TaxTMI 
TaxTMI 
2014 (3) TMI 250
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....ption under section 11. AO denied the claim of exemption under section 10(23C) stating that assessee does not fulfill the conditions. In addition AO was also of the opinion that assessee, being granted registration under section 12A by the CIT on the basis of the memorandum of association dated 16.02.1956, made substantial changes in the said memorandum of association. Relying on the decision of the Hon'ble High Court of Allahabad in the case of Allahabad Agricultural Institute and another Vs. Union of India, 291 ITR 116, AO was of the opinion that there is violation of provisions of section 12A and assessee should have obtained fresh registration in Form 10A as per rule 17B of the I.T. Rules, 1962. In view of this the total income of a....
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....dings and AO had ignored this. He was also of the further opinion that the assessee is not conducting any commercial activity by renting the property for establishing Cell Towers and advertisement boards on the top of the building. The rental income should be treated as income from house property and not business income and income arising out of the house property should be regarded as property income for the purpose of the Trust. He further noted that assessee Trust is imparting education, medical help and even financial aid to physically handicapped persons and was receiving grant from State Government through the Director of Social Welfare, Maharashtra State. He further recorded the fact that assessee has never amended the objects of the....
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....wers, this income cannot be considered as business income. Since the purpose of the Trust is charitable in nature, it would not loose the character of charitable purpose because some profits arises from other activity. The principles laid down by the Hon'ble Supreme Court in the case of Add.CIT vs. Surat Art Silk Cloth Manufacturers Association, 121 ITR 1 (SC) will apply to the facts of the case. Moreover the income from rent as rightly noted by the CIT (A) cannot be assessed as business income as it becomes income from house property only. Therefore, the finding of CIT (A) that assessee is in the business and using the Trust for its commercial activity is not correct. Further as seen from the annual report placed on record, assessee ha....