TaxTMI 
TaxTMI 
2021 (10) TMI 1252
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....rs who are engaged in pharma business. The object 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 Govern....
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...., in reciprocation of the contribution, the assessee gave the land after development of market and development of plots to its members, and, consequently, 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 ....
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....rs conducted by the Income Tax Officials for creating awareness amongst members about their statutory duties under the provisions of Act in particular and duties towards the nation in general and role of income 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 ....
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....egistration under s.12AA of the Act: i. Addl. CIT vs. Surat Art Silk Cloth Manufacturers Association (1980) 121 ITR 1 (SC) ii. CIT vs. Gujarat Maritime Board (2007) 295 ITR 561 (SC) iii. i . CIT vs. Andhra Chamber of Commerce (1965) 55 ITR 722 (SC) iv. CIT 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 (201....
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....y as noted in paragraph no. 3, one cannot say that the objects are not charitable in nature. 8.3 The Hon'ble Supreme Court in DIT vs. Bharat Diamond Bourse (2003) 259 ITR 0280 has held that if the primary or dominant purpose of institution is charitable and another object which by itself may not be charitable but is merely ancillary 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....
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....t any profit motive." Carrying on of similar activities were thus approved for registration. 8.6 We find that the Mumbai Bench of the Tribunal in Confederation of Real Estate Developers Association of India vs. ACIT (Exemption) (2021) 209 TTJ (Mumbai) 160 has held as under:- "Since the asses see- trust has been set up with the object to address the national 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 natio....
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....about the legal provisions and duties and obligations under Income Tax Act and other laws to help them becoming a law abiding citizens. In this background, we are of the opinion that endeavors of the assessee society tantamounts to advancement of public utility and hence making such objects charitable in nature and susceptible to s.2(15) of the Act. Significantly, we simultaneously 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. Gujar....