TaxTMI 
TaxTMI 
2026 (7) TMI 1816
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee is a Residents Welfare Association (SSC), constituted for the welfare, maintenance and management of a residential complex. It filed an application in Form No. 10AB seeking registration under section 12AB of the Income-tax Act, 1961. The learned Commissioner of Income Tax (Exemptions), Chandigarh, after examining the objects and activities of the assessee, observed that the society was primarily engaged in providing maintenance, security, housekeeping, facility management and other related services to the residents of a specified residential complex. The assessee was collecting maintenance charges, service fees and other contributions from its members and was also deriving rental income from common facilities. The learned CIT(E), ther....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l precedents to contend that even Residential Welfare Associations have been held to be entitled to registration under section 12A/12AB where their dominant purpose is the advancement of general public utility. It was also submitted that only one opportunity of hearing had been afforded by the learned CIT(E), thereby violating the principles of natural justice. 4. Per contra, the learned Departmental Representative strongly supported the impugned order. It was submitted that the assessee is nothing but a mutual benefit society formed for rendering services exclusively to its members and residents of a particular residential complex. The beneficiaries are neither the public at large nor any sufficiently identifiable section of the public ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....other object of general public utility. The activities admittedly carried on by the assessee consist of maintenance of common areas, housekeeping, security services, operation and maintenance of lifts, sanitation, organising cultural and social programmes, community welfare activities and other facilities exclusively for the benefit of the residents of a particular residential complex. Such activities undoubtedly improve the quality of life of the members of the Association. However, the crucial question is whether these activities amount to "charitable purpose" within the meaning of section 2(15) of the Act. In our considered opinion, the answer has to be in the negative. 6. The concept of charity necessarily presupposes an element of p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... thereby obliterating the distinction between mutuality and charity, which the Legislature has consciously maintained. Charity, as understood both in law and in its traditional philosophical sense, is directed towards benefiting others without regard to personal gain, identity, caste, creed or reciprocal obligation. Assistance rendered amongst members who themselves contribute towards the common fund cannot be elevated to the status of charity merely because the activities are undertaken without a profit motive. Absence of profit by itself is not synonymous with charity. 8. The beneficiaries of the present assessee are confined exclusively to its members and residents of a particular housing complex. There is no element of benefit availa....