Process-Cum-Product Development Centre, Meerut V. CIT, Meerut

ITA 410/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58982 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 15-12-2016
• Assessment Year: misc
• Appeal Filed On: 25-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S SS RANA
• Assessee Lawyers: K SAMPATH ADV SH V RAJAKUMAR
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA; 12; 11

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 410/DEL/2012 PROCESS - CUM - PRODUCT DEVELOPMENT CENTRE, SPORTS GOODS COMPLEX, DELHI ROAD, MEERUT PAN:AAAJP1090M VS. CIT, MEERUT (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. K SAMPATH, ADV SH. V RAJAKUMAR, ADV REVENUE BY: S. SS RANA, CIT DR DATE OF HEARING 15/12/ 201 6 DATE OF PRONOUNCEMENT 13 / 02 / 2017 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT, MEERUT DATED 29/11/2011 AGAINST ORDER UNDER SECTION 12 AA OF THE INCOME TAX ACT REJECTING APPLICATION OF THE ASSESSEE FOR REGISTRATION. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LD COMMISSIONER OF INCOME - TAX HAS REJECTED THE APPLICATION U/S 12 - A IGNORING THE DIRECTION HON'BLE I.T.A.T., HENCE REJECTION OF APPLICATION U/S 12 - A IS ARBITRARY, UNJUST AND ILLEGAL. 2. THAT LD. COMMISSIONER OF INCOME - TAX HAS NOT C ONSIDERED THE FACTS OF OBJECT OF THE SOCIETY IS CHARITABLE AND WITHIN GENERAL PUBLIC UTILITY, THEREFORE UNDER CHARITABLE PURPOSE. AS PER HON'BLE ALL. HIGH COURT JUDGMENT IN THE CASE OF CITY MONTESSORI SCHOOL (REFD.) VS. UNION OF INDIA (2009) 315 - ITR - 48(A11 ). THEREFORE, REJECTION OF APPLICATION U/S 12 - A IS AGAINST THE DECISION OF ALLAHABAD HIGH COURT, WHICH IS BINDING UP ON COMMISSIONER OF INCOME - TAX, MEERUT. 3. THAT THE LD. COMMISSIONER OF INCOME - TAX IS NOT JUSTIFIED THAT IN TREATING THE RECEIPT IN THE NATU RE OF TRADE, COMMERCE OR BUSINESS BECAUSE THE ASSESSEE HAS UTILIZED HIS ALL THE ACTIVITIES FOR THE CHARITABLE PURPOSE NOT IN THE NATURE OF TRADE OF COMMERCE OR BUSINESS. EVEN LD. COMMISSIONER OF INCOME - TAX HAS NOT POINT OUT ANY ACTIVITIES, WHICH HAS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. 3. BRIEF FACTS OF THE CASE IS THAT COORDINATE BENCH AGAINST THE ORDER OF LD. CIT, MEERUT HAS PASSED AN ORDER IN ITA NO. 5013/DEL/ 2010 WHEREIN THE APPLICATION OF THE ASSESSEE FOR GRANT OF REGISTRATION UNDER SECTION 12 AA OF PAGE 2 OF 10 THE INCOME TAX ACT WHICH WAS REJECTED , RESTORED THE MATTER BACK TO THE FILE OF THE LD. CIT FOR FRESH ADJUDICATION A FTER PROVIDING REASONABLE OPPORTUNITY OF BEING LEADING TO THE ASSESSEE . PURSUANT TO THE ORDER OF THE COORDINATE BENCH, LD. CIT PASSED A N ORDER ON 29.11 . 2011 REJECTING THE APPLICATION OF THE APPELLANT. THE MAIN REASON S FOR REJECTION WERE THAT ACCORDING TO HIM FOR FINANCIAL YEAR 2009 10, THE TRUST HAS RECEIVED FEES OF RS. 10882929/ FOR PROVIDING TRAINING TO SC/ST , FOR PROVIDING VARIOUS TECHNICAL TRAINING AND FOR OTHER VARIOUS TRAINING SOURCES IN THE FIELD OF MANUFACTURING AND DEVELOPMENT OF SPORTS GOODS, LEATHER AND CONSULTANCY TO THE COMPANIES AS OTHER MISCELLANEOUS RECEIPTS. AGAINST THIS , THE ASSESSEE HAS CLAIMED VARIOUS EXPENDITURE INCLUDING ESTABLISHMENT AND OTHER ADMINISTRATIVE EXPENSES. HENCE, THE LD. CIT REACHED AT THE CONCLUSION THAT THE ACTIVITIES OF THE SOCIETY ARE OF THE INCOME EARNING IN NATURE. HE FURTHER HELD THAT IN THE COPY OF THE MEMORANDUM OF ASSOCIATION AND RULES WHET HER ANY PROPERTY REMAINING AFTER BEARING OUT THE LIABILITY ON THE DISSOLUTION OF THE ASSOCIATION SHALL BE TRANSFERRED TO OTHER TRUST OR ASSOCIATION HAVING SIMILAR OBJECTS. HE FURTHER HELD THAT THE SOCIETY CANNOT ALSO BE CONSIDERED AS AN EDUCATIONAL INSTITU TION PROVIDING REGULAR OR SYSTEMATIC EDUCATION AS DEFINED IN THE STATUTORY PROVISIONS TO CONSIDER THE GRANT OF REGISTRATION. THEREFORE, HE HELD THAT EVEN IF THE CONTENTION OF THE ASSESSEE THAT IT IS ENGAGED IN THE OBJECT OF GENERAL PUBLIC UTILITY IS ACCEPT ABLE THE SAME IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS AS ADMITTEDLY CONSIDERATION IS RECEIVED. AGAINST THIS ORDER OF THE LD. CIT , ASSESSEE IS IN APPEAL BEFORE US. 4. LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT APPELLANT IS A SOCIETY REGISTERED UNDER SECTION 21 OF THE SOCIETIES REGISTRATION ACT 1860 BY THE MINISTRY OF INDUSTRY WITH THE MAIN OBJECTS TO DEVELOP NEW TECHNOLOGIES AND UPGRADE THE EXISTING LEVEL OF TECHNOLOGY OF SPORTS GO ODS AND LEISURE TIME EQUIPMENTS. HE FURTHER REFERRED TO THE MAIN OBJECTS OF THE ASSESSEE AT SERIAL NO. III OF THE MEMORANDUM OF ASSOCIATION. HE FURTHER REFERRED TO THE BOARD OF DIRECTORS OR THE TRUSTEES OF THE SOCIETY WHO ARE GOVERNMENT OFFICERS . HE STATED THAT ASSESSEE IS SET UP BY THE MINISTRY OF MICRO AND SMALL, MEDIUM ENTERPRISES OF THE GOVERNMENT OF INDIA WHO HAS GIVEN GRANT TO IT. HE FURTHER SUBMITTED THAT IT IS ENGAGED IN TRAINING WITH RESPECT TO THE SC AND ST CANDIDATES AND FOR WHICH GOVERNMENT OF I NDIA HAS GIVEN A GRANT . H E FURTHER SUBMITTED THAT DETAIL OF SUCH REIMBURSEMENT OF TRAINING FEES GIVEN BY PAGE 3 OF 10 GOVERNMENT. HE FURTHER SUBMITTED THAT ASSESSEE IS NOT ENGAGED ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. HE FURTHER SUBMITTED A DETAILE D CHAR T AT PAGE NO. 13 OF HIS PAPER BOOK TO SHOW THAT HOW THE EXPENDITURE ARE MET OUT OF THE RECEIPT OF FUNDS. HE FURTHER SUBMITTED AT PAGE NO. 1 OF HIS PAPER BOOK THAT AUTONOMOUS BODIES ARE SET UP WHENEVER IT IS FELT THAT CERTAIN FUNCTIONS NEED TO BE DISC HARGED OUTSIDE THE GOVERNMENTAL SETUP WITH SOME AMOUNT OF INDEPENDENCE AND FLEXIBILITY WITHOUT DAY - TO - DAY INTERFERENCE OF THE GOVERNMENTAL MACHINERY AND THEREFORE SUCH AUTONOMOUS BODIES UNDER THE DEVELOPMENT COMMISSIONER IS A SETUP THEY ARE NEITHER ENGAGED IN THE BUSINESS OR TRADE OR COMMERCE. IN THE RESULT, HE SUBMITTED THAT ASSESSEE IS CARRYING ON EDUCATIONAL ACTIVITIES AND THEREFORE ENTITLED TO REGISTRATION UNDER SECTION 12 AA OF THE INCOME TAX ACT. 5. LD. DR RELIED UPON THE ORDER OF THE LD. CIT AND STATED THAT THE ASSESSEE IS CARRYING ON THE BUSINESS AND THEREFORE REGISTRATION UNDER SECTION 12 AA OF THE INCOME TAX ACT IS RIGHTLY REJECTED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THE APPELLANT IS AN AUTONOMOUS SOCIETY UNDER THE ADMINISTRATIVE CONT ROL OF THE OFFICE OF THE DEVELOPMENT COMMISSIONER, MINISTRY OF MICRO SMALL AND MEDIUM ENTERPRISES, GOVERNMENT OF INDIA. THE ANNUAL ACCOUNTS AND THE ANNUAL REPORT OF THE CENTRE ARE APPROVED BY THE GOVERNING COUNCIL ADOPTED BY THE SOCIETY IN ITS ANNUAL GENER AL MEETING. THE AUTONOMOUS BODIES ARE SET UP WHENEVER IT IS FELT THAT THE CERTAIN FUNCTIONS NEED TO BE DISCHARGED OUTSIDE THE GOVERNMENTAL SETUP WITH SOME AMOUNT OF INDEPENDENCE AND FLEXIBILITY WITHOUT DAY - TO - DAY INTERFERENCE OF THE GOVERNMENTAL MACHINERY. THESE ARE SET UP BY THE MINISTRIES/DEPARTMENTS CONCERNED WITH THE SUBJECT MATTER AND ARE FUNDED THROUGH GRANTS IN AID, FULLY OR PARTIALLY; DEPENDING ON THE EXTENT WITH SUCH INSTITUTES GENERATE INTERNAL RESOURCES OF THEIR OWN. THESE GRANTS ARE REGULATED BY THE MINISTRY OF FINANCE TRUE THERE ARE INSTRUCTIONS AS WELL AS THE INSTRUCTIONS RELATING TO POWER POSTS, ETC. THESE AUTONOMOUS BODIES ARE GENERALLY REGISTERED AS SOCIETIES UNDER THE SOCIETIES REGISTRATION ACT AND IN CERTAIN CASES, THEY HAVE BEEN SETUP AS STATUTORY INSTITUTIONS UNDER THE PROVISIONS CONTAINED UNDER VARIOUS ACTS. UNDER THE VARIOUS MINISTRIES TECHNOLOGY AND DEVELOPMENT CENTERS ARE OPENED WHICH ARE PRODUCT SPECIFIC FOR LOOKING INTO MSME IS SPECIFIC PROBLEMS AND RENDERING TECHNICAL SERVICES, DEV ELOPING AND UPGRADING TECHNOLOGIES AND MANPOWER PAGE 4 OF 10 DEVELOPMENT IN SPECIFIC PRODUCT GROUPS. APPELLANT IS ONE SUCH INSTITUTE. IT CARRIES ON ITS ACTIVITIES FOR THE PURPOSE OF THE BENEFIT OF THE SC AND ST CANDIDATES . THE ASSESSEE SUBMITTED THE VARIOUS OTHER SUCH INSTITUTES WHICH HAVE BEEN GRANTED REGISTRATION UNDER SECTION 12 AA OF THE INCOME TAX ACT BY VARIOUS COMMISSIONERS ACROSS THE COUNTRY. ASSESSEE HAS ALSO PLACED RELIANCE UPON THE DECISION OF THE COORDINATE BENCH IN ITA NO. 1563/HYD/2014 IN CASE OF CENTRAL INSTITUTE OF TO DESIGN HYDERABAD VERSUS DIRECTOR OF INCOME TAX INTO BRACKET EXEMPTIONS BRACKET OVER, HYDERABAD DATED 08/07/2015 WHEREIN ON THE SIMILAR CIRCUMSTANCES AND FACTS. THE COORDINATE BENCH HAS CONSIDERING ALL THE ARGUMENTS WHICH ARE BEFORE US HAS H ELD THAT WHERE SUCH SIMILAR INSTITUTIONS ARE GRANTED REGISTRATION UNDER SECTION 12 AA OF THE INCOME TAX ACT. THE APPLICATION OF THE ASSESSEE MAY BE CONSIDERED GRANTING REGISTRATION UNDER SECTION 12 A OF THE INCOME TAX ACT TO THE ASSESSEE. THE COORDINATE BE NCH HAS HELD AS UNDER: - 5. BRIEFLY, THE FACTS ARE, ASSESSEE WAS ESTABLISHED BY THE GOVT. OF INDIA, UNDER THE MINISTRY OF SMALL, MICRO AND MEDIUM INDUSTRIES WITH THE TECHNICAL HELP OF THE INTERNATIONAL LABOUR ORGANISATION (ILO). ASSESSEE, AS STATED BY IT, IS ONE OF THE 18 SUCH TOOL ROOMS ESTABLISHED BY THE GOVT. OF INDIA ACROSS DIFFERENT STATES. SUBSEQUENTLY, THE GOVT. OF INDIA HAD DECIDED TO REGISTER THE TOOL ROOMS AS SOCIETIES AND AS PER THE SAID DECISION ASSESSEE WAS REGISTERED AS A PUBLIC SOCIETY UNDER THE ANDHRA PRADESH (TELANGANA AREA) PUBLIC SOCIETIES REGISTRATION ACT, 1350 FASLI. THE MAIN OBJECT OF ASSESSEE SOCIETY IS TO PROVIDE TRAINING FACILITIES TO TECHNICAL PERSONNEL IN DESIGNING AND MAKING TOOLS, DYES AND MOULDS. ASSESSEE INSTITUTION ON 02/11/2 007 MADE AN APPLICATION IN THE PRESCRIBED MANNER BEFORE LD. DIT(E) SEEKING REGISTRATION U/S 12A OF THE ACT. AS APPEARS FROM RECORD, SINCE, ASSESSEE FAILED TO COMPLY TO A NOTICE ISSUED SEEKING CERTAIN INFORMATION, APPLICATION FOR REGISTRATION WAS REJECTED V IDE ORDER DATED 23/04/2008. BEING AGGRIEVED OF THE SAID ORDER OF REJECTION, ASSESSEE PREFERRED APPEAL BEFORE THE ITAT. ITAT VIDE ORDER DATED 09/04/2009 IN ITA NO. 05/HYD/09 SET ASIDE THE ORDER OF LD. DIT(E) AND REMITTED THE MATTER BACK TO HIS FILE WITH A D IRECTION TO DECIDE THE ISSUE AFRESH AFTER DUE OPPORTUNITY OF BEING HEARD TO ASSESSEE. IN PURSUANCE TO THE DIRECTION OF ITAT, PROCEEDING WERE AGAIN TAKEN UP BY LD. DIT(E) AND HE CALLED UPON ASSESSEE TO FURNISH INFORMATION AND DETAILS IN SUPPORT OF ITS CLAIM THAT IT IS CHARITABLE INSTITUTION. 6. LD. DIT(E) AFTER EXAMINING THE INFORMATION SUBMITTED BY ASSESSEE NOTICED THAT, THOUGH, ASSESSEE CLAIMED THAT IT IS CONDUCTING DIFFERENT COURSES AND TRAINING PROGRAMMES FOR VARIOUS PARTICIPANTS, BUT, ACTUALLY IT WAS SE EN THAT ASSESSEE IN ADDITION TO RECEIPTS FROM SERVICES/TRAINING, HAS ALSO GOT RECEIPTS FROM SALE OF FINISHED PRODUCTS IN DIFFERENT ASSESSMENT YEARS. LD. DIT(E) OBSERVED THAT ON VERIFICATION OF THE ANNUAL ACCOUNTS, IT WAS FOUND THAT ASSESSEE HAS SHOWN VARIO US AMOUNTS TOWARDS STOCK - IN - TRADE, FINISHED GOODS, WORK - IN - PROGRESS AND RAW MATERIALS. HE ALSO NOTED THAT SALES TAX ASSESSMENTS HAVE BEEN COMPLETED IN CASE OF ASSESSEE UP TO AY 2003 - 04 AND ASSESSMENTS FOR AY 2004 - 05 & 2005 - 06 ARE PENDING. HE ALSO OBSERVED THAT APART FROM RECEIPTS FROM SALES ASSESSEE HAS ALSO INCOME FROM ROYALTY AS FOUND FROM INCOME AND EXPENDITURE ACCOUNT IN DIFFERENT ASSESSMENT YEARS. LD. DIT(E) OBSERVED THAT, THOUGH AS PER THE OBJECTS OF ASSESSEE, IT IS NOT SUPPOSED TO INDULGE IN COMMERCI AL ACTIVITIES, BUT, ASSESSEE IN FACT HAS UNDERTAKEN COMMERCIAL ACTIVITIES GENERATING RECEIPTS THEREFROM. HE, THEREFORE, HELD THAT ACTIVITY OF ASSESSEE CANNOT BE CONSIDERED TO BE CHARITABLE AS IT IS ENGAGED IN COMMERCIAL ACTIVITY. LD. DIT(E) REFERRING TO A DECISION OF HON'BLE SUPREME COURT IN CASE OF EAST INDIA INDUSTRIES (MADRAS) (P.) LTD. V. CIT [1967] 65 ITR 611 , OBSERVED THAT A TRUST OR SOCIETY HAVING BOTH CHARITABLE AND NON - CHARITABLE OBJECTS IS NOT ELIGIBLE FOR EXEMPTION OF ITS PAGE 5 OF 10 INCOME, IS, NOT ENTITLED FOR REGISTRATION U/S 12A OF THE ACT. ACCORDINGLY, HE REJECTED ASSESSEE'S APPLICATION FOR REGISTRATION. BEING AGGRIEVED OF THE SAID ORDER, ASSESSEE IS BEFORE US. 7. LD. AR REFERRING TO THE OBJECT OF THE SOCIETY SUBMITTED BEFORE US THE MAIN OBJECT OF THE SOCIETY IS TO IMPART TRAINING IN DESIGNING AND MAKING TOOLS, DYES AND MOULDS, IN THE FORM OF VOCATION EDUCATION. IT WAS SUBMITTED, SOCIETY ALSO IMPARTS VOCATIONAL TRAINING IN BOTH MECHANICAL, ENGINEERING AND COMPUTER AIDED DESIGN, VLSI, EMBEDDED SYSTEMS, MECHATRONICS FOR POST GRADUATE STUDENTS IN COLLABORATION WITH JNTU, HYDERABAD AND OSMANIA UNIVERSITY. IT WAS SUBM ITTED, SOCIETY ALSO PROVIDES CERTAIN VOCATIONAL COURSES AND THE MAIN SOURCE OF REVENUE FOR THE SOCIETY IS VOCATIONAL TRAINING FEES. LD. AR SUBMITTED, IN ORDER TO SUSTAIN PRACTICAL TRAINING IN MAKING DYES, MOULDS AND TOOLS, PRECISION ENGINEERING MANUFACTURI NG ORDERS FROM PUBLIC SECTOR UNDERTAKINGS, HINDUSTAN AERONAUTICS LTD, DEFENCE RESEARCH LABORATORIES AND OTHER GOVERNMENT ORGANIZATIONS ARE BEING UNDERTAKEN. THE DESIGN MANUFACTURE OF TOOLS, DYES AND MOUNDS IS ALSO A PART OF THE VOCATIONAL TRAINING. IT WAS SUBMITTED THAT THE OBJECTS OF THE SOCIETY MAKES IT CLEAR THAT IT IS ESTABLISHED BASICALLY FOR THE TRAINING OF TECHNICAL PERSONNEL IN DESIGN AND MAKING TOOLS, DYES AND MOULDS. ALL OTHER OBJECTS ARE ONLY ANCILLARY IN NATURE AND ARE WITH A VIEW TO SUPPORT THE TRAINING OF TECHNICAL PERSONNEL. THUS, IT WAS SUBMITTED THAT THE MAIN OBJECT OF ASSESSEE BEING EDUCATION, ASSESSEE IS A CHARITABLE INSTITUTION IN TERMS WITH THE DEFINITION OF CHARITABLE PURPOSE U/S 2(15) OF THE ACT. LD. AR SUBMITTED, IF LEGISLATIVE HISTOR Y OF SECTION 2(15) WHICH DEFINES THE WORD 'CHARITABLE PURPOSE' IS ANLAYSED, IT WOULD BE SEEN THAT BY VIRTUE OF AMENDMENT MADE TO THE SAID SECTION W.E.F. 01/04/1984, THE WORDS 'NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT' WERE REMOVED. THEREFOR E, W.E.F. 01/04/1984, THERE IS NO RESTRICTION IN CARRYING OF ANY ACTIVITY FOR PROFIT SO LONG AS SUCH PROFIT OR GAIN IS UTILIZED FOR THE PURPOSE OF THE OBJECTS OF THE SOCIETY AS PROVIDED U/S 11 OF THE ACT. LD. AR SUBMITTED, RECEIPTS FROM SALE OF TOOLS ETC., MANUFACTURED IN THE PROCESS OF TRAINING CANNOT BE CONSIDERED TO BE COMMERCIAL ACTIVITY AS IT IS INCIDENTAL TO THE TRAINING PROGRAMMES UNDERTAKEN BY SOCIETY, WHICH IS AS PER THE OBJECT OF THE SOCIETY. LD. AR SUBMITTED, EVEN THE INTRODUCTION OF NEW PROVISO TO SUB - SECTION (15) TO SECTION 2 WITH EFFECT FROM 01/04/2009, WILL HAVE NO EFFECT ON ASSESSEE AS THE SAID PROVISO IS APPLICABLE RESIDUARY CLAUSE, 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' WHEREAS ASSESSEE IS BASICALLY ENGAGED IN PROVIDING EDUCATION. LD. AR SUBMITTED, SINCE THE SO CALLED COMMERCIAL ACTIVITY IS INEXTRICABLY LINKED WITH THE TRAINING ACTIVITY OF ASSESSEE, IT CANNOT BE SAID THAT ASSESSEE IS A NON - CHARITABLE INSTITUTION. LD. AR SUBMITTED, SOCIETY IS RUNNING ON NO PROFIT NO LOSS BASIS AND THE FEE STRUCTURE IS ALWAYS BASED ON THE NATURE OF TRAINING PROVIDED. THEREFORE, UNIFORM RATE OF FEE IS NOT FIXED FOR COURSE ORGANIZED. IN THIS CONTEXT, IT WAS SUBMITTED, SINCE SOCIETY IS ENGAGED IN PROVIDING TECHNICAL EDUCATION IN MANUFACTURE OF TOOLS AND DYES MOULDS, ETC., IT HAS TO ESTABLISH NECESSARY INFRASTRUCTURE LIKE CLASS ROOMS AND OTHER FACILITIES BESIDES PROVIDING TECHNICAL TRAINING ON THE MACHINERY USED IN THE MANUFACTURE OF DYES, ETC. FOR THIS PURPOSE, IT HAS INCURRED SUBSTANTIAL EXPEN DITURE, WHICH HAS TO BE REIMBURSED BY THE TRAINEES, WHO UNDERGOES TRAINING PROGRAMME CONDUCTED BY ASSESSEE. THEREFORE, CONSIDERED IN THE AFORESAID PERSPECTIVE, IT CANNOT BE SAID THAT ASSESSEE IS ENGAGED IN COMMERCIAL ACTIVITY. AS FAR AS ALLEGATION OF LD. D IT(E) THAT IT HAS EARNED SUBSTANTIAL AMOUNTS FROM SALE OF FINISHED GOODS, IT WAS SUBMITTED BY LD. AR THAT TOOLS ARE MANUFACTURED BY TRAINEES DURING THE TRAINING PROGRAMME, ASSESSEE MAKES AVAILABLE STOCKS OF RAW MATERIAL TO THE TRAINEES AND THE REQUIRED PLA NT AND MACHINERY IS ALSO PROVIDED. TRAINEES WITH THE KNOWLEDGE ACQUIRED DURING THE CLASS ROOM COURSE UNDERTAKES THE PROCESS OF PRODUCTION AND RESULTANT FINISHED GOODS , WASTE MATERIALS, ETC. ARE SOLD. HOWEVER, RECEIPTS FROM SALE EFFECTED VARIES BETWEEN 10% TO 15% OF THE TOTAL INCOME OF ASSESSEE. THUS, IT IS CLEAR THAT SOCIETY IS IMPARTING TECHNICAL EDUCATION AND IN THE PROCESS OF PROVIDING SUCH TRAINING CERTAIN PRODUCTS ARE PRODUCED WHICH ARE SOLD. THEREFORE, THE ACTIVITIES ARE CONSIDERED AS PART OF EDUCATI ON. ONLY BECAUSE SALES ARE RECORDED IN THE BOOKS OF ACCOUNT, IT WILL NOT ADVERSELY EFFECT ASSESSEE'S ENTITLEMENT TO REGISTRATION U/S 12A OF THE ACT. AS FAR AS ALLEGATION OF LD. DIT(E) THAT IT IS ALSO EARNING ROYALTY, LD. AR SUBMITTED, ASSESSEE USED TO IMPA RT VOCATIONAL TRAINING IN COLLABORATION WITH ECIL, SECUNDERABAD AND ANOTHER MSME ORGANIZATION I.E. PROTOTYPE DEVELOPMENT CENTRE, AGRA AND A PART OF THE FEES WAS RECEIVED FROM THEM ANNUALLY AS A ROYALTY WHICH ACTUALLY IS TRAINING FEES. EVEN OTHERWISE ALSO, RECEIPTS FROM ROYALTY FORMS NEGLIGIBLE PART OF THE TOTAL RECEIPTS. LD. AR SUBMITTED, FOR INITIAL TWO YEARS, ASSESSEE RECEIVED GRANTS FROM CENTRE, BECAUSE IN THE INITIAL PERIOD GRANTS WERE NEEDED FOR ESTABLISHMENT OF THE INSTITUTION. THEREAFTER, ASSESSEE HA S TO SUSTAIN ITSELF FOR WHICH IT NEEDED TO GENERATE FUND. THUS, IT WAS SUBMITTED BY LD. AR THAT OBJECTS OF ASSESSEE BEING EDUCATION AND ALL OTHER ACTIVITIES BEING ANCILLARY AND INCIDENTAL TO THE MAIN OBJECT AND FEES RECEIVED FROM THOSE ACTIVITIES HAVING BE EN UTILIZED FOR THE MAIN OBJECT, IT CANNOT BE SAID THAT ASSESSEE IS NOT A CHARITABLE INSTITUTION. LD. AR SUBMITTED, AT THE STAGE OF GRANT OF REGISTRATION U/S 12A, REGISTERING AUTHORITIES HAS TO BE SATISFIED WITH TWO THINGS, FIRSTLY, CHARITABLE NATURE OF TH E OBJECT AND PAGE 6 OF 10 SECONDLY, GENUINENESS OF THE ACTIVITY. ANY ENQUIRY RELATING TO ASSESSEE'S ELIGIBILITY FOR EXEMPTION U/S 11 CAN ONLY BE MADE BY AO AND NOT BY LD. DIT(E). IN SUPPORT OF HIS CONTENTION, LD. AR RELIED UPON A NUMBER OF DECISIONS, WHICH ARE AS UNDER : 1. CHARTERED SHIP BROKERS V. DIT(E) [2012] 53 SOT 172/25 TAXMANN.COM 289 (CHENNAI) 2. ICAI ACCOUNTING RESEARCH FOUNDATION V. DGIT(E) [2010] 321 ITR 73/[2009] 183 TAXMAN 462 (DELHI) 3. INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA V. DGIT(E) [2013] 358 ITR 91/217 TAXMAN 152/35 TAXMANN.COM 140 (DELHI) 4. HIMACHAL PRADESH ENVIRONMENT PROTECTION AND POLLUTION CONTROL BOARD V. CIT [2010] 42 SOT 343 (CHD.) 5. SIKKIM MANIPAL UNIVERSITY OF HEALTH, MEDICAL AND TECHNOLOGICAL SCIENCES V. CIT [2011] 43 SOT 206/[2010] 8 TAXMANN.COM 279 (KOL.) 6. ST. DON BOSCO EDUCATIONAL SOCIETY V. CIT [2004] 90 ITD 477 (LUCK.) . 7.1 LD. AR SUBMITTED, WHILE GRANTING REGISTRATION U/S 12A OF THE ACT, LD. DIT(E) CANNOT CONSIDER THE ASPECTS WHICH A RE TO BE EXAMINED AT THE TIME OF GRANT OF EXEMPTION U/S 11. IN THIS CONTEXT, HE RELIED UPON THE FOLLOWING DECISIONS: 1. CIT V. SURYA EDUCATIONAL AND CHARITABLE TRUST [2013] 355 ITR 280/203 TAXMAN 53/15 TAXMANN.COM 123 (PUNJ. & HAR.) . 2. HARDAYAL CHARITABLE & EDUCATIONAL TRUST V. CIT [2013] 355 ITR 534/214 TAXMAN 655/32 TAXMANN.COM 34 1 (ALL.) 3. DIT (E) V. CHARTERED ACCOUNTANTS STUDY CIRCLE [2012] 347 ITR 321/23 TAXMANN.COM 444 (MAD.) 7.2 AS FAR AS THE DECISION RELIED UPON BY LD. DIT (E), LD. AR SUBMITTED, THE FACTS INVOLVED IN THE SAID DECISION BEING TOTALLY DIFFERENT, RATIO LAID DOWN IN THAT CASE, WILL NOT APPLY TO ASSESSEE'S CASE. 8. LD. DR, ON THE OTHER HAND, SUPPORTING THE ORDER OF LD. DIT(E), SUBMITTED, PERUSAL OF OBJECTS OF ASSE SSEE SOCIETY WOULD CLEARLY INDICATE THAT OBJECTS ARE NOT RESTRICTED TO EDUCATIONAL PURPOSE ALONE. SPECIFICALLY REFERRING TO OBJECT CLAUSE 2 & 3, LD. DR SUBMITTED THAT THEY ARE IN THE NATURE OF CONSULTANCY, WHICH GENERATES ROYALTY INCOME FOR ASSESSEE. LD. D R SUBMITTED, SINCE THE OBJECT OF ASSESSEE SOCIETY IS NOT PURELY EDUCATIONAL, IT CANNOT BE SAID THAT THE RESTRICTION IMPOSED UNDER PROVISO TO 2(15) WOULD NOT APPLY TO ASSESSEE. HE, THEREFORE, SUBMITTED, SINCE ASSESSEE HAS EARNED SUBSTANTIAL REVENUE IN DIFFE RENT AYS FROM COMMERCIAL ACTIVITY, LD. DIT(E) WAS JUSTIFIED IN REJECTING ASSESSEE'S APPLICATION FOR GRANT OF REGISTRATION. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE ORDER OF LD. DIT(E) AS WELL AS OTHER MATERIAL ON RECORD. IT IS C LEAR FROM THE ORDER OF LD. DIT(E) THAT HE HAS CONSIDERED ASSESSEE AS NON - CHARITABLE INSTITUTION BECAUSE IT HAS RECEIPTS FROM THE SALE OF FINISHED GOODS PAGE 7 OF 10 AND SECONDLY IT HAS EARNED ROYALTY. THUS, LD. DIT(E) IS OF THE VIEW THAT AS ASSESSEE IS ENGAGE IN COMMER CIAL ACTIVITY IT IS A NON - CHARITABLE INSTITUTION, HENCE, NOT ELIGIBLE FOR REGISTRATION U/S 12A OF THE ACT. BEFORE DECIDING THE ISSUE, LET US EXAMINE THE OBJECTS OF ASSESSEE SOCIETY WHICH ARE AS UNDER: '( I ) TRAINING OF THE TECHNICAL PERSONNEL IN DESIGNING AND MAKING TOOLS, DYES AND MOULDS, ( II ) PROVISION FOR ADVISORY SERVICES TO SMALL SCALE UNITS, INCLUDING ASSISTANCE IN DESIGNING AND DEVELOPING TOOLS FOR VARIOUS PROCESSES, ( III ) RECOMMENDING MEASURES TO STANDARDIZE COMPONENTS, DYES, JIGS AND OTHER TOOLS, ( IV ) PRODUCTION ON A LIMITED BASIS OF DIES, JIGS, FIXTURES AND GAUGES ETC., SUBJECT TO THE CONDITION THAT THE JOB WORK UNDERTAKEN BY THE CITD PROMOTE THE TRAINING REQUIREMENTS OF THE INSTITUTE, ( V ) TO AWARD CERTIFICATES AS MAY BE APP ROPRIATE TO THOSE WHO HAVE SUCCESSFULLY COMPLETED THE TRAINING COURSE, ( VI ) TO INSTITUTE AND AWARD FELLOWSHIPS, SCHOLARSHIPS, PRIZES AND MEDALS IN ACCORDANCE WITH THE RULES AND REGULATIONS, ( VII ) TO IMPOSE AND RECOVER AFFILIATION AND OTHER FEE AND CHARGES FOR SERVICES RENDERED, ( VIII ) TO SELL OR DISPOSE OF PRODUCTS, BYE - PRODUCTS OR WASTE MATERIAL, ARISING OUT OF OR INCIDENTAL TO THE SOURCES OF TRAINING.' 9.1 THOUGH, ON A CURSORY LOOK AT THE OBJECTS IT APPEARS THAT ASSESSEE SOCIETY IS ENGAGED IN VARIOUS ACTIVITIES INCLUDING CONSULTANCY, BUT, ON DEEPER ANALYSIS CERTAINLY ONE GETS THE IMPRESSION THAT PRIMARY OBJECT OF THE ASSESSEE IS TO IMPART TRAINING IN VARIOU S COURSES OF PREPARING AND DESIGNING TOOLS, MOULDS, DYES ETC., WHICH IS AN ACTIVITY IN THE FIELD OF EDUCATION AND ALL OTHER OBJECTS ARE ANCILLARY AND INCIDENTAL TO THE SAID MAIN OBJECT. A PLAIN READING OF DEFINITION OF 'CHARITABLE PURPOSE' AS PROVIDED U/S 2(15) OF THE ACT WOULD MAKE IT CLEAR THAT THE RESTRICTION IMPOSED UNDER THE PROVISO TO THE SAID SECTION APPLIES TO ONLY THE LAST LIMB, ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY'. THERE IS NO EXPRESS PROVISION U/S 2(15) OF THE ACT, WHICH RES TRICTS A TRUST OR INSTITUTION FROM UNDERTAKING ANY BUSINESS OR COMMERCIAL ACTIVITY IF IT COMES UNDER ANY OTHER LIMB OF 'CHARITABLE PURPOSE'. ONLY REQUIREMENT PERHAPS IS, THE ASSESSEE MUST NOT HAVE PROFIT MOTIVE AND THE INCOME GENERATED FROM COMMERCIAL ACTI VITY IS UTILIZED FOR ACHIEVING THE CHARITABLE OBJECT. ON GOING THROUGH THE ORDER OF LD. DIT(E) IT IS CLEAR THAT HE HAS NOT EXPRESSED ANY OPINION UNDER WHICH LIMB OF 'CHARITABLE PURPOSE' ASSESSEE'S ACTIVITY CAN BE CLASSIFIED. ONLY OBSERVATION MADE BY HIM IS ASSESSEE IS INVOLVED IN BOTH CHARITABLE AND NON - CHARITABLE ACTIVITIES. EVEN, LD. DIT(E) HAS NOT SPECIFICALLY REFERRED TO THE FIRST PROVISO TO SECTION 2(15) WHILE HOLDING THAT ASSESSEE IS NOT ENTITLED FOR REGISTRATION AS IT IS ENGAGED IN COMMERCIAL ACTIVIT Y. HOWEVER, AS COULD BE UNDERSTOOD FROM THE SUBMISSIONS OF LD. DR, ACCORDING TO DEPARTMENT ASSESSEE'S ACTIVITY COMES UNDER THE LAST LIMB OF SECTION 2(15), HENCE, THE PROVISO APPLIES. EVEN ASSUMING THAT ASSESSEE'S OBJECTS/ACTIVITY COMES WITHOUT THE LAST LIM B, VIZ; 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY', THE PROVISO TO SECTION 2(15) WILL NOT AUTOMATICALLY DISQUALIFY THE ASSESSEE FROM BEING CONSIDERED AS A SOCIETY ESTABLISHED FOR CHARITABLE PURPOSE ONLY BECAUSE IT HAS RECEIPTS FROM SALE OF DYES, MOULDS ETC. OR FROM ROYALTY. IT HAS TO BE SEEN WHETHER THE PRIMARY OR DOMINANT PURPOSE OR OBJECT OF THE ASSESSEE IS TO CARRY OUT 'OBJECT OF GENERAL PUBLIC UTILITY' OR 'ANY ACTIVITY OF PROFIT'. IF FOR ACHIEVING ITS PRIMARY OR DOMINANT OBJECT OF 'EDUC ATION' OR EVEN 'ADVANCEMENT OF ANY OTHER OBJECT OF PUBLIC UTILITY' THE SOCIETY HAS EARNED SOME INCOME FROM BUSINESS IT CANNOT BE SAID THAT ASSESSEE HAS CARRIED ON BUSINESS ACTIVITY WITH A PROFIT MOTIVE. CHARITABLE ACTIVITIES ALSO REQUIRE OPERATIONAL/RUNNIN G PAGE 8 OF 10 EXPENSES AS WELL AS CAPITAL EXPENSES FOR BEING ABLE TO SUSTAIN ITSELF AND CONTINUE IN LONG RUN. THERE IS NO SUCH STATUTORY MANDATE THAT A CHARITABLE INSTITUTION FALLING UNDER THE RESIDUARY CLAUSE SHOULD BE WHOLLY, SUBSTANTIALLY OR IN PART FUNDED BY VOLUN TARY CONTRIBUTIONS. THE HON'BLE SUPREME COURT IN CASE OF ADDL. CIT V. SURAT ART SILK CLOTH MFGR. ASSOCIATION [1978] 121 ITR 1/[1979] 2 TAXMAN 501 (SC) HAS HELD AS UNDER: ' THE TEST WHICH HAS, THEREFORE, NOW TO BE APPLIED IS WHETHER THE PREDOMINANT OBJECT OF THE ACTIVITY INVOLVED IN CARRYING OUT THE OBJECT OF GENERAL PUBLIC UTILITY IS TO SUBSERVE THE CHARITABLE PURPOSE OR TO I EARN PROFIT. WHERE PROFIT - MAKING IS THE PREDOMINA NT OBJECT OF THE ACTIVITY, THE PURPOSE, THOUGH AN OBJECT OF GENERAL PUBLIC UTILITY, WOULD CEASE TO BE A CHARITABLE PURPOSE. BUT WHERE THE PREDOMINANT OBJECT OF THE ACTIVITY IS TO CARRY OUT THE CHARITABLE PURPOSE AND NOT TO EARN PROFIT, IT WOULD NOT LOSE IT S CHARACTER OF A CHARITABLE PURPOSE MERELY, BECAUSE SOME PROFIT ARISES FROM THE ACTIVITY. THE EXCLUSIONARY CLAUSE DOES NOT REQUIRE THAT THE ACTIVITY MUST BE CARRIED ON IN SUCH A MANNER THAT IT DOES NOT RESULT IN ANY PROFIT. IT WOULD INDEED BE DIFFICULT FOR II PERSONS IN CHARGE OF A TRUST OR INSTITUTION TO SO CARRY ON THE ACTIVITY THAT THE EXPENDITURE BALANCES THE INCOME AND THERE IS NO RESULTING I PROFIT. THAT WOULD NOT ONLY BE DIFFICULT OF PRACTICAL REALIZATION BUT WOULD ALSO REFLECT UNSOUND PRINCIPLE OF M ANAGEMENT.' 9.2 AFORESAID PRINCIPLE LAID DOWN BY THE HON'BLE APEX COURT STILL HOLD GOOD EVEN AFTER INTRODUCTION OF PROVISO TO SECTION 2(15) BY FINANCE ACT, 2008 W.E.F. 01/04/2009. THE WORDS 'ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERATION' WAS CONSIDERED AND INTERPRETED BY HON'BLE DELHI HIGH COURT IN CASE OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA V. DGIT (EXEMP TIONS) [2012] 347 ITR 99/[2011] 202 TAXMAN 1/13 TAXMANN.COM 175 , AS UNDER: 'SECTION 2(15) DEFINES THE TERM 'CHARITABLE PURPOSE'. THEREFORE, WHILE CONSTRUING THE TERM 'BUSI NESS' FOR THE SAID SECTION, THE OBJECT AND PURPOSE OF THE SECTION HAS TO BE KEPT IN MIND. WE DO NOT THINK THAT A VERY BROAD AND EXTENDED DEFINITION OF THE TERM 'BUSINESS' IS INTENDED FOR THE PURPOSE OF INTERPRETING AND APPLYING THE FIRST PROVISO TO SECTION 2(15) OF THE ACT TO INCLUDE ANY TRANSACTION FOR A FEE OR MONEY. AN ACTIVITY WOULD BE CONSIDERED 'BUSINESS' IF IT IS UNDERTAKEN WITH A PROFIT MOTIVE, BUT IN SOME CASES THIS MAY NOT BE DETERMINATIVE. NORMALLY, THE PROFIT MOTIVE TEST SHOULD BE SATISFIED BUT IN A GIVEN CASE ACTIVITY MAY BE REGARDED AS BUSINESS EVEN WHEN PROFIT MOTIVE CANNOT BE ESTABLISHED/ PROVED. IN SUCH CASES, THERE SHOULD BE EVIDENCE AND MATERIAL TO SHOW THAT THE ACTIVITY HAS CONTINUED ON SOUND AND RECOGNIZED BUSINESS PRINCIPLES, AND PURSUE D WITH REASONABLE CONTINUITY. THERE SHOULD BE FACTS AND OTHER CIRCUMSTANCES WHICH JUSTIFY AND SHOW THAT THE ACTIVITY UNDERTAKEN IS INFECT IN THE NATURE OF BUSINESS. THE TEST AS PRESCRIBE IN RAIPUR MANUFACTURING CO. (SUPRA) AND SAI PUBLICATION FUND (SUPRA) CAN BE APPLIED. THE SIX INDICIA STIPULATED IN LORD FISHER (SUPRA) ARE ALSO RELEVANT. EACH CASE, THEREFORE, HAS TO BE EXAMINED ON ITS OWN FACTS.' 9.3 THUS, THE PRINCIPLE OF LAW WHICH EMERGES FROM THE JUDICIAL PRONOUNCEMENTS IS, IF THE PREDOMINANT OBJECT OF A TRUST OR INSTITUTION IS CHARITABLE AND IN THE PROCESS OF ACHIEVING THAT OBJECT SOME ACTIVITY OF COMMERCIAL NATURE GENERATING INCOME IS CARRIED OUT, WHICH AGAIN IS UTILIZED FOR CHARITABLE OBJECT, IT CANNOT BE SAID THAT THE TRUST OR INSTITUTION IS NOT ESTA BLISHED FOR CHARITABLE PURPOSE. MOREOVER, THE APPLICATION OF PROVISO TO SECTION 2(15), AS RIGHTLY POINTED OUT BY LD. AR, HAS TO BE LOOKED INTO AT THE STAGE OF ASSESSMENT WHILE EXAMINING ASSESSEE'S CLAIM OF EXEMPTION U/S 11 OF THE ACT AND NOT AT THE TIME GR ANTING REGISTRATION U/S 12AA. THIS IS BECAUSE, THOUGH, THE FIRST PROVISO TO SECTION 2(15) OF THE ACT EXCLUDES ANY ACTIVITY OF THE NATURE OF TRADE, COMMERCE OR BUSINESS FROM BEING CONSIDERED TO BE A CHARITABLE PURPOSE, BUT, THE SECOND PROVISO TO SECTION 2(1 5) RESTRICTS THE APPLICATION OF FIRST PROVISO ONLY TO SUCH TRUSTS AND INSTITUTIONS HAVING RECEIPTS FROM COMMERCIAL ACTIVITY EXCEEDING A PRESCRIBED LIMIT IN A PARTICULAR PREVIOUS YEAR. THEREFORE, APPLICATION OF PROVISO TO SECTION 2(15) HAS TO BE LOOKED INTO IN EVERY ASSESSMENT YEAR. FURTHER, LD. AR HAS DEMONSTRATED BEFORE US, RECEIPTS FROM SALES OF FINISHED GOODS AND ROYALTY FORMS ONLY A SMALL PERCENTAGE OF TOTAL RECEIPTS OF THE ASSESSEE. THEREFORE, IT CANNOT BE SAID THAT ASSESSEE IS MAINLY ENGAGED IN COMMER CIAL ACTIVITY. PAGE 9 OF 10 9.4 ANOTHER IMPORTANT ASPECT WORTH MENTIONING IS, IN COURSE OF HEARING LD. AR BROUGHT TO OUR NOTICE, THAT SIMILAR INSTITUTIONS ESTABLISHED IN OTHER PARTS OF THE COUNTRY HAVE BEEN GRANTED REGISTRATION U/S 12AA OF THE ACT. TO SUBSTANTIATE SUCH CLAIM, HE SUBMITTED REGISTRATION CERTIFICATES GRANTED TO SIMILAR INSTITUTIONS AT BHUBANESWAR, INDORE AND AURANGABAD. THOUGH, LD. AR SUBMITTED THAT THIS FACT WAS ALSO PLACED BEFORE LD. DIT(E), BUT, THE ORDER OF LD. DIT(E) IS TOTALLY SILENT ON THE ISSUE. BE THAT AS IT MAY, IF SIMILAR INSTITUTIONS ESTABLISHED BY CENTRAL GOVT. IN OTHER STATES HAVING SIMILAR OBJECT HAVE BEEN GRANTED REGISTRATION U/S 12AA, AS IS THE CASE IN BHUBANESWAR, INDORE AND AURANGABAD, WE DO NOT FIND ANY JUSTIFIABLE REASON WHY ASSESSEE SH OULD BE DEPRIVED FROM AVAILING SUCH BENEFIT. IN THE AFORESAID FACTS AND CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDER OF LD. DIT(E) AND REMIT THE MATTER BACK TO HIM TO VERIFY THIS ASPECT AND IF IT IS FOUND THAT INSTITUTIONS IN OTHER PLACES HAVING SIMILAR OBJECT HAVE BEEN GRANTED REGISTRATION U/S 12AA, HE MAY CONSIDER GRANTING REGISTRATION U/S 12AA OF THE ACT TO ASSESSEE. LD. DIT(E) MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. [68 TAXMANN.COM 47] 7. F URTHER, LD. AUTHORIZED REPRESENTATIVE PLACED BEFORE AFTER DECISION OF THE HONBLE ORISSA HIGH COURT IN CASE OF ORISSA TRUST OF TECHNICAL EDUCATION AND TRAINING. VERSUS CIT 24 TAXMANN.COM 202 (2012) (ORISSA), WHICH IS AN ORDER WHEN THE APPLICATION FOR REGISTRATION UNDER SECTION 10 (23C) OF THE ASSESSEE WAS REJECTED O N THE GROUND THAT ASSESSEE WAS ENGAGED IN N ON EDUCATIONAL ACTIVITIES OF HORTICULTURAL AND GENERATING INCOME FROM IT AND WHERE THE ASSESSEE HAS COLLECTED FEES UNDER THE HEAD PLACEMENT AND TRAINING FROM STUDENTS WH ICH WAS NOT IN CONFORMITY WITH THE FEES PRESCRIBED, HONBLE HIGH COURT HAS HELD THAT AMOUNT RECEIVED FROM HORTICULTURAL HAD BEEN UTILISED IN EDUCATIONAL ACTIVITIES OF THE INSTITUTION AND FOR INFRASTRUCTURE DEVELOPMENT. THEREFORE, IT COULD NOT BE TREATED TH AT THE PROFIT WAS ON FOR NON - EDUCATIONAL ACTIVITIES. 8. LD. DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY OTHER CONTRARY DECISION TO SUPPORT THE VIEW OF THE LD. CIT. IN VIEW OF THIS RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ORISSA HIGH COURT IN CASE OF ORISSA TRUST OF TECHNICAL EDUCAT ION AND TRAINING VS CIT (SUPRA) AND COORDINATE BENCH WE DO NOT FIND ANY PLAUSIBLE REASON WHY ASSESSEE SHOULD BE DEPRIVED OF REGISTRATION UNDER SECTION 12 AA OF THE INCOME TAX ACT FROM AVAILING SUCH BENEFIT WHEN IF IN ANY OF THE YEAR THE ASSESSEE IS FOUND TO HAVE VIOLATED THE PROVISIONS OF SECTION 11, 12 AND 13 OF THE INCOME TAX ACT, SUCH REGISTRATION CANE BE WITHDRAWN. FURTHER, IF SIMILAR INSTITUTIONS ESTABLISHED BY CENTRAL GOVERNMENT IN OTHER STATES HAVING SIMILAR OBJECTS HAVE BEEN GRANTED REGISTRATION UNDER SECTION 12 AA OF THE INCOME TAX ACT AS STATED BY THE LD. AUTHORIZED REPRESENTATIVE AND SUBMITTED THE RESPECTIVE SUCH REGISTRATION CERTIFICATE , WE ARE ALSO OF THE VIEW THAT THERE IS NO REASON TO SINGLE OUT THE AS SESSEE FOR NOT GRANTING SUCH REGISTRATION. THEREFORE WE SET ASIDE THE IMPUGNED ORDER OF LD. CIT, MEERUT AND REMIT THE ISSUE BACK TO HIM TO VERIFY PAGE 10 OF 10 THE ABOVE FACTS AND IF IT IS FOUND THAT THE INSTITUTIONS IN OTHER PLACES HAVING SIMILAR OBJECTS HAVE BEEN GRAN TED REGISTRATION UNDER SECTION 12 AA HE MAY CONSIDER GRANTING REGISTRATION UNDER THIS ACT TO THE ASSESSEE UNDER THE RESPECTIVE SECTION APPLIED FOR. THAT THE ASSESSEE MAY BE GRANTED REASONABLE OF PORTUGAL DUE BEING HEARD AND TO ADDUCE ANY FURTHER EVIDENCE W HICH IT WOULD LIKE TO PLACE BEFORE HIM. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 1 3 / 02 / 2017 . - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 02 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI