TaxTMI 
TaxTMI 
2023 (2) TMI 255
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....mitted that the appeal had been filed online on 25-11-2022, however, the hard copies of form 36 and appeal documents were presented on 29-11-2022 and actual date of filing of the appeal was on 28-11-2022. He further submitted that the appeal could not be filed within time as all the directors of the assessee foundation are out of Jaipur and signed copies were sent by one director by speed post on 24-11-2022 from village Kaflong, District Champawat which was received through speed post on 29-11- 2022. Hence the delay occurred because of late delivery of documents through Speed-post which was beyond the control of the assessee and the delay for one day may kindly be condoned. 2.2 On the other hand, the ld. DR did not raise any objection except praying that the Bench may decide this issue as deem fit and proper in the case. 2.3 After hearing both the parties and submissions of the ld. AR of the assessee, the Bench finds that delay of one day in filing the appeal is condonable as the circumstances were beyond the control of the assessee. Hence, the delay in filing the appeal by the assessee is condoned in view of the decision of Hon'ble Supreme Court in the case of Collector, lan....
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....be examined by the ld. CIT(E). From the submissions/ documents filed by the assessee foundation, the ld. CIT(E) noted that the assessee trust does not perform the activity of charitable in nature but business activities are visible. Hence, the ld. CIT(E) rejected the application of the assessee for seeking registration u/s 12AB by observing as under:- ''05. It is also found from objects of applicant trust that the object Nos. A- 1,2,3, mentioned in the MOA/Deed are having elements of commercial/business nature:- Object No. (1) ''.......Maintaining seed banks and nurseries and providing training on related activities..." This object focuses on establishing of Training Centres in the field of agriculture/ environment. In the present economic system in India, such institutions are being run as a profit making/ commercial institution and therefore these cannot be termed as charitable. Moreover, neither this particular object mentions that establishment of impugned intuitions will be run without any profit motive nor in the object clause without any profit motive have been referred to. Hence, it cannot be deducted that the trust will carry out charita....
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....rrespective of the nature of use or application, or retention, of the income from such activity." In nutshell, the meaning of the proviso to section 2(15) of the Income Tax Act. 1961 is that while deciding the case where business activities are visible, the predominant object test is to be applied and also the business activities should be in the course of actual carrying out of such Advancement of any other object of General Public Utility activities i.e. such business activities should only be incidental to the charitable object and hence should not be the pre-dominant or primary activity by itself. The emphasis of the section for "any other object of General Public Utility" is that it should be for the benefit of General Public. It is primarily the objects which decide the fate of application. If the object itself talks about or intends for business activity, then it cannot be considered as charitable one. 07. Sufficient opportunity has been provided to the applicant to produce details and furnish explanations in support of its claim for registration u/s 12AB of the Income Tax Act, 1961 but the applicant has failed to do. In the light of the above facts, the ap....
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....1,2,3,B-10,11,15,19,21,22,23,29,31,34,37,39 & 40 are having elements of commercial/business nature and various objects are related to the activities in abroad. Please clarify how it is charitable objects in the light of section 2(15) and explain why the application filed by you should not be rejected........." 7. The show cause notice was very well replied in detail by the foundation (PB 81-83). However the application was rejected by him without properly considering the reply and material on record. 8. In the rejection order the ld. CIT(E) picked up few words from the main object clauses of MOA of the foundation as under- Object no. A-1 ".... Maintaining seed banks and nurseries and providing training on related activities....." Object no. A-2 ".....Conducting forest immersion programs and training them in skills that help the environment....... Disseminating it as required through media and publication....." Object no. A-3 "......Supporting learning programs including vocational training, teacher training, incubating alternative running projects......" Finding of the ld. CIT(E)- The finding ....
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....The fact that the carrying on of charitable activities results in a surplus does not mean that Assessee exists for profit. 'Profit' means that owners have a right to withdraw the surplus for any purpose including personal purpose. However, if the surplus is ploughed back into the same charitable activities, the Assessee cannot be said to be carrying out commercial activities in the nature of trade, commerce or business. We again place reliance on judgment of Gujarat High Court referred in para 9 supra.[ Para 163(i) at page 83 of Judgment] 12. We further draw attention of the Hon'ble Bench towards the Income & Expenditure account of the foundation (PB-36). It can be seen that entire source of funding is donation. The foundation has not charged a single rupee from any of the beneficiary of the programmes conducted by the foundation. We also draw attention to the activities carried out by the foundation (PB 45-57). It can be seen that the focal point of activities and objects of the foundation is preservation of environment. 13. We respectfully submit that the allegation of the ld. CIT(E) that the MOA does not the mention that the institution will be run without prof....
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....ed electronically (PB 81-83).The ld. CIT(Exemptions) rejected the application for registration u/s 12AB on the basis of following findings13 • Sufficient opportunity has been provided to the applicant to produce details and furnish explanations in support of its claim for registration u/s 12AB of the Income Tax Act, 1961 but the applicant has failed to do so. • It is primarily the objects which decide the fate of application. If the objects itself talks about or intends for business activity, then it cannot be considered as charitable one. It is also noteworthy to mention that the assessee trust was granted provisional registration vide order dated 22-11-2021 by the Ld. CIT (E). As regards the rejection of registration u/s 12AB of the Act by ld. CIT(E), it is noted from the available records that the assessee foundation has furnished all the details desired by the ld. CIT(E) vide paper book pages 12,13,14-24, 24,31-76 and 81-83. It is also noted that the assessee trust tried to submit all the details/documents during the course of proceedings before the ld. CIT(E). It isfurther noted from the order of the ld. CIT(E) in first para that only part of the d....