2015 (10) TMI 2715

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....vities and objects are not charitable.'' 2.1 None appeared on behalf of the assessee - appellant on the date of hearing. Therefore, the Bench decided to proceed in the matter ex-parte based on the materials available on record. 2.2 We have heard the ld. DR and perused the materials available on record. Brief facts of the case are that the trust was created on 12-05-1981 through the Gazette Notification and it filed an application in form No. 12A on 31-05-2013 seeking registration u/s 12A(a) of the I.T. Act. The ld. CIT on perusal of the documents filed by the trust alongwith its application observed that the trust filed a copy of the Notification alongwith its application for registration instead of the original trust deed as is requi....

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....on 2(15) of the Act and its activities cannot beheld to be for charitable purposes. In this regard, reference can be drawn to to CBDT Circular No. 11 of 2008 dated 19-12-2008, the relevant provisions of which are reproduced hereunder:- ''3. The newly inserted proviso to Section 2(15) will apply only to entities whose purpose is ''advancement of any other object of general public utility'', i.e. the fourth limb of the definition of ''charitable purpose'' contained in Section 2(15). Hence, such entities will not be eligible for exemption u/s 11 or u/s 10(23C) of the Act if they carry on commercial activities. Whether such an entity is carrying on an activity in the nature of trade, commerce, or business is a question of fact which....

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....be said to be engaged in a charitable activity within the meaning of section 2(15) of the Act. As a corollary to this, what needs to be examined is that where an object of general public utility is not merely a mask to hide the true purpose or rendering of any service in relation thereto, and where such services are being rendered as purely incidental to or as subservient to the main objective of "general public utility", whether the carrying on of bona fide activities in furtherance of such objectives of "general public utility" will also be hit by the proviso to section 2(15) of the Act. 2.4 In the instant case, the matter therefore, requires detailed examination in terms of main objects of Urban Improvement Trust, the relevant governi....