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TMI Blog2019 (11) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... al grounds in its appeal however, the cruxes of the issues are that: - (i) Ld. CIT (A) has erred by holding that the assessee does not have valid registration U/s. 12A of the Act. (ii) The Ld. CIT (A) has erred by holding that the assessee do not fall under the sixth limb of Section 2(15) of the Act viz., "Preservation of environment (including water-sheds, forests and wild-life) and preservation of monuments or places or objects of artistic or historical interest" which was inserted by the Finance Act, 2009 with retrospective effect from 1/4/2009. (iii) The Ld. CIT (A) has erred in confirming the order of the Ld. AO who had treated several residual receipts as the taxable income of the assessee by holding that assessee's claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... morandum of Association of the assessee Company and nature of activities carried on by it came to the conclusion that the assessee is not eligible to claim deduction U/s. 11 of the Act and treated the non-agricultural income earned by the assessee amounting to Rs. 3,70,59,197/- as taxable income by observing as follows:- "27. Considering all the facts above, it can be concluded that the assessee is engaged in a purely commercial activities of growing/ cultivation of the forest products and sale of the same. By no stretch of imagination these activities can be considered as a charitable activity. 28. From the memorandum of association of the assessee, it can be seen that the assessee's main objectives are as shown below: (i) To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objectives of the assessee included in the memorandum of Articles of Association of the Assessee, as reproduced above, there no further necessity to explain that the assessee's main objectives are to carry out all types of commercial activities including growing, cultivation, manufacturing, trading, export/ import of forest products. These sorts of activities cannot be called charitable activities. 30. From the main objectives of the assessee, it can be seen that there is no mention of activities including water-shed management, preservation of water tables, conservation of natural forests, creation of employment opportunities to the tribal/rural population etc. Further from the final accounts of the assessee, it is seen that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us, the Ld. AR vehemently argued by stating that the assessee was holding 12A registration and therefore it was entitled for the benefit of exemption U/s. 11 of the Act. In order to support his argument, the Ld. AR submitted before us the assessment order passed by the Ld. AO for the assessment year 2016-17 and 2015-16 wherein the Ld. AO had granted exemption to the assessee U/s. 11 of the Act by recognising the fact that the assessee was registered U/s. 12A of the Act. The Ld. AR further argued that the Ld. CIT (A) had erroneously held stating, 12A application must be submitted every year and registration obtained for availing the benefit of section 11 of the Act. The Ld. AR submitted that the entire activities of the assessee-compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in the Memorandum of Association are only ancillary objects supporting the main objects of the assessee. Therefore, we are of the considered view that the assessee's objects fall under the 6th limb of section 2(15) of the Act, hence in the case of the assessee the proviso to Section 2(15) of the Act is not applicable. Further on examining the revenue received by the assessee amounting to Rs. 3,70,59,197/- as observed in the Order of the Ld.CIT(A) which is extracted hereinabove, we are of the considered view that they are only residual income arising from the main objects / ancillary objects of the assessee-company. For the above stated reasons, we do not find the order of the Ld. AO justifiable for not granting the benefit of exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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