Printech Park Cluster, Bangalore V. Ditrector of Income tax(Exemption), Bangalore

ITA 1386/BANG/2014

• Counselvise Citation: 138621114 RSA 2014
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-09-2015
• Assessment Year: 2014-2015
• Appeal Filed On: 13-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDANA RAMACHANDRAN CITIII
• Assessee Lawyers: K KIRAN KUMAR
• Keywords: Business income; Charitable institution
• Section: 12A; 12; 11; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE C BENCH, BANGALORE BEFORE SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO.1386(BNG.)/2014 (ASSESSMENT YEAR : 2014-2015) M/S PRINTECH PARK CLUSTER, 84/1, KSPA-XIL PTTC 6 TH CROSS, 4 TH MAIN, CHAMARAJPET, BANGALORE-560 018 APPELLANT PAN NO.AABTP8959N VS DIRECTOR OF INCOME-TAX (EXEMPTN.) BANGALORE RESPONDENT ASSESSEE BY : SHRI K. KIRAN KUMAR, ADVO CATE REVENUE BY : SMT. CHANDANA RAMACHANDRAN , CIT-III DATE OF HEARING : 22-09-201 5 DATE OF PRONOUNCEMENT : 30-09-2015 O R D E R PER SMT ASHA VIJAYARAGHAVAN, JM: THIS APPEAL IS BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE DIT(E), BANGALORE DATED 17-09-2014 FOR THE ASSESSME NT YEAR 2014-15. 2. THE FACTS OF THE CASE ARE THAT M/S PRINTECH PA RK CLUSTER, BANGALORE HAD FILED AN APPLICATION IN FORM NO.10A O N 24-03-2014 SEEKING REGISTRATION U/S 12A OF THE ACT, 1961. THE ASSOCIATION OF GROUP OF PERSONS AND IT HAS BEEN REGISTERED WITH THE REG ISTRAR OF SOCIETIES. THE 2 ITA NO.1386(B)/2014 3. DIT(E) OBSERVED AS FOLLOWS; IT IS CLEAR FROM THE BYE-LAWS THAT ONE HAS TO BEC OME MEMBER AND ENROLL BY PAYING AN ADMISSION FEE OF RS.1,000/- AND ANNUAL MEMBERSHIP FEE OF RS.1,000/-. THE MEMBERSHIP OF THE ASSOCIATION SHALL BE OPEN FOR ALL TINY, SMALL SCALE, MEDIUM AND LARGE PRINTERS, TRADERS, BU SINESS SERVICE PROVIDERS ENGAGED IN PRINTING ACTIVITIES WI TH A VALID LICENSE TO THAT EFFECT BY CONCERNED AUTHORITY SITUA TED IN KARNATAKA AND OUTSIDE WITH THE APPROVAL OF THE COMM ITTEE. THERE ARE OTHER CLAUSES IN BYE-LAWS WHICH DEALS WIT H THE RIGHTS AND DUTIES OF MEMBERS AND ALSO THE RESPONSIB ILITIES OF THE ASSOCIATION LIKE UTILIZATION, MANAGEMENT OF HE ASSETS AND LIABILITIES. THE STATEMENT OF INCOME AND EXPEND ITURE HAS ALSO BEEN SEEN. 4. THE DIT(E) FURTHER HELD THAT ON THE PRIMA FACIE, THE ASSESSEE DOES NOT FIT INTO THE FRAME OF CHARITABLE PURPOSE WHICH INCLUDES RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF AND PRESERVATIO N OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY, AS DEFI NED IN SUB-SECTION 15 OF SEC.(2) OF THE IT ACT, 1961. 5. THE DIT(E) ALSO STATED THAT THE ASSESSEE BY LET TER DATED 21-07- 2014 HAS FURNISHED THE HALF BAKED INFORMATION WITHO UT ANY EVIDENCE IN 3 ITA NO.1386(B)/2014 RESPECT OF THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AS DEFINED IN SUB- SEC.(15) OF SEC.2 OF THE IT ACT, 1961. 5.1 THE DIT(E)FURTHER POINTED OUT THAT THE OBJECTS AND ACTIVITIES OF THE TRUST STATES AS FOLLOWS; THE ASSOCIATION IS MUTUAL CONCERN, AS IT IS SOCIE TY REGISTERED UNDER THE SOCIETIES ACT, WITH OBJECTS OF ACTIVITIES FOR THE MUTUAL BENEFIT OF THE MEMBERS WH O ARE ENGAGED IN PRINTING AND OTHER RELATED BUSINESS ACTIVITIES. 5.2 THE DIT(E) CONCLUDED AS FOLLOWS; FROM THE PERUSAL OF THE MEMORANDUM OF ASSOCIATION A ND THE BYE- LAWS AND ALSO CONSIDERING THE EXPLANATION OF THE AS SESSEE, THE ASSESSEE IS NOT A TRUST/INSTITUTION AND THE OBJECTS PURSUED BY THE ASSESSEE ARE NOT FOR CHARITABLE PURPOSES, HENCE REGISTRATION U/S 12A IS REJECTED. 6. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE PERUSED SOME OF THE MAIN OBJECTS WHICH A RE AS FOLLOWS; 4 ITA NO.1386(B)/2014 CLAUSE(1) PAGE: 3 1) PROMOTE AND SUPPORT THE PRINTING AND ALLIED INDU STRIES, TRADE AND COMMERCE IN AND AROUND BANGALORE INCLUDIN G HAROHALLI INDUSTRIAL AREA. CLAUSE(12) PAGE:5 CRATE, OPERATE AND MAINTAIN INFRASTRUCTURE AND OTH ER COMMON OR SPECIAL FACILITIES FOR THE WELFARE OF EMP LOYEES OF INDUSTRIES. CLAUSE(2) PAGE:5 CREATE INFRASTRUCTURE FACILITIES OR UPGRADE INFRASTRUCTURE FACILITY NEEDED FOR DEVELOPMENT OF T HE INDUSTRIES AND BUSINESS ESTABLISHMENTS IN BANGALORE INCLUDING HAROHALLI INDUSTRIAL AREA EITHER DIRECTLY OR THROUGH BANGALORE CLUSTER, KSPA OR ANY OTHER SIMILA R ASSOCIATION AND TO TAKE ALL STEPS NEEDED IN THIS RE GARD. THE ISSUES BEFORE US, TO BE ADDRESSED ARE THE FOLL OWING ; 1) WHETHER IN CASE OF THE TRUST/SOCIETY CREATED FOR THE ADVANCE OF GENERAL PUBLIC UTILITY IT IS NECESSARY THAT OBJECTS SHOULD BE BENEFIT TO THE PUBLIC AT LARGE OR IT WOUL D BE THAT OBJECT BENEFICIAL TO A SECTION OF PUBIC WOULD BE AN OBJECT OF GENERAL PUBLIC UTILITY, AS DEFINED U/S 2(15) OF THE IT ACT, 1961. 2) GENUINENESS OF THE ACTIVITIES OF THE TRUST HAS BEEN COMMENTED UPON BY THE DIT(E) AT PARA-6 OF HIS ORDER . THE 5 ITA NO.1386(B)/2014 ISSUE WHETHER AT THE TIME OF GRANTING REGISTRATION U/S 12A, THE DIT(E) CAN GO INTO THE GENUINENESS OF THE ACTIV ITIES OF THE TRUST. 3) WHETHER THE SOCIETY IS NOT DRIVEN PRIMARILY BY DESIRE OR MOTIVE TO EARN PROFITS, BUT TO DO SERVICE FOR TH E ADVANCEMENT OF GENERAL PUBLIC UTILITY SHOULD BE REG ARDED AS INSTITUTION ESTABLISHED FOR CHARITABLE PURPOSES. 6.1 WE SHALL GIVE OUR OPINION FOR ALL THE THREE ISS UES STATED ABOVE. 7. ON THE FIRST ISSUE OF (SUPRA) THE APEX COURT IN AHMEDABAD RANA CASTE ASSOCIATION VS CIT (1971) 82 ITR 704 AND CIT VS AHMEDABAD RANA CASTE ASSOCIATION (1985) 140 ITR 1(SC) POINTED OUT THAT THE LAW RECOGNIZES NO PURPOSE AS CHARITABLE UNLESS IT IS F OR A PUBLIC CHARITY. THAT IS TO SAY, A PURPOSE MUST, IN ORDER TO BE CHAR ITABLE, BE DIRECTED TO THE BENEFIT OF THE COMMUNITY OR A SECTION OF THE CO MMUNITY. THE EXPRESSION OBJECT OF GENERAL PUBLIC UTILITY, HOWE VER, IS NOT RESTRICTED TO THE OBJECTS BENEFICIAL TO THE WHOLE OF MANKIND. A N OBJECT BENEFICIAL TO A SECTION OF THE PUBLIC IS AN OBJECT OF GENERAL PUBLI C UTILITY. THE SECTION OF THE COMMUNITY SOUGHT TO BE BENEFITTED MUST UNDOUBTE DLY BE SUFFICIENTLY DEFINED AND IDENTIFIABLE BY SOME COMMON QUALITY OF A PUBLIC OR IMPERSONAL NATURE. 6 ITA NO.1386(B)/2014 7.1 THE RATIO OF THE APEX COURT DECISION WAS FOLLOW ED IN THE CASE OF HIRALAL BHAGWATI VS CIT 246 ITR 188. THE SOCIETY I N THIS PRESENT CASE IS FOR THE BENEFIT OF THE MEMBERS WHO ARE ENGAGED IN P RINTING AND OTHER RELATED ACTIVITIES AND HAS AN OBJECT BENEFICIAL TO THE SECTION OF PUBLIC WHO ARE ASSOCIATED WITH PRINTING AND WOULD BE AN OBJECT OF GENERAL PUBLIC UTILITY SPECIFIED U/S 2(15) OF THE IT ACT, 1961. 8. WITH RESPECT TO THE SECOND ISSUE THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF DIT(E) VS MEENAKSHI AMMA ENDOWMENT TRUST (2013) 40 TAXMANN.COM 30(KAR.) IS TO BE FOLLOWED WH EREIN IT HAS BEEN HELD THAT WHERE A TRUST HAD APPROACHED AUTHORITY FO R REGISTRATION U/S 12A WITH A SPAN OF EIGHT MONTHS OF ITS FORMATION. ONLY OBJECTS OF TRUST FOR WHICH IT WAS FORMED WOULD HAVE TO BE EXAMINED FOR O NE TO BE SATISFIED ABOUT ITS GENUINENESS AND NOT ITS ACTIVITIES. IN T HE PRESENT CASE, THOUGH THE SOCIETY HAS BEEN INCORPORATED ON 26-06-2009, IT HAS APPLIED FOR 12A REGISTRATION ONLY ON 24.03.2014. HOWEVER, THE SOCIE TY HAS BEEN CONDUCTING ITS ACTIVITIES IN ACCORDANCE WITH ITS OB JECTS NAMELY THE MEMBERS WHO ARE ENGAGED IN PRINTING AND OTHER RELAT ED BUSINESS ACTIVITIES. THE GENUINENESS OF THE ACTIVITIES WOU LD NOT BE THE CRITERION TO 7 ITA NO.1386(B)/2014 GRANT REGISTRATION U/S 12A AS THE OBJECTS ARE FOR G ENERAL PUBLIC UTILITY AS DEFINED U/S 2(15) OF THE IT ACT, 1961. 9. WITH RESPECT TO THE THIRD ISSUE, WE REPRODUCE CI RCULAR NO.11 OF 2008, DATED 19 TH DECEMBER, 2008. FURTHERMORE, IN THE MEMORANDUM REGARDING DELEGAT ED LEGISLATION RATIONALIZATION AND SIMPLIFICATION ME ASURES, IT HAS BEEN NOTED AS UNDER;- STREAMLINING THE DEFINITION OF CHARITABLE PURPOSE SECTION 2(15) OF THE ACT, DEFINES CHARITABLE PURPO SE TO INCLUDE RELIEF OF THE POOR, EDUCATION, MEDICAL RELI EF AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY. IT HAS BEEN NOTICED THAT A NUMBER OF ENTITIES OPERA TING ON COMMERCIAL LINES ARE CLAIMING EXEMPTION ON THEIR IN COME EITHER UNDER SECTION 10(23C) OR SECTION 11 OF THE A CT ON THE GROUND THAT THEY ARE CHARITABLE INSTITUTIONS. THIS IS BASED ON THE ARGUMENT THAT THEY ARE ENGAGED IN THE ADVANC EMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY AS IT IS IN CLUDED IN THE FOURTH LIMB OF THE CURRENT DEFINITION OF CHARITABL E PURPOSE. SUCH A CLAIM, WHEN MADE IN RESPECT OF AN ACTIVITY C ARRIED OUT ON COMMERCIAL LINES, IS CONTRARY TO THE INTENTI ON OF THE PROVISION. WITH A VIEW TO LIMITING THE SCOPE OF THE PHRASE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. IT IS PROPOSED TO AMEND SECTION 2(15) SO AS TO PROV IDE THAT 8 ITA NO.1386(B)/2014 THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUB LIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE IF IT IN VOLVES THE CARRYING ON OF- (A) ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE O R BUSINESS, OR (B) ANY ACTIVITY OF RENDERING OF ANY SERVICE IN REL ATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A FEE OR CESS OR ANY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION OF THE INCOME FROM SUCH ACTIVITY, OR TH E RETENTION OF SUCH INCOME, BY THE CONCERNED ENTITY. THIS AMENDMENT WILL TAKE EFFECT FROM THE 1SY DAY OF APRIL, 2009 AND WILL ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2009-10 AND SUBSEQUENT ASSESSMENT YEARS. 10. HENCE, THE PROVISO WILL HIT ONLY SUCH CASE THE ORGANIZATION IS CARRYING ON BUSINESS ACTIVITY WITH A PROFIT MOTIVE IN THE GARB OF CHARITABLE PURPOSE. IT HAS BEEN CLEARLY ESTABLISHED BY VARIOU S DECISIONS THAT WHEN THE MAIN OBJECT OF THE INSTITUTION WAS CHARITABLE IN NATURE, THEN THE ACTIVITIES CARRIED OUT TOWARDS THE ACHIEVEMENT OF T HE SAID, BEING INCIDENTAL OR ANCILLARY TO THE MAIN OBJECT, EVEN IF RESULTING IN PROFIT AND EVEN IF IT IS CARRIED OUT WITH NON-MEMBERS, WERE AL L HELD TO BE CHARITABLE IN NATURE. THE BASIC PRINCIPLE UNDERLINED THE DEF INITION OF CHARITABLE 9 ITA NO.1386(B)/2014 PURPOSES REMAINS UNALTERED EVEN BY AMENDMENT TO SEC TION 2(15) OF THE ACT W.E.F. 1.4.2009, THOUGH THE RESTRICTIVE FIRST P ROVISO WAS INSERTED THEREIN. IN THE GIVEN FACTS OF THE CASE, THE ASSES SEES ASSOCIATIONS PRIMARY PURPOSE WAS TO GIVE FOCUS O AREAS OF EDUCAT ION, ENVIRONMENT AND ENGAGEMENT (COMMUNITY AND EMPLOYEE). IT HAS THROUG H CONSTANT AND WELL MONITORED SUPPORT AIMED TOWARDS COMMUNITY SUSTAINAB ILITY. THEREFORE, THEY HAVE FOCUSED ON AREAS OF EDUCATION AND ENVIRON MENT, WATERSHED MANAGEMENT, WOMEN EMPOWERMENT THROUGH SKILL DEVELOP MENT INITIATIVES, PROVISION OF DRINKING WATER, YOUTH EMPOWERMENT, MED ICAL HEALTH AMPS, ENVIRONMENTAL CONSERVATION PROGRAM AND PROMOTION OF SPORTS AND A HOST OF EXTRACURRICULAR ACTIVITIES AT LOCAL LEVELS AIMED TOWARDS COMMUNITY SUSTAINABILITY. HENCE, THE ASSESSEE ASSOCIATION PR IMARY PURPOSE WAS ADVANCEMENT OF OBJECTIVE GENERAL PUBLIC UTILITY AND IT WOULD REMAIN CHARITABLE EVEN IF AN INCIDENTAL OR ANCILLARY ACTIV ITY OR PURPOSE OF ACHIEVING THE MAIN PURPOSE WAS PROFITABLE IN NATURE . HENCE THE FINDING OF THE DIRECTOR OF INCOME-TAX (EXEMPTION) HAS MENTIONE D IN THE OBJECT CLAUSE-17 UNDER THE SAID INCIDENTAL OBJECTS UNDER P ART-B OF THE MOA AT PARA-5 OF HIS ORDER STATING IT TO BE NON-CHARITABLE DOES NOT DISENTITLE THE ASSESSEE FOR AVAILING EXEMPTION U/S 12 OF THE IT AC T. THE RELEVANT PORTION OF THE DECISION OF KOLKATA BENCH OF THE ITAT IN THE CASE OF INDIAN 10 ITA NO.1386(B)/2014 CHAMBERS OF COMMERCE (2014) 52 TAXMANN.COM 52 (KOLK ATA-TRIB) IS REPRODUCED HERE UNDER; THE CONCEPT BEHIND SECTION 28(III) IS TO CUT AT THE MUTUALITY PRINCIPLE BEING RELIED ON IN SUPPORT OF A CLAIM FOR EXEMPTION, WHEN THE ASSESSEE WAS ACTUALLY DERIVING INCOME OR M AKING PROFIT AS A RESULT OF RENDERING SPECIFIC SERVICES F OR ITS MEMBERS IN A COMMERCIAL WAY. THE REASON FOR THE INTRODUCTION OF SECTION 28(III) IS TO IGNORE THE PRINCIPLE OF MUTUALITY AND REACH THE SUR PLUS ARISING TO THE MUTUAL ASSOCIATION AND THIS IS CLEAR FROM THE ITA NO.739 OF 2014 IP INDIA FOUNDATION, HYDERABAD F ACT THAT THESE PROVISIONS ARE CONFIRMED TO SERVICES PER FORMED BY THE ASSOCIATION FOR ITS MEMBERS. SUCH INCOME WO ULD EITHER BE CHARGED AS BUSINESS INCOME OR UNDER THE R ESIDUAL HEAD, DEPENDING UPON THE QUESTION WHETHER THE ACTIV ITIES OF THE ASSOCIATION WITH THE NON-MEMBERS AMOUNT TO A BU SINESS OR OTHERWISE, SECTION 28(III) CONSTITUTES CERTAIN I NCOME OF THE ASSOCIATION TO BE BUSINESS INCOME WITHOUT AFFECTING THE SCOPE OF THE EXEMPTION UNDER SECTION 11. SECTION 2(15) WHICH INCORPORATES THE DEFINITION OF CHARITABLE PURPOSE SIMPLY SHOWS THAT SEVERAL MUTUA L ASSOCIATIONS MAY ALSO FALL WITHIN THE DEFINITION. THE RECEIPTS DERIVED BY A CHAMBER OF COMMERCE AND INDUS TRY FOR PERFORMING SPECIFIC SERVICES TO ITS MEMBERS, THOUGH TREATED AS BUSINESS INCOME UNDER SECTION 28(III) WOULD STIL L BE ENTITLED TO THE EXEMPTION UNDER SECTION 11 READ WIT H SECTION 11 ITA NO.1386(B)/2014 2(15) PROVIDED THERE IS NO PROFIT MOTIVE. THUS, AS SESSEE BEING A CHARITABLE INSTITUTION CARRYING ON THE OBJE CT OF PROMOTION AND DEVELOPMENT OF TRADE AND COMMERCE AND WHICH WAS NOT INVOLVED IN THE CARRYING ON OF ANY AC TIVITY IN THE NATURE OF BUSINESS, THE SAID SECTION 28(III) DOES NOT APPLY. APEX COURT IN THE EARLIEST CIT VS ANDHRA CHAMBER O F COMMERCE (1965) 55 ITR 722 HAD CLEARLY LAID OUT THE PRINCIPLE THAT IF THE PRIMARY PURPOSE OF AN INSTITU TION WAS ADVANCEMENT OF OBJECTS OF GENERAL PUBLIC UTILITY, I T WOULD REMAIN CHARITABLE EVEN IF AN INCIDENTAL OR ANCILLAR Y ACTIVITY OR PURPOSE, FOR ACHIEVING THE MAIN PURPOSE, WAS PRO FITABLE IN NATURE. 4. RESPECTFULLY FOLLOWING THE CO-ORDINATE BENCH DECISION, WE ALLOW THE ASSESSEES APPEAL. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. 11. WE HAVE HEARD BOTH PARTIES AND HAVE PERUSED TH E MATERIAL ON RECORD. 12. AGAIN, THE HONBLE DELHI HIGH COURT IN THE CAS E OF INDIA TRADE PROMOTION ORGANIZATION VS DIRECTOR GENERAL OF INCOM E-TAX (EXPTNS.) & OTHERS (2015) 371 ITR 333, HELD VIDE PARA-58 AS FOL LOWS; 12 ITA NO.1386(B)/2014 58. IN CONCLUSION, WE MAY SAY THAT THE EXPRESSIO N CHARITABLE PURPOSE AS DEFINED IN SECTION 2(15) CA NNOT BE CONSTRUED LITERALLY AND IN ABSOLUTE TERMS. IT HAS TO TAKE COLOUR AND BE CONSIDERED IN THE CONTEXT OF SECTION 10(23C)(IV) OF THE SAID ACT. IT IS ALSO CLEAR THAT IF THE LITE RAL INTERPRETATION IS GIVEN TO THE PROVISO TO SECTION 2(15) OF THE SAI D ACT, THEN THE PROVISO WOULD BE AT RISK OF RUNNING FOWL OF THE PRINCIPLE OF EQUALITY ENSHRINED IN ARTICLE 14 OF THE CONSTITU TION OF INDIA. IN ORDER TO SAVE THE CONSTITUTIONAL VALIDIT Y OF THE PROVISO, THE SAME WOULD HAVE TO BE READ DOWN AND INTERPRETED IN THE CONTEXT OF SECTION 10(23C) (IV) BECAUSE, IN OUR VIEW, THE CONTEXT REQUIRES SUCH AN INTERPRETATI ON. THE CORRECT INTERPRETATION OF THE PROVISO TO SECTION 2( 15) OF THE SAID ACT WOULD BE THAT IT CARVES OUT AN EXCEPTION F ROM THE CHARITABLE PURPOSE OF ADVANCEMENT OF ANY OTHER OBJE CT OF GENERAL PUBLIC UTILITY AND THAT EXCEPTION IS LIMITE D TO ACTIVITIES IN THE NATURE OF TRADE, COMMERCE OR BUSI NESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO AN Y TRADE, COMMERCE OR BUSINESS, THE DOMINANT AND THE PRIME OB JECTIVE HAS TO BE SEEN. IF THE DOMINANT AND PRIME OBJECTIV E OF THE INSTITUTION, WHICH CLAIMS TO HAVE BEEN ESTABLISHED FOR CHARITABLE PURPOSES, IS PROFIT MAKING, WHETHER ITS ACTIVITIES ARE DIRECTLY IN THE NATURE OF TRADE, COMMERCE OR BU SINESS OR IN DIRECTLY IN THE RENDERING OF ANY SERVICE IN RELA TION TO ANY TRADE, COMMERCE OR BUSINESS, THEN IT WOULD NOT BE E NTITLED TO CLAIM ITS OBJECT TO BE A CHARITABLE PURPOSE. ON THE FLIP SIDE, WHERE AN INSTITUTION IS NOT DRIVEN PRIMARILY BY A D ESIRE OR 13 ITA NO.1386(B)/2014 MOTIVE TO EARN PROFITS, BUT TO DO CHARITY THROUGH T HE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY. IT CANNOT BUT BE REGARDED AS AN INSTITUTION ESTABLISHED FOR C HARITABLE PURPOSES. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30- 09-2015 SD/- (JASON P BOAZ) SD/- (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: BANGALORE: D A T E D : 30-09-2015 AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE