TaxTMI 
TaxTMI 
2019 (6) TMI 583
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....cience and technology and prosperity of Humanity by way of establishment of different Educational Research & Training Institutions. The Institutions can be opened in any state/ Union territory/Abroad under any name as per resolution passed by the founder Trustees from time to time, to help the poor/needy and intelligent students for their welfare and to spread education in the society at large, special emphasis shall be done for welfare of poor section of the society. 5. The Ld. CIT(E) after going through the submissions held that the assessee is a Franchisor of Zee Learn Ltd. and the intellectual property rights is vested with the franchisor, the ZEE LEARN LIMITED and the applicant trust merely remains an agent to the franchisor company for promoting its business on commercial basis on the terms and conditions set by the franchisor company for its own benefit, being a commercial enterprise. He held that this fact totally negates the essence of charity and the applicant trust's claims of being charitable get impinged by the arrangement that caters to enhancing the receipts of the franchisor. Independence of the applicant to pursue activities, claimed to be charitable is severe....
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....ITA No. 142 of 2007. Further he extensively quoted the provisions of section 2(15) pertaining to the charitable purpose in support of his argument and filed paper book of 213 pages consisting of submissions before the lower authorities, Franchisee Agreement and case laws. 11. Against the argument of the Ld. AR, the departmental representative heavily relied on the order of the Ld. CIT(E) in rejecting the registration and submitted that decisions in the case of Rajah Sir Annamalai Chettiar Foundation Vs CIT 15 taxmann 313, CIT Vs. National Institute of Aeronautical Engineering Society 181 Taxmann 205 support the rejection of the registration. 12. We have heard the Ld. Representatives of both the parties and perused the material available on record. The aims and objective of the trust have been perused. They consist of to work for upliftment of Quality Education i.e. Technical Education, Basic education, Higher education, Professional education, ancient Yogic and spiritual education and Medical/Health Education etc. and to promote & develop education, employment, science and technology and prosperity of Humanity by way of establishment of different Educational Research & Training I....
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....in Section 3 of the Information Schedule which shall be inclusive of service taxes at the time of execution of this Agreement. The said Franchisee Fee and the tax thereon are non-refundable and the Franchisee shall not be entitled to claim a refund of the same for any reason whatsoever, including but not limited to earlier termination of this Agreement. (b) Without limiting the Franchisor's right to terminate this Agreement pursuant to Clause 15, in the event that/any amount is not paid by the Franchisee to the Franchisor when due such amount will bear late payment interest calculated on a daily basis from the due date for payment at the rate of 24% (Twenty Four percent) per annum. (c) The Franchisee shall collect fees from the Students for the relevant Programs in accordance with the prescribed fee schedule provided by the Franchisor from time to time. The Franchisee shall under no circumstances vary from the fee range as indicated by the Franchisor unless changes are approved by the Franchisor. The Franchisee is also not authorized to offer discounts to Students except as approved in writing by the Franchisor. In the event the Franchisee deviates from the quantum of fees ....
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....nd of these facts emanating the provisions of the section 2(15) are being revisited. This section reads as under: "2(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 historic 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 cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless - (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution undertaking su....
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....t clear that the Commissioner is not supposed to allow the registration with blind eyes. In the instant case, the order passed by the Commissioner showed that he had considered the income and expenditure account of the society for the financial years 2000-01 to 2002-03, and concluded that the assessee was not carrying on any charitable activity as its dominant object was to earn profits under the garb of 'education'. The Commissioner had further observed that the assessee was charging substantial fee from the students and was making huge profits. The order passed by the Commissioner further disclosed that the surplus had been transferred to the capital fund of the assessee. It had been further clarified in the finding of the Commissioner that no expenditure was made by the assessee for the charitable purpose. Mere imparting education for primary purpose of earning profit cannot be said to be a charitable activity as interpreted by the Apex Court in Municipal Corpn. of Delhi v. Children Book Trust [1992] 3 SCC 390. In the expression 'charitable purpose', charity is soul of the expression. Mere trade and commerce in education cannot be said to be a charitable purpos....