TaxTMI 
TaxTMI 
2026 (8) TMI 1738
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....d 12 of the Act without appreciating that the assessee is involved in widespread commercial activities like sale of forms, Tender Fees, N. A. Charges, Fine & Forfeiture, Transfer Fees, etc. for the various services rendered by the assessee for carrying out the activity of housing schemes which is covered by provisos to Section 2(15) r.w.s. 13(8) of the Act? [B] "Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in allowing the accumulation of 15% u/s.11(1)(a) of Rs.5,01,08,514/- without appreciating the fact that once the provision of Section 2(15) r.w.s. 13(8) is applicable, the assessee forfeits all the exemptions under Sections 11 and 12 of the Act?" [C] "Whether on the facts and in the circumstances of the case, the Appellate Tribunal is justified in allowing the accumulation u/s. 11(2) of Rs.6,51,38,141/- without appreciating the fact that once the provision of Section 2(15) r.w.s. 13(8) is applicable, the assessee forfeits all the exemptions under Sections 11 and 12 of the Act?" [D] "Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in allowing the assessee's a....
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....The controlling part of section 10(23C) along with the relevant clauses (iv) and (v) seek to exclude income received by the concerned charities. However, the provisos hedge such exemption with conditions. The seventh proviso - much like section 11(4A) and the definition - carve out an exception, to the exemptions such that income derived by charities from business, are not exempt. The seventh proviso virtually echoes section 11(4A) in that business income derived by a charity (in the present case, the GPU charities) which arises from an activity incidental to the attainment of its objective is not per se excluded. 170. Classically, the idea of charity was tied up with eleemosynary51. However, "charitable purpose" - and charity as defined in the Act have a wider meaning where it is the object of the institution which is in focus. Thus, the idea of providing services or goods at no consideration, cost or nominal consideration is not confined to the provision of services or goods without charging anything or charging a token or nominal amount. This is spelt out in Indian Chamber of Commerce (supra) where this Court held that certain GPUs can render services to the public with....
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....lopment of housing, town planning, development of industrial areas, or regulation of any activity in the general public interest, supply of essential goods or services - such as water supply, sewage service, distributing medicines, of food grains (PDS entities), etc.; (b) While carrying on of such activities to achieve such objects (which are to be discerned from the objects and policy of the enactment; or in terms of the controlling instrument, such as memorandum of association etc.), the purpose for which such public GPU charity, is set-up - whether for furthering the development or a charitable object or for carrying on trade, business or commerce or service in relation to such trade, etc.; (c) Rendition of service or providing any article or goods, by such boards, authority, corporation, etc., on cost or nominal markup basis would ipso facto not be activities in the nature of business, trade or commerce or service in relation to such business, trade or commerce; (d) where the controlling instrument, particularly a statute imposes certain responsibilities or duties upon the concerned body, such as fixation of rates on pre-determined statutory basis, or....
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....enactment or instrument concerned, its underlying policy, and the nature of the functions, and activities, of the entity claiming to be a GPU charity. If in the course of its functioning it collects fees, or any consideration that merely cover its expenditure (including administrative and other costs plus a small proportion for provision) - such amounts are not consideration towards trade, commerce or business, or service in relation thereto. However, amounts which are significantly higher than recovery of costs, have to be treated as receipts from trade, commerce or business. It is for those amounts, that the quantitative limit in proviso (ii) to section 2(15) applies, and for which separate books of account will have to be maintained under other provisions of the IT Act. (ii) Statutory regulatory bodies/authorities." "253. In view of the foregoing discussion and analysis, the following conclusions are recorded regarding the interpretation of the changed definition of "charitable purpose" (w.e.f. 1-4- 2009), as well as the later amendments, and other related provisions of the IT Act. A. xxx xxx xxx B. Authorities, corporations, or bodie....