Charitable purpose test under section 2(15) excludes seed certification services linked to trade, commerce, and fee-based activity.

Activities of a society engaged in seed certification and allied services were examined under section 2(15) to determine whether they constituted "charitable purpose" as advancement of an object of general public utility. The governing test was whether the services were in the nature of trade, commerce or business, or were rendered in relation to such activity for a fee or other consideration. Applying the cited High Court ratio, the certification and related services were treated as facilitating commercial dealings in certified seeds, so the proviso to section 2(15) excluded the activity from charitable purpose. Registration under section 12A was therefore denied and the refusal under section 12AA was upheld.

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Issues: Whether the assessee society, engaged in seed certification and allied services for fees, was entitled to registration under section 12A of the Income-tax Act, 1961 in the light of section 2(15) and its proviso.

Analysis: The assessee's activities were examined against the statutory definition of "charitable purpose" under section 2(15). The governing test was whether the activities fell within "advancement of any other object of general public utility" and, if so, whether they nonetheless involved carrying on activity in the nature of trade, commerce or business, or rendering services in relation thereto for a cess, fee or other consideration. Applying the ratio of the cited High Court decision, the certification and related services were found to facilitate commercial dealings in certified seeds and to be rendered in relation to trade, commerce or business. On that basis, the proviso to section 2(15) operated to exclude the activity from charitable purpose.

Conclusion: The assessee was not entitled to registration under section 12A, and the refusal of registration under section 12AA was upheld.

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