2016 (8) TMI 1305

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....udgment and 1 657/2007 2003-04 15-5-2007 passed in I. T. A. No. 2735/Del/2006 2 717/2007 2003-04 31-1-2007 passed in I. T. A. No. 2903/Del/2006 3 533/2011 2003-04 25-7-2005 passed in I. T. A. No. 690/Luc/2003 4 320/2007 1992-93 10-11-2006 passed in I. T. A. No. 390 (Alld.)/2006 5 96/2009 2004-05 2005-06 2003-04 30-5-2008 passed in I. T. A. Nos. 4815 and 4816/Del/2007 ; and 30-5-2008 passed in I. T. A. No. 168 (Ag.)/2007 6 274/2009 2003-04 5-12-2008 passed in I. T. A. No. 459/Agr/2007 7 263/2008 2003-04 7-8-2007 passed in I. T. A. No. 107/Alld/2007 8 349/2008 - 14-3-2008 passed in I. T. A. No. 32/Luc/2008 4. These appeals were admitted on the following substantial question of law:- "Whether on given facts and circumstances of case, Hon'ble Tribunal was justified in law in holding that local authority (Hapur Pilkhuwa Development Authority) was eligible for grant of registration under Section 12AA of IT Act, 1961." 5. The leading appeal is numbered as 657 of 2007. Since facts are common in all appeals, they are taken from said appeal. 6. Parties are referred to as appellant and respondent respectively. 7. The fa....

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....gious purpose. We have to examine whether HPDA can be said to be an "Institution" created wholly for charitable purpose. 13. The term "charitable purpose" is defined in Section 2(15) of Act, 1961 and before Finance Act, 2008 whereby it was substituted with effect from 01.04.2009 and has been made much detailed, it read as under: "(15) "charitable purpose" includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility;" (emphasis added) 14. Now it has been substituted with effect from 01.04.2009 and reads as under: "(15) "charitable purpose" includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historical interest and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of 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 ces....

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....ity, namely, "Lucknow Development Authority", which is also constituted under U.P. Act, 1973, a similar question, whether activities of Development Authority can be said to be 'charitable' as defined under Section 2(15) came up for consideration before a Division Bench in CIT Vs. Lucknow Development Authority 2014 (98) DTR (All) 183 and Court held as under: "21. We have heard learned counsel for the parties and gone through the material available on record. It is undisputed fact that the assessee is a "statutory authority" which was established under the provisions of the Uttar Pradesh Planning and Development Act, 1973. In the instant case, prior to 1st April, 2003, the assessee was enjoying exemption under Section 10(20A) and Section 10(29). When these provisions were amended w.e.f. 1st April, 2003, then the necessity arose to register these institutions under Section 12A. In view of the objects, there is no good reason for holding that statutory bodies could not be treated as "charitable" within the meaning of Section 2(15). The object of the "Authority" is to provide shelter to the homeless people, therefore, there is no objectionable material to treat these institu....

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....ved that the Forest Corporation being an statutory entity is entitled for the registration under Section 12A of the Act. The said observations was upheld by the Hon'ble Apex Court vide its order dated 12th May, 2011 in Special Leave Petition (Civil) No. 2590 of 2011. 28. We may also like to refer a C.B.D.T. Circular No. 11 of 2008 dated 19th December, 2008 [(2009) 221 CTR (St) 1 : (2009) 17 DTR (St) 1] wherein the applicability of the commercial activities in respect of charitable purpose has been clarified. The said circular is reproduced as below: "2.2. 'Relief of the poor' encompasses a wide range of objects for the welfare of the economically and socially disadvantaged or needy. It will, therefore, include within its ambit purposes such as relief to destitute, orphans or the handicapped, disadvantaged women or children, small and marginal farmers, indigent artisans or senior citizens in need of aid. Entities who have these objects will continue to be eligible for exemption even if they incidentally carry on a commercial activity, subject, however, to the conditions stipulated under Section 11(4A) or the seventh proviso to Section 10(23C), which are that- (i) t....