2026 (4) TMI 843

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....Standing Counsel for the appellant and Sri. Anil D. Nair, learned Senior Counsel, instructed by Sri. Aravind Sreekumar - learned counsel for the respondent, at length, we find no reason to admit this Appeal, because no substantial question of law is involved, or called into question. 2. We will state our reasons for saying as afore presently. 3. When the respondent applied for exemption under Section 12A of the Income Tax Act, 1961 ('Act' for short), asserting themselves to be engaged only in charitable activities, the same was rejected by the appellant-Commissioner, through Annexure A order, holding that, though two of their activities, namely, 'Solar Panel Installation Unit' and 'Kexcon Neethi Medical Stores', appear to be in conson....

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....out admitting it in any manner; but that, the Authorities appear to have taken such a stand incorrectly. 8. On the facts, we notice that the assertion of the respondent is that they provide rehabilitation to their own members - who are all ex-servicemen, and their families; and that the income that they generate through the employment of such persons, as also that from the 'Solar Panel Installation Unit' and 'Kexcon Neethi Medical Stores', is used solely for their upliftment and nothing else, after reserving an exiguous amount, less than 4%, for their administrative and other charges. 9. The specific argument of Sri. Anil D. Nair - learned Senior Counsel, is that the activities of the assessee are in no manner profitable in nature and....

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...., saying that this is a 'business activity'. 13. It is well settled, without requirement for us to expatiate, that, when it comes to the evaluation of the factual question posed, what is relevant is the manner in which the income of the assessee is put to use. This, certainly, will require an incisive assessment of their objectives, as available in their Memorandum of Association; and we notice that the learned 'ITAT' has done so. 14. It is equally compelling that, even in Annexure A, the Commissioner found factually that the net profit ratio of the respondent - assessee, is a mere 3.79% for the Financial Year 2020-21 and 3.37% for the Financial Year 2021-22. Obviously, when these figures are not in contest, the indubitable presumptio....