TaxTMI 
TaxTMI 
2016 (2) TMI 560
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....basis. As per the Memorandum of Association of the assessee it is seen that it is a Company incorporated u/s 25 of the Indian Companies Act, 1956 and its main objects are as under :- 1. To initiate, carry out, execute, implement, aid and assist activities towards skill development in the Rubber sector in India ("Sector") and meeting the entire value chain's requirements of appropriately trained manpower in quantity and quality on a sustained and evolving basis. 2. To develop a skill development plan for the Sector and maintain skill inventory. 3. To determine skills/competency standards and qualifications in consonance with the Sector norms. 4. To plan and execute training of trainers. 5. To promote academies of excellence. 6. To establish a well structured Sector specific labour market information System ("LMIS") to assist planning and delivery of training. 7. To facilitate in standardizing the affiliation and accreditation process for the Sector. 8. To coordinate participation of social partners, employers in the private sector, training providers, professional societies and NGOs/civil society groups in the process of skill development for the Sector. 9. To ....
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....as a one stop data and information source on the labour market to integrate and map the supply versus demand needs and further to assist in planning and delivery of training. Ld. AR further submitted that the assessee also develops National Occupation Standards (NOS) specifying the standard of performance that individual must achieve when carrying out a function in the workplace, bringing together skills, knowledge and understanding. Another activity of the assessee company is to standardize affiliation, certification and accreditation process to measure competency. Yet another activity is to plan and execute training of trainers for educational and vocational skill upgrade in different areas in different states. He drew our attention to clause 17 of incidental objects of the company and submitted that fees, service charges, consultancy charges etc. are charged only in furtherance of the objects of the company and not for any other purposes. He also drew our attention to clause V which specifies that all incomes, earnings, movable and immovable properties of the company shall be solely utilised and applied towards the promotion of its aims and objects only as set forth in the memor....
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....order of the Ld. DIT (Exemptions) as well as other material on record. It is clear from the order of the Ld. DIT (Exemptions) that he has considered the assessee as a non charitable institution because as per him the activities of the assessee are commercial in nature and hence not eligible for registration u/s12A of the Act. On a cursory look at the objects of the assessee, it is seen that the assessee is engaged in development of skills specifically for the Rubber Industry which can safely be called to be an activity in the field of education. All other objects are ancillary and incidental to the said main objects. A plain reading of the definition of charitable purpose as provided u/s 2(15) of the Income Tax Act, 1961 would make it clear that the restriction imposed under the proviso to the said section applies only to the last limb i.e advancement of any other object of general public utility. There is no express provision u/s 2(15) of the Act which restricts an institution from undertaking any commercial activity if it comes under other limb of charitable purposes. Only requirement is that the assessee must not have profit motive and the income generated from commercial activi....
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....ment". 8. In our opinion, the aforesaid principle laid down by the Hon'ble Apex court still holds good even after the introduction of proviso to section 2(15) by the Finance Act, 2008 with effect from April 1, 2009. The words "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 fee or any other consideration" was considered and interpreted by the Hon'ble Delhi High Court in the case of Institute of Chartered Accountants Of India v. DGIT (Exemptions) 347 ITR 99 (Delhi), as under (page 123): "Section 2(15) defines the term 'charitable purpose'. Therefore, while construing the term 'business' for the said section, the object and purpose of the section has to be kept in mind. We do not think that a very broad and extended definition of the term ''business' is intended for the purpose of interpreting and applying the first proviso to section 2(15) of the Act to include any transaction for a fee or money. An activity would be considered 'business' if it is undertaken with a profit motive, but in some cases this may not be determinativ....