TaxTMI 
TaxTMI 
2026 (8) TMI 466
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....e are that the assessee-trust filed an application in Form No. 10 AB seeking regular registration under section 12AB of the Income-tax Act. During the course of proceedings, the learned CIT(Exemption) called upon the assessee to furnish various documents to establish the genuineness of its activities, the manner in which its objects were being carried out and its compliance with the provisions of the Act. Upon consideration of the reply and the financial statements furnished by the assessee, the learned CIT(Exemption) observed that the predominant activity of the trust was providing transport facilities to the students of St. Xavier's School, Chandigarh, against collection of transportation charges. The financial statements further reve....
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....CIT(Exemption). It was submitted that the assessee is neither running an educational institution nor imparting education. Its only activity is providing transportation facilities to students on payment of charges. Such activity is purely in the nature of rendering transport services and is being carried on for consideration with recurring surplus. It was further submitted that merely because the beneficiaries happen to be students of a school, the activity itself does not become "education" within the meaning of section 2(15). If such an argument is accepted, every commercial service provider connected with schools would become entitled to registration under section 12AB, which was never the intention of the Legislature. It was accordingly ....
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....al affairs or the earning of surplus. We are unable to persuade ourselves to accept the aforesaid submission. Education undoubtedly requires several ancillary facilities for its effective functioning. Transportation, hostel accommodation, food, electricity, internet connectivity, school buildings, furniture, blackboards, uniforms, books, stationery and numerous other infrastructural services facilitate the process of education. However, the mere fact that a particular service facilitates education does not ipso facto convert the service provider into an institution existing for the charitable purpose of education. If such an expansive interpretation is accepted, every transport operator, caterer supplying meals, electricity distribution com....
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..... These virtues are not merely moral ideals but explain the true character of selfless action and public welfare. 8. The Indian philosophical tradition draws a subtle yet significant distinction between the discharge of one's obligation and the exercise of Daya and Karuna. Compassion or mercy shown towards one' s own family members, dependants or persons to whom one owes a legal, contractual or moral obligation is ordinarily regarded as the discharge of one's duty. It is only when kindness transcends personal relationships and reciprocal obligations and is extended to those from whom nothing is expected in return and whose welfare alone is the motivating consideration that it assumes the true character of Daya or Karuna. It i....
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....cannot, merely for that reason, be elevated to the status of charity. 11. We are conscious of the settled legal position that the mere generation of surplus does not by itself destroy the charitable character of an institution. However, that principle presupposes that the underlying activity is itself charitable. The issue before us is not whether surplus has been generated but whether the very nature of the activity carried on by the assessee constitutes a charitable purpose. If the dominant activity is essentially commercial, the subsequent application of income cannot convert such activity into charity. 12. We also do not find merit in the reliance placed upon the decision of the Hon' ble Supreme Court in Ananda Social and Educ....