TaxTMI 
TaxTMI 
2009 (8) TMI 756
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....d by Mahatma Gandhi. This project has been continuously held to be a charitable purpose for all these years. CIT also failed to see that the activities of assessee trust were solely directly and intimately related to the said charitable purpose and it did not involve carrying on of any activity in the nature of trade, commerce and business. 5. Assessee craves leave to urge additional grounds at the time of hearing as may be necessary." 2. The learned Authorised Representative has argued the matter at length before us and also filed written submissions of 10 pages elaborating the history of the trust right from the beginning till date. He has tried to make all the grounds taken in this appeal against the rejection order of the CIT under s. 80G. On the other hand, the learned Departmental Representative strongly supported the order of the CIT while defending the Revenue. He also made an attempt to convince the Bench regarding the changes brought in the Act with regard to relevant section. 3. On hearing the contested rival submissions from both the sides and after perusal of the case record along with the submissions made by the learned Authorised Representative along with the memo....
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....yog, sale of coupons, conference, seminars, etc. But according to the CIT, sale of coupons, conference, seminars for the initial years 2004-05, 2005-06 and 2006-07 onwards amounts to carrying on business which is prohibited by the amended definition of s. 2(15) w.e.f. 1st April, 2009. Therefore, according to the view taken by the CIT, the trust is not eligible to get exemption under s. 80G(5). 4.2 On a specific query from the Bench. the learned Authorised Representative in the course of hearing of this appellate proceeding before the Bench, clarified regarding different activities undertaken by the trust. From the said clarification, it transpires that there is a group of Sadhaks who reside in the Ashram maintained by the trust and render different types of services to the trust by way of preaching Gandhian philosophy, rendering physical services, imparting different types of training etc. They are fed and maintained by the trust for their free service and continuous stay in the Ashram. This apart, some inmates are there who are engaged in agricultural activities, Goshala activities, Sahitya Bhandar activities and Yatri Nivas activities. It is pertinent to observe that there is a ....
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....f donations to certain funds, charitable institutions etc. Sec. 80G(5) is quoted below: "(5) This section applies to donations to any institution or fund referred to in sub-cl. (iv) of cl. (a) of sub-s. (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely: (i) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of ss. 11 and or cl. (23AA) or cl. (23C) of s. 10: Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of s. 11 shall not apply in relation to such income, if- (a) the institution or fund maintains separate books of account in respect of such business; (b) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and (c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations recei....
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....he date of the creation of the trust or the establishment of the institution if the CIT is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons; (ii) from the 1st day of the financial year in which the application is made, if the CIT is not so satisfied: Provided further that the provisions of this clause shall not apply in relation to any application made on or after the 1st day of June, 2007; (aa) the person in receipt of the income has made an application for registration of the trust or institution on or after the 1st day of June, 2007 in the prescribed form and manner to the CIT and such trust or institution is registered under s. 12AA; (b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of s. 11 and s. 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-s. (2) of s. 288 and the person in receipt ....
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....carried on continuously with a view to earning an income." 10. On the above analysis of the factual aspect as well as the provision of law and the case law cited, we find that the CIT has wrongly interpreted the amended definition of proviso to s. 2(15). The object as is analyzed from the amended proviso is to create a barrier for those assessees who are engaged in business activities in the garb of charitable purpose. But it is not meant that the assessees really engaged in charitable purpose should be compelled to meet with a barrier for the said proviso. 11. In other words, the amended proviso is constraint for those assessees making an attempt to defraud the law in the garb of charitable purpose but it is certainly not meant for those assessees who are really engaged in the activities of charitable purpose. 11.1 Even otherwise the term as per the proviso of "advancement of any other object of general public utility" is having a wider connotations to bring within its meaning the intent and purpose of the activities carried out by the appellant-assessee trust. Advancement means - to progress, perform General means - completely almost universal Object....