TaxTMI 
TaxTMI 
2024 (11) TMI 1259
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....3. The same was rejected by this impugned order on the ground that the fund raising programme carried out by the assessee trust by way of coupon sales and mega lucky draw were in the nature of business activities which is not identical to carry out the object of the trust and violation of conditions specified in Section 12AB(4) of the Act. Thus CIT(E) denied the registration u/s. 12AB of the Act and also cancelled the provisional registration granted to the assessee trust. 3. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: 1. On facts and circumstances of the case and in law, the order passed by the Ld. CIT(E) is bad in law, Illegal besides being in violation of principle of natural justice & equity as passed without considering the material already placed on record, as such it is liable to be quashed and set aside. 2. On facts and circumstances of the case and in law, the Ld. CIT(E) has grossly erred in rejecting the application filed u/s.12AB of the Act and cancelling the provisional registration, when there is no justification In passing such Impugned order. The said application may kindly be allowed a....
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.... incidental to attainment of its objects or not maintain separate books of accounts by the trust. (b) as may be verified from the audited income and expenditure account, the trust has raised income by donations through coupon subscription, FD interest and other direct donations from entities, which has been essentially incidental to attainment of its objects. Hence there is no requirement to maintain separate books of accounts. (c) Application of part of its income for private religious purposes not for the benefit of public As may be perused from the table appearing on page 7 of the impugned order, there is no such income having been applied for private religious purpose. (d) Application of part of income for benefit of any particular religion, community or caste. (d) As stated against clause (c) above, there has been not a single rupee of income applied for the benefit of any religion, community or caste. (e) Activity carried out is not genuine or not in accordance with condition attached to registration. (e) There is no finding of the authority that the activity carried out by the appellant is not genuine nor there is any infringement of any conditi....
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....rust organizing Garba event at Baroda during Navratri period by selling tickets and the surplus out of that Garba event is used for charitable purposes which was held to be not in the nature of trade commerce or business. The Hon'ble High Court confirmed the Coordinate Bench decision of this Tribunal and dismissed the appeal filed by the Revenue by observing as follows: 11. The Appellate Tribunal, while dismissing the appeal of the Revenue held as under: "4. There are thus two issues requiring our adjudication in this appeal first, whether or not the CIT(A) was justified in holding that proviso to Section 2(15) will not have any application on the facts of this case and thus benefit of Section 11 cannot be declined to the assessee; and, second- whether or not the CIT(A) was justified the expenses, like assistance to voluntary agencies, management assistance and training, public education programme, research and publications and expenses for community service, as application of income for the purposes of Section 11 of the Act. 5. To adjudicate on these issues, only a few material facts need to be taken note of. The assessee before us is a society registere....
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....s also pointed out that the assessee contributes by strengthening the services in education, by providing vocational training to the disabled, helping orphans, empowering women through various programs and providing mid meal to poor students. The details of the eye camp and thalassemia screening and detection camp conducted by the assessee were also furnished. The assessee also gave details of how the monies are spent to these ends. As regards the application of proviso to Section 2(15), it was pointed out that only when the institutions are carrying out activities on commercial lines with profit motive, this provision comes into play. It was pointed out that surplus funds are purely incidental and the institution is not run on the commercial lines at all. Elaborate legal submissions were made on the scope of proviso to Section 2(15) and its legislative history and background. A reference was also made to CBDT circular No. 11/2008 dated 29th December 2008 in support of the proposition the proviso to Section 2(15) will not apply in respect of activities involving relief to poor, education or medical relief, even if it incidentally involves the carrying on of commercial activities. I....
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....d fully for the purposes of the objects of the assessee. As held in many pronouncements, the expression "trade", "commerce' and "business" as occurring in the first Proviso to Section 2(15) of the Act must be read in the context of the intent and purport of section 2(15) of the Act and cannot be interpreted to mean any activity which is carried on in an organized manner. The purpose and the dominant object for which an institution carries on its activities is material to determine whether the same is business or not. The object of introducing the first proviso is to exclude the organizations which are carrying on regular business from the scope of "charitable purpose". An activity would be considered 'business' if it is undertaken with a profit motive, but in some cases, this may not be determinative. Normally, the profit motive test should be satisfied, but in a given case the activity may be regarded as a business even when the profit motive cannot be established/ proved. In such cases, there should be evidence and material to show that the activity has continued on sound and recognized business principles and pursued with reasonable continuity. There should be facts ....