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Registration under section 12AA granted where substantive charitable objects for ex-servicemen, incidental commercial activity permitted and profits applied
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ITAT allowed the appeal, set aside the CIT(E) order and directed grant of registration under section 12AA. The Tribunal held that absence of registration under section 8/25 Companies Act is not fatal to charitable status where substantive objects are charitable; the assessee's principal object of providing employment and assistance to ex-servicemen was established. Commercial undertakings (petrol outlet, trading, leasing, construction) were incidental and permissible: mark-up was below 20% of receipts and profits were applied to primary objects. Documentary evidence of beneficiary assistance and recruitment practices sufficed; limited civilian employment was justified by specialist needs. Amended AOA precluded profit distribution and assets on dissolution vest with the State, supporting registration.
ITAT allowed the appeal, set aside the CIT(E) order and directed grant of registration under section 12AA. The Tribunal held that absence of registration under section 8/25 Companies Act is not fatal to charitable status where substantive objects are charitable; the assessee's principal object of providing employment and assistance to ex-servicemen was established. Commercial undertakings (petrol outlet, trading, leasing, construction) were incidental and permissible: mark-up was below 20% of receipts and profits were applied to primary objects. Documentary evidence of beneficiary assistance and recruitment practices sufficed; limited civilian employment was justified by specialist needs. Amended AOA precluded profit distribution and assets on dissolution vest with the State, supporting registration.
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