TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 1362
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....o to section 2(15) of the Act applies to a case, then the benefits of sections 11 and 12 will not be available to such an assessee. The provisions to section 2(15) of the Act defines what are charitable purpose. The proviso to section 2(15) of the Act lays down that if the objects of society are advancement of any other general public utility and if the nature of the activity carried on by such society is in the nature of trade, commerce or business, then the same will not be regarded as charitable purpose. 4. The assessee submitted before the AO that the proviso to section 2(15) of the Act has to be applied on a case-to-case basis considering the facts and circumstances of each case. It was contended that the assessee's activities are performed without any profit motive and that each and every activity is carried on with the motive to inculcate innovative housing techniques and lowcost housing techniques with utmost care by adopting cost effective techniques without compromising the quality of the work or activities undertaken or executed. The assessee submitted that they used recycled wood for doors and frames, exposed laterite, mud plastering, clay tiles etc. during the executi....
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....ementation of housing' programme. c) An agency to arrange for financial assistance for house construction d) A forum to organize exhibitions, seminars, orientation programmes, demonstrations on housing and publish useful date and literature on housing and allied activities e) A Research and Development institution and consultant in the field of housing ....................... 7. The AO was of the view that the activities of the assessee trust are clearly hit by the First proviso to clause (15) of Section 2 for the reasons enumerated hereunder:- a) The main object of the assessee was assimilation and dissemination of information pertaining to innovative ideas in housing. b) From the above, it can beyond a shadow of doubt be stated that the objects of assessee fall under the limb "advancement of any other object of General Public Utility". c) Thus the 1stProviso to Sec. 2(15) of the I.T. Act as amended w.e.f. 01.04.2009 would be applicable in the case of theassesse. It is an undisputed fact that innovative, environmental friendly housing was for the benefit of all sections of Society and the assessee is not catering solely to the poor and needy. Hence, the objects of....
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....it can be categorically stated that none of these activities have been carried out during the year. j) The assesse has not furnished any evidence in respect of any innovation/ new techniques developed / propagated by it for the construction of residential houses. k) Even the Work Flow clearly shows that it is functioning in the same way as an ordinary business entity engaged in the business of undertaking Government Contracts for construction of roads, nallas etc. The only difference being that the assesse is entitled to 10% of the total work being carried out in a year without getting into the Tendering Process which is normally followed. All the other procedures / steps are followed by every Contractor undertaking Government Contracts. 8. The AO held that the actual activities carried out by the assessee are in the nature of pure commercial activity carried out by any Contractor. The work/activity carried out by the assessee during the entire year can only be described as carrying out Civil Construction Work. There exist no distinction between the 10% work carried out by the assessee Trust and 90% of the balance work tendered to Civil Contractors by the district authorities.....
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.... act as seminal agent. The appellant before me also not furnished any evidence in respect of any innovation / new techniques developed / propagated by it for the construction of residential houses. The AR has not pointed out the amounts spent for attaining its objects. 5.6 The AO listed out the works actually carried out by the appellant which are only in the nature of commercial contract works. I fully agree with the AO's view that if the assessee's contention of carrying on charitable activity on account of having built roads, nallas, commercial buildings is accepted, then every Civil Work Contractor would be entitled to claim that they are carrying out Charitable activities. I have carefully considered the activities performed and objectives of the trust. There is no link between them. Therefore, I am of the considered view that the activities of the trust are clearly hit by the proviso to 2(15) of the Act. There is no reason to interfere with the assessment order. The action of 5he AO is hereby confirmed. The grounds on the issue are rejected." 12. Aggrieved by the order of CIT(A), assessee has preferred present appeal before the Tribunal. Before the Tribunal, learne....
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....ess carried on by the assessee is incidental to the objects mentioned in the Memorandum of Association. On the other hand, it is a pre-dominant activity carried on by the assessee. In other words, 'incidental' is an offshoot of the 'main activities', inherent bye-product of pre-dominant activities. The activities complementing the main activities are not in the nature of incidental to the business. It is incidental if it is supporting the activities to the main activities. The Tribunal held that the activities carried on by the assessee is itself principal activities and not incidental activities. Hence, it is not possible to hold that the construction activities carried out by the assessee is not protected by the provisions of section 11(4A), there is no merit in the argument of the assessee. The Tribunal held that the activities carried on by the assessee were not incidental to the attainment of the objects of the Trust. There is no connection between the activities relating to construction business and the attainment of the objects of the trust. The mere fact that whole or some part of the income from running of the construction business is used for charitable pu....