that the nature of the work would itself indicate that only poor people would come for the same, the assessee has not indicated anything about the source from which the assessee had employed such people. The Tribunal correctly found that for cancellation of registration, there are two conditions to be satisfied; one that there is a registration granted earlier and the other the satisfaction of the Commissioner that the trust or the institution is not genuine or the activity of the trust is not being carried on in accordance with the objects of the trust. The activity specifically carried on by the assessee is execution of contract awarded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviso. The main definition clause stood as it is. 3. The definition clause along with the proviso as introduced with effect from 01.04.2009 is extracted hereunder:- 2(15) Charitable purpose includes relief of the poor, education, yoga, medical relief, preservation of environment including watersheds, forests and wildlife and preservation of monuments or places or objects of artistic or historic 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 the first proviso shall not apply if the aggregate value of the receipts from the activities therein is ten lakh rupees or less in the previous year. 4. The Commissioner invoked sub-Section (3) of Section 12AA by a notice dated 31.01.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it was never the contention of the assessee that the provision of employment to the poor would come under general public utility. It was always the stand of the assessee that it had been providing employment to the poor only and hence the same would come within the objects as seen from the MoA, which is provision of employment to the poor, a charitable activity. The stand hence was that this activity of providing employment to the poor would be a charitable purpose and hence they are entitled to continue their registration granted under Section 12A. The Tribunal based on the above contentions, especially looking at an affidavit submitted by the Counsel who argued the matter before the Tribunal, that the arguments raised were not properly understood by the Tribunal; withdrew its earlier order and posted the matter for hearing. 7. The assessee filed an appeal before this Court from the above order of the Tribunal in the Miscellaneous Application at Annexure-A7, which was rejected by this Court by judgment in ITA No.170/2014 dated 14.10.2014. The learned counsel appearing for the assessee also fairly conceded that, as of now, the assessee could not raise any contention against An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at least for one member in a family, which is needy and deserving . The Tribunal first considered the question as to whether taking a contract from the Indian Railways and carrying out the contract work by employing poor people as claimed by the assessee would amount to a charitable purpose or not. The Tribunal, according to us, correctly found that execution of a contract as awarded by the Indian Railways for the purpose of cleaning train coaches and railway stations is a purely commercial and business activity. The Tribunal also noticed that when there is employment given in pursuance of a contract work, there are many labour friendly legislations which had to be complied with by the employer. Mere employment of people from the weaker sections of Society would not absolve the contractor from the labour legislations and such work is one carried out with a clear intention at making profit. The assessee having bid in a competitive tender had been awarded the work for a consideration agreed upon between the parties and carrying on of such work cannot be categorised as a charitable work merely because the poor or persons from marginsalised sections are given employment. The execution ..... X X X X Extracts X X X X X X X X Extracts X X X X
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