Charitable purpose under tax law confirmed for a statutory welfare board; registration could not be refused at the threshold.

A statutory welfare board constituted to regulate employment and welfare of private security guards was treated as advancing an object of general public utility, so its objects fell within "charitable purpose" under section 2(15). Limiting the benefit of the scheme to registered employers and security guards did not destroy charitable character, because a body serving a defined section of the public can still qualify. At the registration stage, the inquiry was confined to the genuineness of the objects and activities, not ultimate exemption eligibility. The first proviso to section 2(15) was held inapplicable because the Board was implementing a welfare scheme and was not carrying on trade, commerce or business. Registration under section 12A(1)(a) was therefore warranted.

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Issues: Whether the assessee was entitled to registration under section 12A(1)(a) of the Income-tax Act, 1961, and whether its objects fell within the expression "charitable purpose" under section 2(15) despite the first proviso thereto.

Analysis: The assessee Board was constituted under the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 to regulate the employment and welfare of private security guards and to secure their employment conditions, social security and welfare benefits. The objects were directed towards advancement of an object of general public utility. The fact that the benefit of the scheme was confined to registered employers and security guards did not alter the charitable character of the institution, because a body serving a section of the public can still fall within general public utility. The Tribunal also held that the enquiry at the stage of registration is confined to the genuineness of the activities and the objects, and not to the ultimate eligibility for exemption. The first proviso to section 2(15) was held inapplicable, since the Board was engaged in a statutory welfare scheme and not in trade, commerce or business, or in rendering service in relation thereto for consideration.

Conclusion: The denial of registration was unjustified, and the assessee was entitled to registration under section 12A(1)(a) of the Income-tax Act, 1961.

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