TMI Blog2021 (6) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... dividend amongst its members and does not set out a condition that the income earned by the appellant company shall be deployed for the objects of the company. - This would make the appellant company a commercial organization. However, the view of the ld. CIT (Exemption) that the appellant company is a commercial organization merely because it is generating huge revenue from year to year with mark-up on the cost of 10% to 12% cannot be upheld. CIT (Exemption) had not considered the matter in proper perspective. The matter should be remanded back to the file of the ld. CIT (E) for de-novo consideration of application on the touchstone of law laid down by in the case of Ananda Social and Educational Trust [ 2020 (2) TMI 1293 - SUPREME ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution of MESCO, funds will be misused Learned CIT-Exemptions erred in law and on facts in making above and many other erroneous, fallacious, incorrect and frivolous observations; and further erred in declining registration u/s. 12AA of ITA, 1961. 4. Appellant craves leave to add, alter, clarify, explain, modify, delete any of the grounds of appeal, and to seek any just and fair relief. 3. Briefly, the facts of the case are as under:- The appellant, namely, Maharashtra Ex-servicemen Corporation Ltd. is a company incorporated under the provisions of the Companies Act, 1956. It was formed in the year 2002 pursuant to the Resolution passed by the Government of Maharashtra for re-settlement of ex-servicemen of Indian Defenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The ld. CIT (Exemption) also perused the main objects as well as the other objects set out in the Memorandum of Association (MOA) and had come to the conclusion that other objects are not ancillary to the attainment of main objects and are independent by themselves, the appellant company had come into existence for commercial purposes not for the charitable purpose. The ld. CIT (Exemption) had also taken note of the clauses providing for distribution of profits to its members. The ld. CIT (Exemption) also noted that the appellant company also providing services to the civilian apart from the ex-servicemen. Finally, the ld. CIT (Exemption) on the analysis of the financial information of last 3 years i.e. assessment years 2017-18, 2018-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o consideration, the issues of assessment i.e. the assessee company is generating surplus and making a mark-up of 10% to 12% on the service cost. He submitted that the form of organization to pursue the charitable activity is irrelevant. He submitted that the appellant company had not distributed any dividend amongst its members and the company is totally controlled by Government of Maharashtra. Thus, he submitted that the ld. CIT (Exemption) was not justified in rejecting the application for grant of registration u/s. 12A of the Act. 8. On the other hand, ld. Sr. DR had taken us through the clauses pertaining to allotment of shares, distribution of dividends etc. He submitted that the company is a commercial organization not intended to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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