TaxTMI 
TaxTMI 
2012 (8) TMI 457
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....) of the I.T. Act, 1961. The said finding being arbitrary, perverse and devoid of merits and being legally unsustainable the same may please be vacated and it may please be held that the appellant is a Charitable Trust within the meaning of provisions of Section 2(15) r.w.s. 12A of the I.T. Act, 1961 and the learned CIT may please be directed to grant registration to the appellant u/s.12AA of the I.T. Act, 1961. 4. Facts of the case, in brief are that the assessee is a society formed on 18-04- 2002 and registered under the Societies Registration Act, 1860. The society is also registered under the provisions of Bombay Public Charitable Trust Act, 1950. The basic objectives of the society for which it was set up is to provide better, speedy and efficient services to the public at large which are as follows (Clause 4 of the Memorandum of Association) : a. To set up and provide computerized online processing facility of various transactions which the public has with Government offices (for e.g. request for documents like Affidavits, Certificates, Licenses, Ration Cards etc.) with a view to help speedy and efficient processing of such transactions which in turn will help the people at....
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....t 3 years etc. On examination of the object clauses the learned CIT observed that some of the objects clearly fall within the scope of the exclusionary provision contained in the proviso to section 2(15) of the I.T. Act. As an illustration he mentioned the following two objects : "1. to recover suitable service charges from the beneficiaries of such services to meet the expenses and to expand the scope of such services. 2. to provide facilities like Telephone Booths, Xerox Centres, ATM etc. at such centres for the convenience of the public". From the various details furnished by the assessee he noted that for pursuing its objects the assessee has entered into tie-up with several vendors which are private entities. According to him the arrangement with the vendors who are private parties are clearly in the nature of business arrangements. Profits are shared with the vendors. Prima-facie, the acts of tying up with private entities as well as sharing profits with them amount to rendering of services to such private entities by way of enabling them to improve/enhance their business activities. He, therefore, was of the opinion that prima-facie the objectives and activities of the so....
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....th profit motive because they are not rendering free services but they are charging cess/fees for their services and, therefore, the assessees are not established for charitable purposes. There is no merit in this contention. The cess/fees are charged by the assessees from the purchasers in the market area at the rate prescribed by the State Government for the purpose of carrying out the object of the Act. As held by the Apex Court in the case of Art Silk Cloth Manufacturers Association (Supra) and in the case of Bharat Diamond Bourse (Supra) where the dominant purpose of a trust/institution is charitable, incidentally if some profit is made and the said profit is used for charitable purposes, the said trust/institution does not cease to be established for charitable purposes. In the case of the assessees, the dominant object is to regulate procurement and supply of agricultural and some other produce and to meet the expenses required to be met with in achieving the said object, the legislature has empowered the assessees to levy cess/fees. Moreover, surplus remaining in the market fund is ploughed back for carrying out the object of 1963 Act. Thus, the surplus remaining in the ma....
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....ment (including water sheds, forests and wildlife) and preservation of monuments or places of objects of artistic or historic interest] and the advancement of any other " object of general public utility". Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity:] [Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is [twenty-five lakh rupees] or less in the previous year;] 9.1 We find the learned CIT refused registration to the assessee society on the ground that some of the objects and activities are prima-facie non charitable as they are in the nature carrying on trade/commerce or business or of rendering service promoting trade/commerce or business. According to him, such activities/services have been categorically exclu....