TaxTMI 
TaxTMI 
2020 (4) TMI 716
X X X X Extracts X X X X
X X X X Extracts X X X X
....iving benefit to public at large and giving benefit to group of deceased members. 4. Assessee contended that in Memorandum of Association, it is mentioned that the trust shall be a voluntary, non-political, non profit making charitable and social services organization. " To do all necessary acts for the general welfare and upliftment of the members." 5. And ld. A.R. cited an order of ITAT Mumbai Bench in ITA No. 319/Mum/2012 in the matter of M/s. The Bombay Presidency Golf Club Ltd. and stated that registration was given to that Club though club was giving its facilities and benefits to its members only and relief was granted to the assessee with following observation: 10. Thus, the test of business, trade or commerce has to be viewed from the angle that the activity of the trust has continued on business principle and pursued with reasonable continuity. If the principle and ratio laid down by the Honble High Court is applied in the instant case, it would be seen that none of its receipts can be said to be arising or accruing from the activities which have been carried out for the purpose of business or in the nature of trade or commerce. All its activities are towar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 will be decided based on the nature, scope, extent and frequency of the activity". "There are industry and trade association who claim exemption from tax under section 11 on the ground that their objects are for charitable purpose as these are covered under any other object of general public utility. Under the principle of mutuality, if trading takes place between persons who are associated together and contribute to a common fund for the financing of some venture or object and in this respect have no dealings or relations with any outside body, then any surplus returned to the persons forming such association is not chargeable to tax. In such case, there must be a complete identity between the contributors and the participants. Therefore, where industry or trade associations claim both to be charitable institutions as well as mutual organizations and their activities are restricted to contributions from and participation of only their members, these would not fall under the purview of the proviso to section 2(15) owing to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 - High Court, however, held that beneficiaries did not constitute a well-defined section of public connected together by a common quality or characteristic - Whether to serve a charitable purpose it is not necessary that object should be benefit whole of mankind or all persons in a particular country or state, and it is sufficient if intention to benefit a section of public as distinguished form a specified individual is present - Held, yes - Whether predominant content and requirement of clause defining "beneficiaries" in constitution of assessee was factum of their belonging to Rana community of Ahmedabad and common quality, therefore, uniting potential beneficiaries into class consisted of being members of Rana caste or community of Ahmedabad whether as natives or as being admitted to that caste or community under custom or usage and mere fact that a person Rana community who was not an original native of Ahmedabad had to prove his credentials according to custom and usage of that community to get admitted into that community did not introduce a personal element which would detract from impersonal nature of common quality -Held, yes - Whether, therefore, income of assessee, tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in charitable activity. 11.In the matters of Commissioner of Income Tax vs Vijay Vargiya Vani Charitable Trust and Fifth Generation Education vs Commissioner Income Tax, it is held that at the stage of Section 12A, the Commissioner is not to examine the application of income. All that he may examine is whether the application is made in accordance with the requirements of Section 12A read with Rule 17A and whether Form No.10A has been properly filled up. He may also see whether the objects of the trust are charitable or not. At this State, it is not proper to examine the application of income. 12.In the case at hand, the order passed by the CIT does not say in definite terms, that the objects of the society are not charitable in nature. Merely because the trust consists of Urologist Doctors and the charitable activity may mutually benefit those members, the object itself would not cease to be charitable in nature. 13.For the foregoing, we are satisfied that the Appellate Tribunal has rightly interfered with the order passed by the CIT. No substantial question of law arises in this appeal for determination in view of the plain language of Section 12A of ....