TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 696
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....ks and all other ancillary and allied trades an industries. (c) To advise and assist the members in technical, non-technical and legal matters. (d) To encourage adoption and promotion of correct business practices according to ethical code of correct business practices as enumerated in Appendix C to the Rules and Regulations of the Association and maintain efficiency, dignity and integrity of the profession. (e) To set up arbitration machinery independently or jointly with other or others for settlement of disputes between members and/or members and nonmembers arising out of or in any way connected with or touching the trade and/or services rendered by such trade and industry. (f)To promote science of building and/or construction industry and with that end in view to collect and disseminate amongst members, statistical and technical information affecting the interests of the trade in general and construction industry, trade and profession in particular and for that purpose to print, publish, issue and circulate papers, periodicals, books circulars and other literature and hold seminars, meetings, conferences, discussions etc, and to produce films etc. (g) To encourage and cond....
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....of the objects of the Association in accordance with the provisions made in the Rules and Regulations of the Association. (q) To do all other lawful acts and things as may be incidental or conducive to the realization or attainment of all or any of the aforesaid objects of the Association directly or indirectly and to incur requisite expenditure thereon. (r) To surplus of the Association shall be utilized for furtherance of all or any of the objects hereinabove mentioned and shall not be distributed amongst the members." Looking to the aforesaid objects, it was granted registration under 12A vide certificate dated 24.04.1989 by the DIT (E). Thus all its income and expenditure account was subject to computation and exemption under sections 11 to 13. 3. A proposal was received from ITO(E)1(1), Mumbai for cancellation of registration granted to the assessee, on the ground that assessee has been carrying on activities in the nature of trade, commerce or business, etc. and its gross receipts from such activities are in excess of Rs. 10 lakhs and therefore under proviso to section 2(15), the assessee is carrying out commercial activities. Accordingly a show cause notice dated 31.10.2....
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....s not a commercial activity, but only for the benefit and circulation for the members. Fourthly, regarding the programs, seminars, awards and training and sponsorship the assessee submitted that they were conducted to educate the members and appraise the latest development in the Government laws and up-gradation in the system of overall functioning of the construction industry. This is also one of the objects of the assessee to conduct such programs for its members. For conducting these programs the assessee received contribution from its members, hence there is no commercial activity involved. Lastly, regarding other miscellaneous charges and rent received, it was submitted that they were not in the nature of any activity carried out by the assessee but merely on ancillary activity to attain main object of the association. Renting of some premises for certain occasions was merely to augment financial resources to meet its expenditure and the office space was mainly given to non-profit trade organizations. Thus neither of the above activities or receipts were outside the scope of objects, nor it was for carrying out any commercial activity as stipulated in proviso to section 2(1....
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....the impugned order and the material placed on record. Assessee is an association of builders which has been registered under the Societies Registration Act, 1860 and also under Bombay Public Trust Act, 1950. Looking to its object, which were mainly for advancement of general public utility, it was granted registration u/s 12, vide certificate dated 24.04.1989. The solitary reason for cancelling the registration u/s 12AA(3) by the Ld. DIT is that, in view of proviso to section 2(15) brought in the statute w.e.f. A.Y. 2009-10, the registration granted earlier should be cancelled, because some of the receipts of the assessee are in the nature of trade, commerce, or business. Under the provisions of section 12AA(3), registration granted earlier u/s 12A or u/s 12AA can be cancelled only if the CIT or DIT is satisfied that firstly, the activities of such trust or institution are not genuine or secondly, are not being carried out in accordance with the objects of the trust or institution. Thus, power to cancel registration can be exercised only under these two conditions. From the perusal of the impugned order, it is seen that Ld. DIT has not recorded any satisfaction that assessee activi....
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...., commerce or business or any activity of rendering any service in relation to any trade, commerce or business. The second part, "any activity of rendering any service in relation to any trade, commerce or business" obviously intends to expand the scope of the proviso to include services, which are rendered in relation to any trade, commerce or business. The proviso further stipulates that the activity must be for a cess or fee or any other consideration. The last part states that the proviso will apply even if the cess or fee or any other consideration is applied for a charitable activity/purpose. The proviso has to be given full effect to. Thus, even if cess, fee or consideration is used or utilized for charitable purposes the proviso and the bar will apply. An institution not be regarded as established for charitable purpose/activity under the last limb, if cess, fee or consideration is received for carrying on any activity in nature of trade, commerce or business or for any activity of rendering of any service in relation to any trade, commerce or business, even if the consideration or the money received is used in furtherance of the charitable purposes/activities. In view of t....
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....y the sole or relevant consideration that has to be kept in mind. It is one of the aspects. Normally intention to earn profit is required. Emphasis, however, it does appear, has shifted and the concept and principle of "economic activity" has gained acceptability. The definition of the term "business " may also vary when we are examining taxability under Sales-tax, Excise Duty, Value Added Tax, etc. because these are not taxes on income but the taxable even occurs because of the "economic activity" involved. Even if a person/an organization is carrying on trading on the principle of "no loss no profit ", it may be liable to pay taxes or comply with the statute when the charge and incidence of tax, is on the economic activity". This concept is today well recognized in European Union and England [see Riverside Housing Association Ltd. vs. Revenue Customs Commr. (2006) EWHC 2383 (Ch and the case law cited therein). It may also be also appropriate here to refer the decision of the House of Lords in town Investments ltd. & Ors. Vs. Department of the Environment (1977) 1 All ER 813. In this case, a Government Department was' claiming benefit under a legislation that protected "busine....