TaxTMI 
TaxTMI 
2012 (10) TMI 895
X X X X Extracts X X X X
X X X X Extracts X X X X
....corporated as a Private Limited Company on 11/09/2007. The Company passed special resolution for alteration of the Memorandum of Association object clause in keeping with the requirements of Sec.25 of the Companies Act, 1956. The Assessee was given a license under section 25 of the Companies Act 1956 dated 10/3/2010 by the Government of India, Ministry of Corporate Affairs. The assessee has its main objects as under: "To promote and provide networking facilities to the Chief Executive Officers (CEOs) of both private and public companies for improving the quality and profitability of their enterprises by providing a platform for CEOs for exchange of ideas and promotion of entrepreneurship through shared experience in India and to apply its income or profits if any solely for the promotion of its objects and for the promotion of commerce in India and abroad." 3. The assessee applied for grant of registration under section 12A of the Act. The DIT(E) on perusal of the object clause was of the view that the same was not charitable in nature and there was a restriction regarding membership only of CEO's of the company. According to the AO the assessee was, therefore, not entitled to gr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....public utility" as per Supreme Court decision in case of CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722 is not restricted to the objects beneficial to whole of mankind. An object beneficial to a section of public is an object of general public utility. To serve a charitable purpose, it is not necessity that the object should be to benefit the whole of mankind or even all the persons living in a particular country of province. It is sufficient if the intention is to benefit a section of the public as distinguished from specified individuals. It was also submitted that the activities and events organized by CEO Clubs India in recent past would show that it has undertaken several activities in the nature of educative seminars, training sessions for imparting of modern techniques of management, promotion of corporate social responsibility, organizing seminars and conferences for leadership, personal effectiveness, promotion of brand India, managing professionalization and globalization in family managed business etc. All these activities are in the nature of promotion of trade and commerce and education of CEOs for effective management of their enterprise is regarded as activity f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion on becoming its members of only individual heading an organization or to any corporate member, which includes any company, association or body corporate. The above restrictive clause according to the DIT prescribes a specific qualification of becoming a CEO of a company, to become a member of the Assessee. According to the DIT therefore, the objects of the trust and the reason for which the trust has been formed are for general public utility. The DIT therefore held that the Assessee does not satisfy the prerequisite conditions for grant of registration u/s.12AA of the Act. 8. Aggrieved by the order of the DIT(E) the assessee has preferred the appeal before the Tribunal. We have heard the submissions of the learned counsel for the Assessee who reiterated the stand of the Assessee as was put forth before the DIT(E). The learned DR relied on the order of the DIT(E). 9. We have considered the rival submissions. The first reason assigned by the DIT for denying registration to the Assessee u/s.12A of the Act was that the objects of the Assessee are not for the benefit of general public but for specific members viz., benefit of companies who are engaged in commercial activities to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cences for import of foreign yarn and quotas for purchase of indigenous yarn obtained by the assessee for its members. This commission was credited separately in a building account and out of this amount the assessee constructed a building. The Tribunal held that the primary purpose for which the assessee was established was to promote commerce and trade in art silk, silk yarn and cloth as set out in clause (a) and the other objects in clauses (b) to (e) were merely subsidiary objects; that the primary purpose was plainly advancement of an object of general public utility and did not involve the carrying on of any activity for profit within the meaning of s. 2(15) of the Income-tax Act, 1961, because whatever activity was carried on by the assessee in fulfillment of the primary purpose was for advancement of an object of general public utility and not for profit; and that, therefore, the assessee's income was exempt from tax under s. 11(1). On further appeal the Hon'ble Supreme Court held that the objects specified in clauses (b) to (e) were merely powers incidental to the carrying out of that dominant and primary purpose; (ii) that the dominant or primary purpose of the promotion ....