AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 1252
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....ct clause as contained in the memorandum/bye laws of the assessee society are noted hereunder: "(1) To protect the rights and interests of drug dealer members, make them aware of their duties arid make a complete and effective organization for their all round development. (2) To construct complex related to pharmaceutical business and solve all the problems related to pharmaceutical business from time to time. (3) To promote and spread the spirit of brotherhood, fraternity, patriotism, true self- respect and public service among drug dealers members. (4) To develop physical, mental, literary, social, cultural status of drug dealer members and organize seminars and workshops related for pharmaceuticals business for increasing knowledge of members. (5) To get the laws detrimental to the interest of drug dealer members amended, make the new laws that are necessary and administer the implementation of these laws. (6) To abstain from initiating the movement nor sanctioning it till the legal remedies for resolving each business related problem are exhausted, decision to be taken by Governing Body based on majority if deemed necessary. (7) To inculcate the spirit of working ....
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....onsequently, the land is not appearing in the balance sheet. 6. In defense, the learned counsel for the assessee pointed out that as regards disclosure of land in the balance sheet, the Auditor has given the observations in his audit report at page no.29 of the paper book. The assessee society had purchased land out of contribution paid by the members, right from the beginning, the members made contributions essentially for allotment of developed plots and thus the contribution was not without consideration or an act of philanthropy. It was thus contended that the CIT(E) misinterpreted the facts and did not appreciate the distinction between the 'contribution' and 'donation' inasmuch as the members never intended to give donation which would mean parting money without consideration. It was further submitted that there is no dispute over the fact that the assessee society had purchased the land for developing the market place out of the contribution of the members. Also there is no dispute over the fact that the assessee purchased the land in its own name vide the registered purchased deed. Further, there is no dispute over the fact that the assessee had developed the market place ....
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....tax in nation building. 6.3 Other line of arguments raised on behalf of the assessee are listed hereunder: (a) The object of the assessee society includes its aim to inculcate the spirit of working for public interest with honesty, dedication and enthusiasm among drug dealer members. To achieve such object, the assessee society organizes donation camp also. The assessee society strives to provide hygienic and healthy infrastructure to enable members to carry on trade in organized manner under well- developed infrastructure. (b) The activities of assessee society fall within the fourth limb of Section 2 (15) of the Act i.e. 'the advancement of any other object of general public utility' which carries a very wide connotation. (c) The area of operation of the assessee society extends to the whole state of Chhattisgarh as can be seen from memorandum of association of the assessee society. (d) The assessee is essentially a trade association formed with the object of protecting the rights and interest of members engaged in the pharma business. The similarly placed trade association with like objects have been held to be eligible for registration under s.12 AA of the Act on the g....
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.... vs. Chhattisgarh Urology Society (2018) 303 CTR 299 (CG) v. Shri Sarafa Association vs. CIT & Anr. (2007) 294 ITR 262 (MP) vi. Chhattisgarh State Cricket Sangh vs. DCIT (Exemption) (2019) 56 CCH 73 (Raipur- Trib.) vii. All India Rubber Industries Association vs. Addl. CIT & Ors. (2018) 173 ITD 615 (Mumbai- Trib.) viii. Confederation of Real Estate Developers Association of India vs. ACIT (Exemption) (2021) 209 TTJ (Mumbai) 160 6.5 Dealing with scope of enquiry, the learned counsel submitted that at the time of considering the eligibility for registration under s.12AA of the Act, the CIT(E) has to only examine the objects of the assessee society and genuineness of the transaction. The scope of enquiry does not go beyond this as provided under s.12AA(1)(ab) of the Act. The judgment rendered by the jurisdictional High Court in CIT vs. Chhattisgarh Urology Society (2018) 303 CTR 299 (CG) was referred. 6.6 The learned counsel contended that the assessee society do not belong to a particular community/family and any person engaged in pharma business can become member of assessee society regardless of his cast, creed or religion and without discrimination. 6.7 In summation, the ....
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....ncillary or incidental to the primary or dominant object, it would not prevent the institution from validly being recognized as a charity. The test to be applied is whether the object which is said to be non- charitable is the main/ primary object of the trust/ institution or it is ancillary or incidental to the main object which is charitable. 8.4 In a majority judgment of Hon'ble Supreme Court in ACIT vs. Surat Art Silk Cloth Manufacturers Association (1980) 121 ITR 1 (SC), it was observed that: " The test which has, therefore, now to be applied is whether the predominant object of the activity involved in carrying out the object of general public utility is to subserve the charitable purpose or to earn profit. Where profit making is the predominant object of the activity, the purpose, though an object of general public utility would cease to be a charitable purpose. But where the predominant object of the activity is to carry out the charitable purpose and not to earn profit, it would not lose its character of a charitable purpose merely because some profit arises from the activity. The exclusionary clause does not require that the activity must be carried on in such a manner....
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....ational issues related to real estate sector and better standards for its all member associations, having 21 State chapters, 220 city chapters and 20, 000 members, it can safely be held to be for the benefit of a particular section of the public and not for any specified individual. Accordingly, the view taken by the lower authorities that as the assessee trust was set up for providing facilities to a limited group of people and not for the benefit of the general public at large, therefore, it could not be held to be a trust set up for advancement of any other object of general public utility cannot be sustained and is herby vacated.- Ahmedabad Rana Caste Association vs. CIT (1971) 82ITR 704 (SC) followed. For the attainment of its objects, viz., to act as a group of associations/ federations functioning at national and State level with an object to address the national issues relating to real estate sector and better standard for its all member associations, to encourage fraternity, feelings of co- operation and mutual help among the members of the confederation in respect of the subjects connected with the common good of trade, industry and profession of building, construction ....
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....eously notice from the judicial precedents referred to in preceding paragraphs that it is not necessary that object of general public utility should be beneficial to the whole mankind. The object beneficial to a section of the public is also an object of general public utility. Hence, the case of the assessee gets covered in the fourth limb of Section 2(15) of the Act i.e. 'the advancement of any other object of general public utility'. This being so, the assessee would be entitled to the benefit meant for charitable trust as contemplated in the scheme of the Act. 9. We also advert to the other objection of the CIT(E) that assessee society has purchased the land and distributed the same to its members by way of 99 years of lease. In similar facts situation, the co-ordinate bench of Tribunal in ACIT vs. Gujarat Hira Bourse ITA No. 2917/Ahd/2014 dated 22.06.2021 observed as under: "If the primary object of an entity like " Chamber of Commerce, professional association, a bar council, etc" is the promotion of any trade, industry, profession, etc. the fact that the business community or the profession as the case may be would be benefit therefrom, would not take away the object from....