Charitable status under section 2(15) needs fresh scrutiny where general public utility activities and receipts must meet the controlling legal test.

Charitable status under section 2(15) must be tested against the post-amendment general public utility standard, including whether activities amount to trade, commerce or business and whether receipts fall within the applicable monetary threshold. The Madras High Court treated the Supreme Court's later interpretation as controlling and held that the existing record required fresh year-wise examination of the institution's objects and activities. The matter was remitted to the Directorate of Income Tax (Exemption) for reconsideration, with no final determination on exemption eligibility or on the validity of cancellation of registration on the merits.

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Issues: Whether the matter required fresh examination in the light of the Supreme Court's interpretation of section 2(15) and the conditions governing cancellation of registration under section 12AA(3).

Analysis: The objects and activities of the respondent institution were considered against the post-amendment test under section 2(15) of the Income-tax Act, 1961. The governing framework drawn from the Supreme Court's decision on general public utility was treated as controlling, including the principle that activities in the nature of trade, commerce or business, or services in relation thereto, must be assessed on the basis of the nature of receipts, the connection with the stated objects, and the applicable monetary threshold. The Court noted that institutions claiming general public utility status require close scrutiny and that the record must be examined afresh in the light of the later authoritative pronouncement.

Conclusion: The case was remitted to the Directorate of Income Tax (Exemption) for fresh consideration within the prescribed time, and no final adjudication was made on the respondent's entitlement to exemption or on the validity of cancellation on merits.

Ratio Decidendi: When an earlier view on charitable status is tested against a later binding interpretation of section 2(15), the matter may be sent back for a fresh year-wise examination of the assessee's activities and receipts under the controlling legal standard.

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