Bahara Shiksha Vikas Evam Sudhar Samiti, Meerut V. CIT, Meerut

ITA 1045/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69265 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-08-2013
• Assessment Year: misc
• Appeal Filed On: 02-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M B REDDY
• Assessee Lawyers: SUMIT GOEL CAS
• Keywords: Charitable institution
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.1045/DEL/2012 1045/DEL/2012 1045/DEL/2012 1045/DEL/2012 BAHARA SHIKSHA VIKAS EVAM BAHARA SHIKSHA VIKAS EVAM BAHARA SHIKSHA VIKAS EVAM BAHARA SHIKSHA VIKAS EVAM SUDHAR SAMITI, SUDHAR SAMITI, SUDHAR SAMITI, SUDHAR SAMITI, VILLAGE BADHLA KAITHWADA, VILLAGE BADHLA KAITHWADA, VILLAGE BADHLA KAITHWADA, VILLAGE BADHLA KAITHWADA, MEERUT. MEERUT. MEERUT. MEERUT. PAN : AABTB6 PAN : AABTB6 PAN : AABTB6 PAN : AABTB6322R. 322R. 322R. 322R. VS. VS. VS. VS. COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX, MEERUT. MEERUT. MEERUT. MEERUT. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJ KUMAR AND SHRI SUMIT GOEL, CAS. RESPONDENT BY : SHRI M.B.REDDY, CIT-DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED COMMISSIONER OF INCOME-TAX, MEERUT DATED 16 TH DECEMBER, 2011 PASSED UNDER SECTION 12AA OF THE INCOME-TAX AC T, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT LD.CIT, MEERUT HAS NOT JUSTIFIED IN TREATI NG THE CHARITABLE WORK TO CONSTRUCT SHUSHK (DRY) SHAUCHALY A (LATRINES) IN THE VILLAGES FOR PROPER SANITATION WI TH THE HELP OF STATE DEVELOPMENT AGENCIES AS WORK FOR PUBLIC UT ILITY. HOWEVER THE CLAIM OF THE ASSESSEE WAS COMES UNDER T HE PROVISION OF ENVIRONMENT FOR WHICH PROVISION OF SEC TION 2(15) IS NOT APPLICABLE. THEREFORE LD.CIT IS IN ER ROR IN REJECTING THE APPLICATION OF THE ASSESSEE. 2. THAT THE SOCIETY IS DEDICATED TO THE TASK OF PUB LIC WELFARE SERVICES IN CONSTRUCTION/CONVERSION OF DRY LATRINES INTO HAND FLUSH WITH TWIN LEACH PITS FOR ONSITE DIS POSAL OF HUMAN EXCRETA. THEREFORE INCOME OVER EXPENDITURE A /C ITA-1045/DEL/2012 2 TRANSFER TO CORPUS FUND CANNOT BE TERMED AT PROFIT EARN DURING THE YEAR. THEREFORE LD.CIT IS IN ERROR IN F ACTS & LAW TO REJECTING APPLICATION U/S 12AA OF I.T.ACT. 3. THAT THE ASSESSEE HAS RIGHT TO ADD, DELETE OR MO DIFY ANY GROUNDS DURING THE APPEAL PROCEEDING. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE SOCI ETY HAD FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12A OF T HE INCOME-TAX ACT ON 12.2.2010. AS PER ORDER UNDER SECTION 12AA(1)(B)(I I) DATED 4.8.2010, THE REGISTRATION OF THE TRUST WAS REJECTED. ON APP EAL, THE ITAT, VIDE ORDER DATED 8 TH DECEMBER, 2010 IN ITA NO.4420/DEL/2010, SET ASIDE THE MATTER TO THE FILE OF THE CIT WITH THE FOLLOWING FI NDING:- 4. FROM THE READING OF PARA 1 VIS-A-VIS 2, 4 & 5, IT IS NOT CLEAR AS TO WHETHER THE COMMISSIONER OF INCOME-TAX INTENDED TO CONSIDER THE ASSESSEES APPLICATION FOR REGISTRATION UNDER SEC. 12A OR APPLICATION FOR RENE WAL OF REGISTRATION UNDER SEC. 80G OF THE ACT. THE ASSESS EE HAS TAKEN A GROUND REGARDING ITS APPLICATION FOR REGIST RATION UNDER SEC. 12A OF THE ACT. IN THE LIGHT OF THIS CO NTRADICTORY AVERMENT MADE BY THE COMMISSIONER OF INCOME-TAX IN HIS ORDER, WE FIND IT FIT TO RESTORE THIS MATTER BACK T O THE FILE OF THE CIT FOR HIS FRESH ADJUDICATION AFTER ASCERTAINI NG ALL THE FACTS AND MATERIALS RELATING TO THE ASSESSEES APPL ICATION FOR REGISTRATION UNDER SEC. 12A OF THE ACT AND DECI DE THE ISSUE AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. THE ASSESSEE SHALL BE AT LIBERTY TO PRODUCE AND FURNISH ALL SUCH MATERIALS AND EVIDENCES IN SUP PORT OF ITS APPLICATION FOR REGISTRATION UNDER SEC. 12A AS IT THINGS PROPER TO SUPPORT ITS CASE. WE ORDER ACCORDINGLY. 4. THEREAFTER, THE LEARNED CIT PASSED ANOTHER ORDER UNDER SECTION 12AA DATED 16TGH DECEMBER, 2011 REFUSING THE REGIST RATION WITH THE FOLLOWING FINDING:- 4. FURTHER AS PER THE BALANCE SHEET AND RECEIPT & EXPENDITURE ACCOUNT FOR THE F.Y. 2010-11, IT HAS BE EN OBSERVED THAT THE SOCIETY HAS RECEIVED IS SUM OF RS.3,70,03,000/- FOR THE CONSTRUCTION OF SHUSHK (DR Y) ITA-1045/DEL/2012 3 SHAUCHALYA (LATRINES) IN THE VILLAGES FROM THE DUDA ON CONTRACT BASIS. ALTHOUGH THE SOCIETY HAS CLAIMED V ARIOUS EXPENDITURES AMOUNTING TO RS.3,63,64,444/- INCLUDIN G PURCHASES OF RS.2,44,92,009/-, LABOUR PAYMENT OF RS.1,07,09,600/- AND OTHER ESTABLISHMENT AND ADMINISTRATIVE EXPENSES. THEREFORE, THE ACTIVITIES OF THE SOCIETY ARE OF THE CIVIL CONSTRUCTION WORK IN NATUR E AND INCOME EARNING IS THE MAIN PURPOSE REGARDLESS THE P ROFIT EARNED DURING THE YEAR. SOCIETY HAS ALSO CLAIMED I TSELF AS A REGISTERED SOCIETY DEDICATED TO THE TASK OF PUBLI C WELFARE SERVICES AND TECHNICAL EXPERTS IN CONSTRUCTION/CONV ERSION OF DRY LATRINES INTO HAND FLUSH WITH TWIN LEACH PIT S FOR ON SITE DISPOSAL OF HUMAN EXCRETA, FOR WHICH IT HAS EN TERED INTO AGREEMENT WITH DUDA FOR CONVERSION OF UTHAO AN D BAHAU LATRINES INTO WATER POUR FLUSH LATRINES. BUT THIS IS NOT SUFFICIENT TO ESTABLISH THE WORK DO NE BY THE SOCIETY AS CHARITABLE IN NATURE BECAUSE THE EXPENSE S AS SHOWN BY THE SOCIETY IN ITS P & L A/C FOR THE MARCH ENDING 2011 ARE PURELY FOR THE PURPOSE OF COMPLETION OF WO RK CONTRACT AS AWARDED TO THE SOCIETY BY THE STATE DEVELOPMENT AGENCY AND THE FUNDING FOR THAT PURPOSE HAS BEEN MADE BY THE STATE AGENCY. THEREFORE, THE MAIN THEME BEHIND THE WORK COMPLETED BY THE SOCIETY DURI NG THE YEAR UNDER CONSIDERATION HAS BEEN TO CARRY OUT THE BUSINESS TASK AND FULFILLMENT OF CONTRACTUAL WORK. 5. I HAVE CONSIDERED THE FACTS OF THE CASE IN LIGHT OF ABOVE CONTENTIONS TAKEN BY THE SOCIETY VIS-A-VIS TH E RELEVANT PROVISIONS OF THE ACT. THE RELEVANT PART OF SECTION 2(15) OF THE INCOME-TAX ACT IN THIS REGARD IS EXTRA CTED BELOW:- CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF, AND THE ADVANCEMENT OF ANY OTHER OB JECT OF GENERAL PUBLIC UTILITY INCLUDING PRESERVATION OF ENVIRONMENT, WATERSHEDS, FOREST AND WILD LIFE AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST. PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PU RPOSE IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS. 6. IN SUCH A CASE, EVEN IF THE CONTENTION OF THE AP PLICANT THAT IT IS ENGAGED IN THE OBJECT OF GENERAL PUBLIC UTILITY IS ITA-1045/DEL/2012 4 ACCEPTED, THE SAME IS IN THE NATURE OF TRADE, COMME RCE OR BUSINESS AS ADMITTEDLY CONSIDERATION IS RECEIVED. THUS, THE SOCIETY IS NOT ENGAGED IN ANY CHARITABLE PURPOS E UNDER THE DEFINITION OF SECTION 2(15) OF THE INCOME-TAX A CT, 1961, AS DISCUSSED ABOVE. 5. AGGRIEVED WITH THE ORDER OF LEARNED CIT, THE ASS ESSEE IS IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING BEFORE US, THE LEARNED CO UNSEL FOR THE ASSESSEE ARGUED AT LENGTH. HE STATED THAT AS PER S ECTION 12AA FOR GRANT OF REGISTRATION, THERE ARE ONLY TWO REQUIREME NTS (I) THE OBJECT OF THE SOCIETY SHOULD BE CHARITABLE AND (II) THE ACTIV ITIES OF THE SOCIETY SHOULD BE GENUINE. THE SUBSEQUENT DEVELOPMENT, IF ANY, CANNOT BE CONSIDERED FOR THE PURPOSE OF SECTION 12AA. IN THI S REGARD, HE RELIED UPON THE DECISION OF HONBLE KARNATAKA HIGH COURT I N THE CASE OF SANJEEVAMMA HANUMANTHE GOWDA CHARITABLE TRUST VS. D IRECTOR OF INCOME-TAX (EXEMPTIONS) [2006] 285 ITR 327 (KARN) . HE FURTHER STATED THAT THE ACTIVITY OF THE ASSESSEE IS CERTAIN LY A CHARITABLE ACTIVITY BEING OF GENERAL PUBLIC UTILITY. IN SUPPORT OF THI S CONTENTION, HE RELIED UPON THE DECISION OF HONBLE PATNA HIGH COURT IN TH E CASE OF DCIT VS. SULABH INTERNATIONAL SOCIAL SERVICE ORGANISATION [2011] 242 CTR (PAT) 70. THE LEARNED COUNSEL FURTHER STATED THAT THE AC TIVITY OF THE ASSESSEE IS NOT WITH THE OBJECTIVE OF PROFIT EARNIN G AND NO BUSINESS ACTIVITY IS CARRIED OUT BECAUSE, FOR BUSINESS, THE PROFIT MOTIVE IS MUST WHICH IS MISSING HERE. HE, THEREFORE, STATED THAT LEARNED CIT SHOULD BE DIRECTED TO ALLOW REGISTRATION UNDER SECTION 12AA T O THE ASSESSEE SOCIETY. 7. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF LEARNED CIT AND STATED THAT FROM THE INCOME AND EXPENDITURE ACCOUNT OF THE ASSESSEE FOR THE TWO YEARS, IT IS EVIDENT THAT THE ASSESSEE ONLY EXECUTED THE CONTRACT OF CONSTRUCTION OF DRY LATRIN ES (SHUSHK ITA-1045/DEL/2012 5 SHAUCHALYA) AWARDED BY DUDA I.E., DISTRICT URBAN DE VELOPMENT AUTHORITY. THUS, THE ACTIVITY OF THE ASSESSEE IS P URELY IN THE NATURE OF A BUSINESS ACTIVITY BEING PERFORMED BY ANY CONTRACTOR . FROM THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE, IT IS EVIDENT THAT NO OTHER ACTIVITY IS CARRIED OUT BY THE ASSESSEE. THEREFORE, LEARNED CI T RIGHTLY REFUSED THE REGISTRATION TO THE ASSESSEE SOCIETY. THE SAME SHO ULD BE SUSTAINED. IN SUPPORT OF THIS CONTENTION, HE RELIED UPON THE DECI SION OF INDIAN CHAMBER OF COMMERCE VS. COMMISSIONER OF INCOME-TAX, WEST BENGAL II [1975] 101 ITR 796. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY BOTH THE SIDES BEFORE US AND PERUSED THE MATERIAL PLACED BEF ORE US. SECTION 12AA OF THE INCOME-TAX ACT, 1961, WHICH IS THE PROC EDURE FOR REGISTRATION OF A TRUST OR A SOCIETY, READS AS UNDE R:- [PROCEDURE FOR REGISTRATION. 12AA. (1) THE COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUT ION MADE UNDER CLAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1) ] OF SECTION 12A, SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINGS NECESSARY IN ORDER TO S ATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIE S, HE - (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT : 9. FROM THE ABOVE, IT IS CLEAR THAT LEARNED CIT, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUT ION, IS EMPOWERED TO CALL FOR SUCH DOCUMENTS OR INFORMATION AS HE THINKS NECE SSARY. FOR ITA-1045/DEL/2012 6 REGISTRATION OF THE TRUST OR THE INSTITUTION, HE HA S TO SATISFY HIMSELF ABOUT (I) THE OBJECT OF THE TRUST OR THE INSTITUT ION, (II) ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTI TUTION. ONCE THE CIT IS SATISFIED THAT BOTH THE ABOVE CONDITIONS ARE SATISF IED, THEN HE WILL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR THE IN STITUTION. 10. SECTION 2(15), WHICH IS THE DEFINITION OF CHAR ITABLE PURPOSE, READS AS UNDER:- [ ( 15 ) 'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF, [PRESERVATION OF ENVIRON MENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF A RTISTIC OR HISTORIC INTEREST,] AND THE ADVANCEMENT OF ANY O THER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED PROVIDED PROVIDED PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PU RPOSE, IF IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS, OR ANY ACTIVITY OF REN DERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRES PECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY:] [PROVIDED FURTHER PROVIDED FURTHER PROVIDED FURTHER PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT A PPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS [TWENTY-FIVE LAKH RUPEES] OR LESS IN THE PREVIOUS YEAR;] 11. FROM THE ABOVE, IT IS EVIDENT THAT AS PER FIRST PROVISO THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT INVOLVES CARRYING ON AN ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS FOR CONSIDERATION. AS PER THE CONSTITUTION OF THE ASSESSEES SOCIETY, IT HAS AS M ANY AS 20 OBJECTS. OBJECT NO.18 THEREOF IS CONSTRUCTION AND MAINTENANC E OF SHUSHK SHAUCHALYA (DRY LATRINES). AS PER THE ASSESSEES O WN STATEMENT, ASSESSEE HAS NOT CARRIED OUT ANY OTHER ACTIVITY WHI CH IS SPECIFIED AT ITA-1045/DEL/2012 7 ITEM NO.1 TO 17 AND 19 TO 20 OF THE OBJECT CLAUSE. ONLY ONE ACTIVITY CARRIED OUT BY THE ASSESSEE IS THE CONSTRUCTION OF DRY LATRINES. AS PER ASSESSEES CLAIM, THIS OBJECT FALLS WITHIN THE AMBI T OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THEREFORE, IT WAS NECE SSARY FOR THE CIT TO EXAMINE WHETHER THE PROVISO TO SECTION 2(15) IS APP LICABLE BECAUSE IF PROVISO IS APPLICABLE, THEN ANY OTHER OBJECT OF GE NERAL PUBLIC UTILITY CANNOT BE TREATED TO BE CHARITABLE PURPOSE. IN THI S REGARD, HE EXAMINED THE ASSESSEES INCOME AND EXPENDITURE ACCO UNT OF THE IMMEDIATELY PRECEDING TWO YEARS AND IT WAS NOTICED BY HIM THAT THE ONLY RECEIPT WAS BY WAY OF THE CONTRACT AMOUNT RECE IVED FROM DUDA AND THE EXPENDITURE INCURRED BY THE ASSESSEE WAS FO R THE EXECUTION OF SUCH CONTRACT. THEREFORE, LEARNED CIT WAS OF THE V IEW THAT THE ASSESSEES CASE FALLS WITHIN THE AMBIT OF PROVISO T O SECTION 2(15). THE LEARNED COUNSEL FOR THE ASSESSEE HAS STATED THAT WH ILE DOING SO, THE CIT HAS EXCEEDED HIS JURISDICTION AS PROVIDED UNDER SECTION 12AA OF THE INCOME-TAX ACT BECAUSE THE SUBSEQUENT DEVELOPME NT CANNOT BE CONSIDERED BY HIM WHILE CONSIDERING THE REGISTRATIO N UNDER SECTION 12AA. IN SUPPORT OF THIS CONTENTION, HE RELIED UPO N THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF SANJEEV AMMA HANUMANTHE GOWDA CHARITABLE TRUST (SUPRA). THE FAC TS IN THE ABOVE MENTIONED CASE WERE THAT THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) REJECTED THE APPLICATION FOR REGISTRATION OF THE AS SESSEE, A CHARITABLE TRUST, ON THE GROUND THAT IT WAS CARRYING ON ITS AC TIVITY BY LETTING OUT THE MARRIAGE HALL ON HIRE. THE TRIBUNAL ON APPEAL HELD THAT THE HIRING OF THE CHOULTRY WAS NOT FOR ATTAINMENT OF OTHER OBJ ECTS, BUT SEEMED TO BE THE MAIN OBJECT SO FAR PURSUED BY THE ASSESSEE A ND THEREFORE THE ASSESSEE WAS NOT ESTABLISHED WHOLLY FOR CHARITABLE PURPOSES. ON APPEAL, THEIR LORDSHIPS OF KARNATAKA HIGH COURT HEL D AS UNDER:- HELD, ALLOWING THE APPEAL, THAT THE AUTHORITIES HA D NOT KEPT IN MIND THE MANDATORY PROVISIONS. THEY HAD NO T ITA-1045/DEL/2012 8 APPLIED THEIR MIND IN THE WAY THEY WERE EXPECTED TO , BEFORE PASSING THE ORDERS. THEREFORE, BOTH THE ORD ERS COULD NOT BE SUSTAINED AND THE MATTER WAS REMANDED TO THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW. 12. FROM THE ABOVE, IT IS EVIDENT THAT THE APPLICAB ILITY OF PROVISO TO SECTION 2(15) WAS NOT THE ISSUE BEFORE THE HONBLE KARNATAKA HIGH COURT. IN THE CASE OF THE ASSESSEE, THE ONLY DISPU TE IS WITH REGARD TO APPLICABILITY OF PROVISO TO SECTION 2(15). THE LEA RNED COUNSEL FOR THE ASSESSEE HAS ARGUED THAT THE CONSTRUCTION OF DRY LA TRINES IS A CHARITABLE PURPOSE BEING AN OBJECT OF GENERAL PUBLI C UTILITY AND, IN SUPPORT OF THIS CONTENTION, HE RELIED UPON THE DECI SION OF HONBLE PATNA HIGH COURT IN THE CASE OF SULABH INTERNATIONAL SOCI AL SERVICE ORGANISATION (SUPRA). HOWEVER, FROM THE ORDER OF L EARNED CIT, IT IS EVIDENT THAT THE CIT HIMSELF HAS NOT DISPUTED THAT THE ACTIVITY OF THE ASSESSEE FALLS WITHIN THE AMBIT OF OBJECT OF GENERA L PUBLIC UTILITY BUT HE DID NOT ALLOW THE REGISTRATION TO THE SOCIETY BECAU SE THE ASSESSEE IS CARRYING ON THIS ACTIVITY IN THE NATURE OF TRADE, C OMMERCE OR BUSINESS. THUS, THE FACTS AND THE ISSUE INVOLVED IN THE CASE OF THE ASSESSEE ARE ALTOGETHER DIFFERENT THAN THE FACTS AND ISSUE INVOL VED BEFORE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SANJEEVAMMA HAN UMANTHE GOWDA CHARITABLE TRUST (SUPRA). THEREFORE, THE SAME WOUL D NOT BE APPLICABLE IN THE CASE OF THE ASSESSEE. AS PER ASSESSEES OWN STAND, WHICH IS EVIDENT FROM ITS WRITTEN SUBMISSION, THE ASSESSEE E XECUTED THE CONTRACT AWARDED BY DUDA FOR CONSTRUCTION OF SHUSHK SHAUCHALYA. THUS, CLEARLY, THE ASSESSEES CASE FALLS WITHIN THE AMBIT OF CARRYING ON AN ACTIVITY FOR CONSIDERATION. THE ASSESSEE HAS NO T CONSTRUCTED THE SHUSHK SHAUCHALYA AS A PART OF A SOCIAL SERVICE BUT IT ONLY EXECUTED THE CONTRACT AWARDED BY DUDA. IF THE CONTENTION OF THE ASSESSEE IS ACCEPTED, THEN EVERY CONTRACTOR WHO IS CONSTRUCTING THE ROADS, BRIDGES OR AIRPORTS, POWER GENERATION PLANTS ETC. CAN CLAIM THAT THEY ARE DOING THE CHARITABLE WORK. FROM THE INCOME AND EXPENDITU RE ACCOUNT OF THE ITA-1045/DEL/2012 9 ASSESSEE FOR THE IMMEDIATELY PRECEDING TWO YEARS, I T IS EVIDENT THAT THE ONLY ACTIVITY CARRIED OUT WAS FOR THE EXECUTION OF THE CONTRACT AWARDED BY DUDA. IN VIEW OF THE ABOVE, IN OUR OPIN ION, THE ASSESSEES CASE SQUARELY FALLS WITHIN THE AMBIT OF PROVISO TO SECTION 2(15) AND, SINCE THE ASSESSEE IS CARRYING ON THE ACTIVITY FOR CONSIDERATION BEING THE CONTRACT AMOUNT RECEIVED FROM DUDA, THE SAME CA NNOT BE SAID TO BE CHARITABLE PURPOSE. ONCE THE ACTIVITY OF THE AS SESSEE DOES NOT FALL WITHIN THE AMBIT OF DEFINITION OF CHARITABLE PURPO SE, THE LEARNED CIT RIGHTLY REFUSED TO REGISTER THE SOCIETY FOR THE PUR POSE OF SECTION 12A. WE, THEREFORE, UPHOLD THE ORDER OF LEARNED CIT AND DISMISS THE APPEAL FILED BY THE ASSESSEE. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 6 TH SEPTEMBER, 2013. SD/- SD/- ( (( (A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 06.09.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : BAHARA SHIKSHA VIKAS EVAM SUDHAR SAM ITI, BAHARA SHIKSHA VIKAS EVAM SUDHAR SAMITI, BAHARA SHIKSHA VIKAS EVAM SUDHAR SAMITI, BAHARA SHIKSHA VIKAS EVAM SUDHAR SAMITI, VILLAGE BADHLA KAITHWADA, MEERUT. VILLAGE BADHLA KAITHWADA, MEERUT. VILLAGE BADHLA KAITHWADA, MEERUT. VILLAGE BADHLA KAITHWADA, MEERUT. 2. RESPONDENT : COMMISSIONER OF INCOME TAX, MEERUT. COMMISSIONER OF INCOME TAX, MEERUT. COMMISSIONER OF INCOME TAX, MEERUT. COMMISSIONER OF INCOME TAX, MEERUT. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR