TaxTMI 
TaxTMI 
2015 (6) TMI 248
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....aid application, a questionnaire was issued by the learned Director of Income-tax( Exemption) requiring the assessee to furnish the details on specific points and also to produce books of account, bills and vouchers and other documents for verification. Besides complying with the said requirements of the Director of Income-tax( Exemption), the assessee also brought to the notice of the Director of Income-tax(Exemption) its main objects as under:- "(a) To train different level Government functionaries of the department of irrigation and Command Area Development and the department of agriculture and other allied departments and agencies of the State Government dealing with aspects relating to water and land management in planning, designing, construction, operation and maintenance or irrigation and drainage networks etc., with due emphasis on micro-level functioning and "On-Farm" irrigation practices to ensure optimum utilization of Water and Land Resources; (b) To ensure full understanding of the principles of efficient operational plans and improved irrigation practices at all levels of scheme management and among the farmers. (c) To provide a better understanding among th....
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....roviding consultancy services yielding substantial income was hit by the proviso to S.2(15) inserted in the statute by the Finance Act, 2008 with effect from 1.4.2009. Accordingly, relying on the said proviso, he held that the activity of the assessee of providing consultancy services yielding substantial income was sufficient to indicate commercial intention on the part of the assessee society, and therefore, the assessee society could not be considered as carrying on any charitable activity to be eligible for registration under S.12A of the Act. Accordingly, the registration sought by the assessee was denied by the learned Director of Income-tax(Exemption) vide his order dated 30.7.2012, which is impugned by the assessee in the present appeal filed before the Tribunal. 4. We have heard the arguments of both the sides and also perused the relevant material on record. It is observed that the basic nature of the aims and objectives of the assessee society being charitable is not disputed by the learned Director of Income-tax( Exemption) in his impugned order. As a matter of fact, in pargraph no.3 of his impugned order, he has agreed that the services provided by the assessee soci....
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....v). Looking at the said expression from this stand point, it becomes clear that it has a reference to income. Because, it is only when such an institution has an income that the question of not including that income in its total income would arise. Therefore, merely because an institution, which otherwise is established for a charitable purpose, receives income would not make it any less a charitable institution. Whether that institution, which is established for charitable purposes, will get the exemption under s. 10(23C)(iv) -would have to be determined by the prescribed authority having regard to the objects of the institution and its importance throughout India or throughout any State or States. There is no denying that having regard to the objects of the assessee and its importance throughout India in the field of advancement of promotion of trade and commerce, the assessee would be entitled to be regarded as an institution which would qualify for that exemption. The only thing that is to be examined iswhether the assessee had been established for charitable purposes'? The fact that it derives income does not, in any way, detract from the position that it is an institution....
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....f general public utility to which the exception carved out in the first proviso to s. 2(15) would not apply. If a literal interpretation were to be given to the said proviso, then it would' risk being hit by Art. 14 (the equality clause enshrined in Art. 14 of the Constitution). It is well-settled that the Courts should always endeavour to uphold the Constitutional validity of a provision and, in doing so, the provision in question may have to be read down. It would be pertinent to reiterate that s. 2(15) is only a definition clause. Sec. 2 begins with the words, "in this Act, . unless the context otherwise requires". The expression "charitable purpose" , appearing in s. 2(15) has to be seen in the context of s. 10(23C)(iv). When the. expression "charitable purpose", as defined in s. 2(15), is read in the context of s .. 1O(23C)(iv) the Court would have to give up the strict and literal interpretation' sought to be given to the expression "charitable purpose" by the Revenue. The' introduction of the proviso to s. 2(15) by virtue of the Finance Act, 2008 was' directed to prevent the unholy practice of pure trade, commerce and business entities from masking their acti....