TaxTMI 
TaxTMI 
2013 (12) TMI 18
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....ity Centre for the use of hand tool manufacturers that is stated to contain facilities for the various manufacturing activities such as forging, heat treatment, packaging, training, finishing, testing etc. This facility is to be accessed by the hand tools manufacturer upon payment of user/service charges that are to be decided from time to time. In addition to the above, the Company also lists out various ancillary objectives. 4. An opportunity of being heard was given to the assessee and its authorized representative filed written submission and the matter was also discussed with its authorized representative. The assessee has filed its claim under the residual limb of the definition of "Charitable purpose" contained in Section 2(15) of the Act i.e. entity whose purpose is "advancement of any other object of general public utility". In support of its claim, the authorized representative of the assessee stated that though the Company shall be charging a user fee for its usage, it shall not be working with a profit motive and none of the objectives of the Company shall be carried out on a commercial basis. He further stated that the Company has been registered under Section 25 of....
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....cited the following judgments/decisions: i. Himachal Pradesh Environment Protection and Pollution Control Board Vs. Commissioner of Income Tax, reported in (2009) 28 DTR 289; ii. Commissioner of Income Tax Vs. Andhra Chamber of Commerce, reported in (1965) 55 ITR 722 (SC); iii. Commissioner of Income Tax Vs. Haryana Building & Other Construction Works Welfare Board, reported in (2011) 52 DTR (P&H) 253 7. On the contrary, learned DR relied upon the impugned order passed by Commissioner of Income Tax-I, Jalandhar, and stated that the assessee company does not come under the provisions of Section 2(15) of the Act, in which the meaning of charitable purpose has clearly been described as "Charitable purpose includes relief of the poor, education, medical relief {prevention of environment (including watersheds, forests and wildlife) and preservation of monuments of places or objects of artistic or historic interest} and the advancement of any other object of general public utility". But in the instant case, hand tools manufacturers can utilize the proposed CFC of the Company upon payment of usage charges and that shall be determined by the directors of the company who themsel....
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....ent. Learned Commissioner of Income Tax-I, Jalandhar, has also held that if the usage are so fixed as to recover the basic cost and not to make any profit still as per the first proviso to Section 2(15) of the Act, it ceases to be a charitable purpose, since this proviso specifically excludes 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 fees or any other consideration irrespective of the nature of use of the application of the income from such activities. Finally, the Commissioner of Income Tax-I, Jalandhar, has held that the assessee is providing its services by charging fees. In the proviso of Section 2(15) of the Act, nowhere it is mentioned that if fees is to be charged so fixed as to not make any profit, then such business activities are excluded from this prohibited ambit of charitable purposes. Lastly, the Commissioner of Income Tax-I, Jalandhar, in the impugned order has also held that an institution set up with the idea of promoting trade & commerce which merely regulates or enhances the business of its members does not amount to 'advancement of any other obje....
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.... general public utility. In the absence of any evidence, we are of the view that learned Commissioner of Income Tax-I, Jalandhar, has rightly rejected the application of the assessee for registration under Section 12A of the Act. 11. From the income and expenditure account of the assessee- company for the year ending 31.03.2011, we find that the assessee- company has not incurred even a single penny to achieve its objects i.e. for charitable purpose. For the sake of convenience, the Income and Expenditure Account for the year ended 31.03.2011 of the assessee- company is reproduced as under: Kumar Ashwani & Associates Chartered Accountants Ph.: 0181-2239270,5080270 M/s INDIAN TOOLS TECHNOLOGY CENTRE G.T. ROAD, PATHANKOT BYE PASS, JALANDHAR Income and Expenditure Account for the year ended 31.03.2011 Particulars Schd. No. Amount (Rs.) 31-Mar-11 INCOME Other Income 4,769,845.00 4,769,845.00 EXPENDITURE Advertisement 31,170.00 Audit Fee & Profession Charges 55,150.00 Bank Charges and Interest 1,397.00 Computer Expenses 3,250.00 Interest on TDS 21,407.00 Legal Expenses 4,426,260.0....