Indian Welding Society, New Delhi V. DIT (Exemption), New Delhi

ITA 6259/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8064 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-03-2016
• Assessment Year: misc
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Keywords: Charitable institution; Source of fund
• Section: 12A; 12AA; 12

Judgement Text

ITA NO. 6259/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A.NO.6259/DEL/2013 AY ----------- INDIAN WELDING SOCIETY H-36, SAKET NEW DELHI 110 017 (PAN: AAATI9335E) VS. DIRECTOR OF INCOME TAX (EXEMPTIONS), AAYAKAR BHAWAN, CIVIC CENTRE, NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. NIREN GUPTA, CA DEPARTMENT BY : SH. D.K. MISHRA, CIT(DR) DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 08 0808 08- -- -03 0303 03- -- -201 201 201 2016 66 6 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 27 2727 27- -- -04 0404 04- -- -201 201 201 2016 66 6 ORDER ORDER ORDER ORDER PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 30.9.2013 OF THE LD. DIRECTOR OF INCOME TAX (EXEMPT IONS), NEW DELHI. ITA NO. 6259/DEL/2013 2 2. THE ASSESSEE HAS FILED THE REVISED GROUNDS OF A PPEAL WHICH READ AS UNDER:- I) THAT WITHOUT APPRECIATING THE FACTS AND CIRCUMS TANCES OF THE CASE AND IN LAW, THE LD. DIT(E) WAS NOT JUSTIFIED IN REJ ECTING THE APPLICATION FOR REGISTRATION U/S. 12A OF THE INCOME TAX ACT AND THAT IT MAY BE HELD THAT THE ASSESSEE WAS IMPARTING EDU CATION WITHIN THE MEANING OF SECTION 2(15) OF THE ACT AND THE DIT (E) BE DIRECTED TO GRANT REGISTRATION U/S. 12A OF THE ACT. II) THAT WHILE HOLDING THAT THE ASSESSEE WAS CARRYI NG OF ACTIVITY OF GENERAL PUBLIC UTILITY, THE LD. DIT(E) HAS ERRED IN FACTS AND IN LAW IN HOLDING THAT THE ACTIVITIES CARRIED ON BY THE ASSES SEE WERE HIT BY THE PROVISIO TO SECTION 2(15) OF THE INCOME TAX ACT AND HOLDING THAT THE ACTIVITIES CARRIED OUT BY THE ASSESSEE ARE IN NATUR E OF BUSINESS AND DENYING THE REGISTRATION U/S. 12A OF THE ACT. THAT THE DIT(E) BE DIRECTED TO GRANT REGISTRATION U/S. 12A OF THE ACT IN THE INTEREST OF JUSTICE. III) THAT THE APPELLANT CRAVES LEAVE TO ADD, TO MOD IFY, RESCIND, SUPPLEMENT OR ALTER ANY OF THE GROUNDS STATED HEREI NABOVE, EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E SOCIETY HAS FILED AN APPLICATION IN FORM NO. 10A ON 30.3.2013 SEEKING RE GISTRATION U/S. 12A OF THE INCOME TAX ACT, 1961. ACCORDINGLY, THE ASSESSEE WA S ISSUED NOTICE DATED 25.4.2013 REQUESTING IT TO SUBMIT CERTAIN DOCUMENT S / EXPLANATIONS. IN RESPONSE THERETO ASSESSEES AUTHOISED REPRESENTATIVE AND IT S SECRETARY ATTENDED THE PROCEEDINGS AND FILED THE DETAILS/DOCUMENTS FROM TI ME TO TIME. AFTER ITA NO. 6259/DEL/2013 3 CONSIDERING THE SAME, LD. DIT(E) HAS REJECTED THE APPLICATION FOR GRANT OF REGISTRATION U/S. 12A BY HOLDING THAT ACTIVITIES OF THE APPLICANT FALL UNDER THE CATEGORY OF GENERAL PUBLIC UTILITY (GPU) AND ARE IN THE NATURE OF BUSINESS. IT WAS FURTHER HELD BY THE DIT(E) THAT THE RECEIPTS OF TH E APPLICANT FOR THE PERIOD ENDING AS ON 31.3.2013 ARE RS. 56,08,255/-, THE BREAK-UP O F WHICH IS (I) STRUCTURED COURSE SUBSCRIPTION AT RS. 10,71,085/- (II) SEMINA R AND DELEGATE/PARTICIPATION COURSE SUBSCRIPTION AT RS. 9,07,205/-; (III) SUPPOR TS / SPONSORSHIP RS. 22,24,300/-; AND (IV) SHARE INCOME FROM COLLABORATI ON AT RS. 5,95,665/-. SHE FURTHER HELD THAT THE APPLICANTS CASE CLEARLY COME S UNDER THE PROVISO TO SECTION 2(15) OF THE INCOME TAX ACT, 1961 AND THE APPLICANT IS NOT ELIGIBLE FOR REGISTRATION U/S. 12 OF THE ACT. AS ITS GROSS RECEIPTS ARE MORE THAN THE INCOME AS STIPULATED IN 2 ND PROVISO TO SECTION 2(15), THE APPLICANTS APPLICAT ION FOR REGISTRATION U/S. 12A IS LIABLE TO BE REJECTED. ACCORDINGLY, THE LD. DIT (E) REJECTED THE APPLICATION FOR REGISTRATION U/S. 12A VIDE IMPUGNED ORDER DATED 30 .9.2013 PASSED U/S. 12AA(1)(B) R.W.S. 12A OF THE I.T. ACT, 1961. FOR TH E SAKE OF CLARITY, THE OPERATIVE PORTION OF THE LD. DIT(E)S ORDER DATED 30.9.2013 V IDE PARA NO. 3 TO 7 AT PAGES 1 TO 7 IS REPRODUCED HEREUNDER:- 3. THE APPLICANT SOCIETY WAS CREATED ON 4TH DAY M ARCH, 2002 VARIOUS AIMS AND OBJECTS. SOME OF THEM ARE GIVEN BELOW :- I) TO PROMOTE THE ADVANCEMENT OF WELDING/ CUTTING & HARD FACING AND RELATED TECHNOLOGIES AND ALLIED SCIENCES WHILE THE SOCIETY MAY DECIDED/ FROM TIME TO TIME. ITA NO. 6259/DEL/2013 4 II) TO FACILITATE EXCHANGE OF IDEAS/ INFORMATION/ D EVELOPMENT/ ETC. AMONGST MEMBERS/ BY ORGANISING LECTURE WORKSHOPS/ S EMINARS/ SYMPOSIA; CONFERENCES AND DEVELOPMENT PROGRAMME/ PU BLISH PERIODICALS, BOOKS, JOURNALS, AND MAGAZINES/ AND DE VELOP SOFTWARE AND EDUCATIONAL PROQRAMMES, VIDEO FILMS AN D TRAINING PACKAGES RELATING TO THE OBJECTIVES OF THE SOCIETY. III) TO OFFER FLEXIBLE CLASS ROOM/ DISTANCE LEARNI NG PROGRAMMES IN VARIOUS ASPECTS OF WELDING AND RELATED TECHNOLOG Y THAT SUIT THE REQUIREMENT OF VARIOUS LEVELS. IV) TO PROMOTE PROFESSIONAL EXCHANGE OF INFORMATION / EXPERIENCE AND ADVANCED TRAINING WITHIN AND AMONG VARIOUS COUN TRIES ACROSS THE GLOBE. V) TO ENTER INTO ARRANGEMENTS FOR PROVIDING MEMBER OF THE SOCIETY WITH ADVICE AND ASSISTANCE ON ALL MATTERS CONNECTED WITH THE OBJECTS COVERED BY THIS MEMORANDUM. VI) TO ADMIT ANY PERSON TO BE HONORARY MEMBER OF TH E SOCIETY ON SUCH TERMS AND TO CONFER ON THEM SUCH RIGHTS AND PR IVILEGES/ AS MAY SEEM EXPEDIENT. 3.1 THE APPLICANT HAS FILED NOTE ON ACTIVITIES, AS PER ACTIVITIES NOTE, THE APPLICANTS HOLDS STRUCTURED COURSES FOR CLASSRO OM TEACHING FOR WELDERS, FRESH ENGINEERS, ETC. ON VARIOUS WELDING R ELATED SUBJECTS. CERTAIN FEES IS COLLECTED FROM THE PARTICIPANTS TO MEET THE EXPENSES UNDER THE HEAD STRUCTURED COURSE SUBSCRIPTION. SIMI LARLY, CERTAIN EDUCATION SEMINARS, SYMPOSIUMS, WORKSHOP AND TRAINI NG, ETC. ARE ALSO BEING CONDUCTED FOR WHICH ALSO FEE IS CHARGED. DELEGATE FEE IS ITA NO. 6259/DEL/2013 5 CHARGED FROM THE ATTENDEES TO MEET THE COST OF FOOD , PRINTING MATERIALS, VENUE RENT, HONORARIUMS TO SPEAKERS AND TRAINERS, ETC. THERE ARE PROGRAMMES, WHICH ARE CONDUCTED FREE OR A T CONCESSIONAL AMOUNTS ALSO DEPENDING ON THE TYPE OF PEOPLE ATTENDING THE EDUCATION PROGRAMMES. ANOTHER HEAD OF INCOME IS 'THROUGH ADVERTISEMENT AND SPONSORSHIP CONTRIBUTION S RECEIVED FROM ENTITIES WHO WISH TO PARTICIPATE. A PERUSAL OF THE DETAILS FILED BY THE APPLICANT REVEALED THAT IT INTENDS TO UPGRADE THE S KILLS OF THE INTERESTED PEOPLE IN TRADE AND STUDENTS IN THE FIEL D OF WELDING. FOR THIS PURPOSE, IT IS RUNNING REGULAR COURSES, DISTAN CE LEARNING COURSES AND HAS ENTERED INTO MOU WITH VARIOUS UNIVERSITIES, I.E., ANNAMALILI UNIVERSITY, NATIONAL COLLEGE OF TIRUCHIRAPALLI, SR I RAMAKRISHNA ADVANCES TRAINING INSTITUTE, LIT CHENNAI, BHARATHID ASHAN UNIVERSITY, TAMIL NADU. 4. IT IS, HOWEVER, NOTED FROM THE INCOME AND EXPEND ITURE ACCOUNT FOR ASSTT. YEAR 2011-12, 2012-13 AND 2013-14 THAT A SSESSEE HAS REGULARLY BEEN CHARGING FEES FOR THE ABOVE REFERRED ACTIVITIES / SERVICES RENDERED, WHICH IS AS UNDER :- S.NO. S.NO. S.NO. S.NO. NATURE OF INCOME NATURE OF INCOME NATURE OF INCOME NATURE OF INCOME ASSTT. YEAR ASSTT. YEAR ASSTT. YEAR ASSTT. YEAR 2011 2011 2011 2011- -- -12 1212 12 ASSTT. YEAR ASSTT. YEAR ASSTT. YEAR ASSTT. YEAR 2012 2012 2012 2012- -- -13 1313 13 ASSTT. YEAR ASSTT. YEAR ASSTT. YEAR ASSTT. YEAR 2013 2013 2013 2013- -- -14 1414 14 1. STRUCTURED COURSE SUBSCRIPTION - - 10,71,086/ - 2. DELEGATION / PARTICIPATION SUBSCRIPTION 24,21,279 26,59,880/- 9,07,205/- 3. SUPPORT / SPONSORSHIP 24,22,692/ - 10,50,650/ - 22,24,300/ - ITA NO. 6259/DEL/2013 6 4. ADVERTISEMENT 1,62,000/ - 4,65,200/ - 8,10,000/ - 5. SHARE INCOME FROM COLLABORATION 3,43,607/ - 1,16,748/ - 5,95,665/ - 5.1 AFTER GOING THROUGH THE DETAILS FILED BY THE A PPLICANT, IT WAS NOTED THAT THE APPLICANTS ACTIVITIES FALL WITHIN TH E AMBIT OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY AND THE APPLICANT IS CHARGING FEES FOR ITS SERVICES. AS THE NATURE OF THE ACTIVITIES CARRIED OUT BY THE APPLICANT WERE FOUND TO BE IN THE NATURE OF BUSINESS, THE APPLICANT WAS GIVEN AN OPPORTUNITY TO EXPLAIN AS TO WHY ITS APPLICATION BE NOT REJECTED IN VIEW OF THE PROVISO TO SECTION 2(15) OF THE INCOME TAX ACT. 5.2 IN RESPONSE TO THE SAME, THE APPLICANT FILED IT S REPLY VIDE LETTER DATED 25.9.2013. 5.3 THE APPLICANT HAS SUBMITTED AS UNDER :- ' THE ASSESSEE SOCIETY IS DIRECTLY ENGAGED IN IMPAR TING EDUCATION IN A SPECIALIZED FIELD OF WELDING TECHNOLOGY THROUGH A WIDE SPECTRUM OF MEANS AND MEDIA. A DETAINED NOTE ON THE ACTIVITI ES, STRUCTURE, METHOD OF EDUCATION AND THE ACHIEVEMENTS ARE ENUMER ATED HEREIN BELOW ;- I. PROVIDING EDUCATION ON WELDING & RELATED SUBJECTS. I) CONDUCTING STRUCTURAL CLASSROOM PROGRAMMES (FULL TI ME AND PART TIME COURSES ON WELDING) II) CONDUCTING DISTANCE EDUCATION IN WELDING WITH AFFI LIATED UNIVERSITIES / INSTITUTIONS. ITA NO. 6259/DEL/2013 7 III) EDUCATION/ TRAINING AND SKILL DEVELOPMENT OF THE WE LDER PARTICULARLY YOUTH BELOW POVERTY LINE AND JOBLESS/ ETC. IV) PUBLISHING WELDING JOURNAL. V) SPREADING THE KNOWLEDGE OF WELDING AND EDUCATING ON UPDATES IN TECHNOLOGY; NEW MATERIALS THROUGH SEMINAR/ WORKSHOP SYMPOSIUM/ CONFERENCE PANEL DISCUSSION OF EXPERTS/ ETC. VI) PARTICIPATION/ ASSOCIATION / INTERACTION WITH INTER NATIONAL FORUM IN WELDING. VII) PARTICIPATION WITH NATIONAL GOVERNMENT / SEMI GOVER NMENT AGENCIES AND PROGRAMMES /SCHEME VIII) PUBLICATION OF COURSE MATERIAL AND BOOKS. IX) LIBRARY AT TIRUCHIRAPPALLI X) ENCOURAGEMENT TO STUDENTS AND RECOGNITION XI) NATIONAL WELDERS SKILL COMPETITION. II. ACTIVITIES RELATED TO RELIEF TO POOR. III. ROLE IN MEDICAL RELIEF IV. ROLE IN PRESERVATION OF ENVIRONMENT (INCLUDING WATER SHEDS/ FORESTS AND WILD LIFE) AND PRESERVATION OF MONUMENTS OR PLA CE OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST. IN THE LIGHT OF ABOVE, THE APPLICANT STATED THAT AC TIVITY OF THE SOCIETY IS TO PROVIDE EDUCATION IN FIELD OF WELDING AND IT FULLY COMPLIES TO THE CHARITABLE PURPOSE AS PER SECTION 2 (15) OF INCOME TAX. 5.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE APPLICANT AND GONE THROUGH THE DETAILS FILED BY IT. THERE IS NO MERIT ITA NO. 6259/DEL/2013 8 IN APPLICANT'S SUBMISSION THAT ITS ACTIVITIES FALL UNDER THE DEFINITION OF EDUCATION. THE ACTIVITIES OF THE APPLICANT RUNNIN G SKILL ENHANCEMENT COURSE CANNOT BE CONSIDERED AS IMPARTI NG EDUCATION. IN THIS REGARD, A REFERENCE IS MADE TO THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF SOLE TRUSTEE LOK SHIKSHA TRUST VS. CIT (1975) 10 ITR 234 (SC) WHEREIN THE APEX COU RT HAS EXPLAINED THE MEANING OF THE WORD EDUCATION AS DE FINED IN SECTION 2(15) OF THE INCOME TAX ACT, 1961 BY LYING DOWN AS FOLLOWS: 'THE SENSE IN WHICH THE WORD 'EDUCATION HAS BEEN USED IN SECTION 2(15) IS THE SYSTEMATIC INSTRUCTION, SCHOOLING OR T RAINING GIVEN TO YOUNG IN PREPARATION FOR THE WORK OF LIFE. IT ALSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. THE WORD 'EDUCATION HAS NOT BEEN USED IN THAT WIDE AN D EXTENDED SENSE ACCORDING TO WHICH EVERY ACQUISITION OF FURTH ER KNOW/EDGE CONSTITUTES EDUCATION. SIMILARLY, GUJARAT HIGH COURT IN THE CASE OF SORABJ I NUSSERWANJI PAREKH 66 TAXMAN 411 HELD THAT THE ELEM ENT OF IMPARTING EDUCATION TO THE STUDENTS OR ELEMENT OF N ORMAL SCHOOLING WHERE THERE ARE TEACHERS AND TAUGHT MUST BE PRESENT AND AS TO FALL WITHIN THE MEANING OF EDUCATION. 6. THE ACTIVITY OF THE APPLICANT ON THE CONTRARY FA LLS IN THE LAST LIMB I.E. ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUB LIC UTILITY, IN THIS REGARD, A REFERENCE IS MADE TO THE DEFINITION OF 'C HARITABLE PURPOSE' AS GIVEN IN SECTION 2(15) OF THE INCOME TAX ACT, 19 61, WHICH READS AS UNDER: ITA NO. 6259/DEL/2013 9 2( 15)'CHARITABLE PURPOSE' INCLUDES RELIEF OF THE P OOR, EDUCATION, MEDICAL RELIEF, [PRESERVATION. OF ENVIRONMENT (INCL UDING WATERSHEDS, FOREST AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTEREST/ AND THE A DVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, I F IT INVOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE I N RELATION TO ANY TRADE, COMMERCE, OR BUSINESS FOR A CESS OR FEE OR A NY OTHER CONSIDERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY:] [PROVIDED FURTHER THAT THE FIRST PROVISO SHALL NOT APPLY IF THE AGGREGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES REFERRED TO THEREIN IS [TWENTY-FIVE LAKH RUPEES] OR LESS IN THE PREVIOU S YEAR;] 6.1 FROM THE DETAILS SUBMITTED BY THE ASSESSEE, IT IS CLEAR THAT APPLICANT IS IN FACT CONDUCTING FULL TIME AND PART TIME COURSES ON WELDING, CONDUCTING DISTANCE EDUCATION IN WELDING W ITH AFFILIATED UNIVERSITIES / INSTITUTIONS, EDUCATION, TRAINING AN D SKILL DEVELOPMENT OF THE WELDER, PUBLISHING WELDING JOURNAL, CONDUCTI NG SEMINAR, WORKSHOP SYMPOSIUM, CONFERENCE PANEL DISCUSSION OF EXPERTS, ETC. THE APPLICANT IS CHARGING FEES FOR THESE SERVICES. IT IS A CLEAR CASE OF SERVICE PROVIDER AND SERVICE SEEKER. THUS, THE ACTI VITIES OF THE APPLICANT ARE IN THE NATURE OF BUSINESS FOR WHICH F EES IS BEING CHARGED. BUSINESS NORMALLY HAS THE FOLLOWING INGRED IENTS: ITA NO. 6259/DEL/2013 10 (I) CONTINUANCE AND SYSTEMATIC ACTIVITY, (II) TRANSACTION BETWEEN TWO PERSONS, (III) ELEMENT OF RECIPROCITY; AND (IV) PROFIT MOTIVE. 6.2 NORMALLY, PROFIT MOTIVE TEST MUST BE SATISFIED, BUT IT IS NOT FINAL. IF THERE IS EVIDENCE AND MATERIAL TO SHOW THAT THE ACT IVITIES WERE CARRIED OUT ON SOUND AND RECOGNIZED BUSINESS PRINCI PLES AND PURSUED WITH REASONABLE CONTINUITY, IT WOULD CONSTI TUTE BUSINESS, EVEN IF THERE IS NO PROFIT MOTIVE. IN THE CASE OF P . KRISHNAMANON (356 ITR 48), THE APEX COURT HAS HELD THAT IT IS NOT MOT IVE OF THE PERSON DOING AN ACT, WHICH DECIDES WHETHER THE ACT DONE BY HIM IS THE CARRYING ON OF BUSINESS, PROFESSION OR VOCATION. IF IT WERE NOT SO, A PERSON CARRYING ON WHAT OTHERWISE WOULD BE A BUSINE SS MAY SAY THAT HE DID NOT CARRYING ON BUSINESS BECAUSE IT WAS NOT HIS INTENTION TO MAKE ANY INCOME OUT OF IT. THE SUPREME COURT FOL LOWED THE 1888 BRITISH DECISION IN THE CASE OF INCORPORATED COUNCI L OF LAW (3 TAX - CAS 105) WHEREIN IT WAS HELD THAT IT WAS NOT ESSENT IAL TO CARRYING ON OF TRADE THAT THE PEOPLE CARRYING IT ON SHOULD MAKE PROFIT NOR IS IT NECESSARY THAT THE PEOPLE CARRYING IT ON SHOULD DES IRE OR WISH TO MAKE A PROFIT. IN THE CASE OF CUSTOMS AND EXCISE CO MMISSIONER VS. LORD FISSUR (1981 STC 238), IT WAS HELD THAT LACK O F PURSUIT OF PROFIT OR EARNING DID NOT PREVENT AN ACTIVITY FROM BEING A BU SINESS IF IF IN ANY OTHER RESPECT IT PLAINLY WAS. ITA NO. 6259/DEL/2013 11 6.3 KEEPING IN VIEW THE FACTS OF THE CASE, THE A CTIVITY BEING CARRIED OUT BY THE APPLICANT IS HELD TO BE IN THE N ATURE OF 'BUSINESS' AS THE APPLICANT. 6.4 THUS, IT IS HELD THAT THE ACTIVITIES OF .THE A PPLICANT FALL UNDER THE CATEGORY OF GPU AND ARE IN THE NATURE OF BUSINESS. THE RECEIPTS OF THE APPLICANT FOR THE PERIOD ENDING AS ON 31/03/201 3 ARE RS. 56,08,255/-, THE BREAK-UP OF WHICH IS (I) STRUCTURE D COURSE SUBSCRIPTION OF RS. 10,71,085/-; (II) SEMINAR AND D ELEGATE / PARTICIPATION SUBSCRIPTION AT RS. 907205/-; (III) S UPPORTS / SPONSORSHIP RS. 22,24,300/-; AND (IV) SHARE INCOME FROM COLLABORATION AT RS. 5,95,665/-. THUS, THE APPLICAN T'S CASE CLEARLY COMES UNDER THE PROVISO TO SE~ OF THE INCOME TAX AC T, 1961 AND THE APPLICANT IS NOT ELIGIBLE FOR REGISTRATION U/S. 12 OF THE ACT. AS ITS GROSS RECEIPTS ARE MORE THAN THE INCOME AS STIPULAT ED IN 2 ND PROVISO TO SECTION 2(15), THE APPLICANT'S APPLICANT FOR REG ISTRATION U/S. 12A LIABLE TO BE REJECTED. 7. IN VIEW OF THE ABOVE FACTS, APPLICATION FILED FO R GRANT OF REGISTRATION U/S. 12A OF THE INCOME TAX ACT, 1961 I S HEREBY REJECTED AS DISCUSSED IN DETAIL IN PARA 6 ABOVE. 4. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 5. DURING THE HEARING, LD. COUNSEL OF THE ASSESSEE FILED A PAPER BOOK CONTAINING PAGES 1 TO 114 HAVING THE COPY OF MEMO RANDUM OF ASSOCIATION; COPY OF RULES AND REGULATIONS; COPY OF CERTIFICATE OF REGISTRATION UNDER SOCIETIES REGISTRATION ACT XXX OF 1860; COPY OF RE GISTRATION APPLICATION U/S. 12AA OF THE I.T. ACT DATED 25.3.2013 ON FORM 10A; COPY OF WRITTEN SUBMISSION ITA NO. 6259/DEL/2013 12 DATED 6.6.2013 FILED BEFORE THE DIT(E) ON THE ROLE AND ACTIVITY OF INDIAN WELDING SOCIETY AND PROCEDURE FOR CERTIFICATION OF SKILLED WELDERS BEFORE DIT(E); COPY OF WRITTEN SUBMISSION DATED 11.7.2013 FILED BEFORE THE DIT(E); COPY OF THE WRITTEN SUBMISSION DATED 19.7.2013 FILED BEFORE THE DIT(E); COPY OF WRITTEN SUBMISSION DATED 25..2013 FILED BEFORE DIT(E) AND THE COPIES OF THE FINANCIAL STATEMENTS FOR THE ASSESSMENT YEARS 2011-12; 2012-1 3 AND 2013-14. HE RELIED UPON THE ALL THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. DIT(E) AND STATED THAT THE APPLICANT IS A REGISTERED SOCIETY TO PROMOTE THE A DVANCEMENT OF KNOWLEDGE AND PROVIDE EDUCATION IN THE FIELD OF WELDING, CUTTING AND HARD FACING, RELATED TECHNOLOGIES AND ALLIED SCIENCES. IT FACILITIES EXC HANGE OF IDEAS, INFORMATION, AND KNOWLEDGE AMONG MEMBERS BY ORGANIZING LECTURES, WOR KSHOPS, SEMINARS, SYMPOSIA, CONFERENCES AND DEVELOPMENT PROGRAMS, PUB LISHING PERIODICALS, BOOKS, JOURNALS AND MAGAZINES AND TO DEVELOP SOFTWA RE AND EDUCATIONAL PROGRAMS VIDEO FILES AND TRAINING PACKAGES AS PER T HE OBJECTIVE OF THE SOCIETY. THE SOCIETY IS ENGAGED IN ACADEMIC EDUCATION & TRAI NING IN WELDING AND PROVIDES CONTINUOUS EDUCATION AND UP-GRADATION OF K NOWLEDGE IN THE SPECIALIZED TECHNICAL FIELD THROUGH LECTURES, CLASS ROOM TRAINING, DISTANCE LEARNING PROGRAMMES, DISCUSSIONS, SEMINARS AND FIEL D TRIPS ETC. FOR ALL SECTIONS OF SOCIETY. IT WAS FURTHER SUBMITTED BY HIM THAT LD DI T(E) WHILE ADMITTING THE FACT THAT THE SOCIETY DOES ENGAGE IN EDUCATIONAL ACTIVITY HAS ALSO STATED THAT IT IS ENGAGED IN SKILL ENHANCEMENT ACTIVITY AND THEREFORE NOT CON SIDERED TO BE IMPARTING EDUCATION. SHE HAS REJECTED THE APPLICATION BASED O N WRONG PRESUMPTIONS AND CONTRADICTION IN OWN ARGUMENTS AND WRONGLY INFERRED THE ACTIVITY TO BE GENERAL PUBLIC UTILITY (GPU) AND IS THEREFORE THE ORDER IS BAD BOTH ON FACTS AND IN LAW. IT WAS FURTHER SUBMITTED THAT THE LD DIT(E) HAS ADMITT ED THE FACT THAT THE ACTIVITIES OF THE APPELLANT INTENDS TO UPGRADE THE SKILLS OF THE INTERESTED PEOPLE IN TRADE AND STUDENTS IN THE FIELD OF WELDING FOR WHICH IT IS RU NNING REGULAR COURSES, DISTANCE ITA NO. 6259/DEL/2013 13 LEARNING COURSES AND ENTERED INTO MOU WITH VARIOUS UNIVERSITIES. THE LD DIT(E) HAS DRAWN INFERENCE FROM THE FACT THAT A CERTAIN FE E IS CHARGED FOR SUCH ACTIVITY WHICH IS IN THE NATURE OF BUSINESS AND THEREFORE DO ES NOT MERIT STATUS OF CHARITABLE ACTIVITY. THE CONCLUSION DRAWN BY THE LD DIT(E) IS ENTIRELY MISPLACED, INCORRECT AND NOT BASED ON COMPLETE FACTS OF THE CASE AND IS BAD IN LAW. HE FURTHER STATED THAT THE SOCIETY DOES NOT WORK FOR ANY GAINS OR PRO FITS OF ITS MEMBERS OR ANY SPECIFIC CLASS OF PEOPLE. HE FURTHER STATED THAT T HE LD. DIT(E) WAS NOT JUSTIFIED IN REJECTING THE APPLICATION FOR REGISTRATION U/S. 12A OF THE I.T. ACT, 1961 VIDE ORDER PASSED U/S. 12AA(1)(B) OF THE I.T. ACT, 1961, WITHO UT UNDERSTANDING THE FACTS AND DETAILS SUBMITTED. TO SUPPORT THIS CONTENTION, HE RELIED UPON HONBLE SUPREME COURT JUDGMENT IN THE CASE OF SOLE TRUSTEE LOKA SHI KSHANA TRUST 101 ITR 234. IN VIEW OF ABOVE, HE REQUESTED THAT ORDER OF THE LD. D IT(E) MAY BE SET ASIDE AND APPLICANT MAY BE GRANTED REGISTRATION U/S. 12A OF T HE I.T. ACT. 6. LD. DR RELIED UPON THE ORDER OF THE LD. DIT(E) AND STATED THAT THE ACTIVITIES OF THE APPLICANT RUNNING SKILLED ENHANCEMENT COURS E CANNOT BE CONSIDERED AS IMPARTING EDUCATION, IN VIEW OF THE DECISION OF T HE HONBLE SUPREME COURT OF INDIA IN THE CASE OF SOLE TRUSTEE, LOKA SHISHANA TR UST 101 ITR 234 (SC). HE FURTHER STATED THAT THE LD. DIT(E) HAS PASSED A WELL REASO NED ORDER ON THE BASIS OF THE RELEVANT PROVISIONS OF LAW AS WELL AS BY CITING VAR IOUS CASE LAWS MENTIONED IN THE IMPUGNED ORDER. HE RELIED UPON THE IMPUGNED ORDER A ND REQUESTED THAT THE APPEAL OF THE APPLICANT MAY BE DISMISSED BY UPHOLDI NG THE IMPUGNED ORDER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS SPECIALLY THE ORDER OF THE LD. DIT(E), WRITTEN SUB MISSION FILED BY THE APPLICANT AND THE CASE LAWS CITED THEREIN. WE FIND THAT THE A PPLICANT HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 114 AND FILED THE WRITTE N SUBMISSIONS DATED 06.6.2013, 11.7.2013, 19.7.2013 AND 25.9.2013 BEFOR E THE LD. DIT(E), WHICH HE ITA NO. 6259/DEL/2013 14 RELIED AND REITERATED BEFORE THE TRIBUNAL DURING TH E HEARING. IN OUR VIEW, THERE IS A NEED TO DISCUSS THE MEMORANDUM OF ASSOCIATION IN WHICH THE AIMS AND OBJECTS OF THE SOCIETY ARE MENTIONED. THE FOLLOWING ARE THE AIMS AND OBJECTS OF THE SOCIETY:- I. TO PROMOTE THE ADVANCEMENT OF WELDING, CUTTING, RECLAMATION, HARD FACING AND RELATED TECHNOLOGIES A ND OTHER ALLIED SCIENCES WHICH THE SOCIETY MAY DECIDE FROM T IME TO TIME. II. TO FACILITATE EXCHANGE OF IDEAS, INFORMATION, DEVEL OPMENT WORK ETC. AMONGST MEMBERS; BY ORGANISING LECTURES, WORKSHOPS, SEMINARS, SYMPOSIA, CONFERENCES AND DEVELOPMENT PROGRAMS; PUBLISH PERIODICALS, BOOKS, J OURNALS, AND MAGAZINES; AND DEVELOP SOFTWARE AND EDUCATIONAL PROGRAMS, VIDEO FILMS AND TRAINING PACKAGES RELATIN G TO THE OBJECTIVES OF THE SOCIETY. III. TO OFFER FLEXIBLE CLASS ROOM/DISTANCE LEARNING PROG RAMS IN VARIOUS ASPECTS OF WELDING & RELATED TECHNOLOGY THA T SUIT THE REQUIREMENT OF VARIOUS LEVELS. IV. TO PROMOTE PROFESSIONAL EXCHANGE OF INFORMATION, EX PERIENCE AND ADVANCED TRAINING WITHIN AND AMONG VARIOUS COUN TRIES ACROSS THE GLOBE. V. TO ENTER INTO ARRANGEMENTS FOR PROVIDING MEMBERS OF THE SOCIETY WITH ADVICE AND ASSISTANCE ON ALL MATTERS C ONNECTED WITH THE OBJECTS COVERED BY THIS MEMORANDUM. VI. TO ADMIT ANY PERSON(S) TO BE HONORARY MEMBER(S) OF THE SOCIETY ON SUCH TERMS, AND TO CONFER ON THEM SUCH R IGHTS AND PRIVILEGES, AS MAY SEEM EXPEDIENT. VII. TO APPROACH, NEGOTIATE, CONFER WITH AND/OR ACT IN A NY ADVISORY CAPACITY GOVERNMENT, MUNICIPAL AND LOCAL AUTHORITIES, AND VARIOUS ECONOMIC SEGMENTS/INDUSTRI ES WITH RESPECT TO THE OBJECTS COVERED BY THIS MEMORANDUM W ITH A ITA NO. 6259/DEL/2013 15 VIEW TO OFFER CONSULTANCY / ADVICE TO INDUSTRY AND OTHER SEGMENTS OF THE COUNTRY'S ECONOMY. VIII. TO GIVE AWARDS, SCHOLARSHIPS, FELLOWSHIPS, AND GRAN TS TO INDIVIDUALS/TEAMS OF PROFESSIONALS AND ORGANISATION S IN REGARD TO SPECIFIC PROJECTS IN VARIOUS SPHERES OF W ELDING & RELATED TECHNOLOGY DIRECTLY OR IN ASSOCIATION WITH OTHER PROFESSIONAL ORGANISATIONS HAVING SIMILAR OBJECTIVE S. IX. TO AMALGAMATE WITH, AFFILIATE TO, BECOME A MEMBER O F, TO SUBSCRIBE TO, AND TO COMMUNICATE AND CO-OPERATE WIT H ANY OTHER SCIENTIFIC SOCIETY / COMPANY AND OTHER CONCER NED BODIES AND PROMOTE MEASURES FOR THE FURTHERANCE OF MUTUAL OBJECTS AND TO PROMOTE ANY COMPANY OR ASSOCIATION O R SOCIETY OR INSTITUTION FOR THE PURPOSE OF ACQUIRING ALL OR ANY OF THE PROPERTY, RIGHTS AND LIABILITIES OF THIS SOC IETY, OR FOR ANY OTHER PURPOSE WHICH MAY BE DIRECTLY OR INDIRECT LY CALCULATED TO BENEFIT THIS SOCIETY OR TO CARRY OUT ITS OBJECTS OR ANY ONE OF THEM. X. TO MAKE SUCH RULES, REGULATIONS AND BYE-LAWS AS MAY FROM TIME TO TIME BE NECESSARY FOR CARRYING OUT THE ABOV E OBJECTS OR OTHERWISE. XI. TO PROMOTE ANY OTHER ACTIVITY INCIDENTAL TO THE ABO VE OBJECTS BUT NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY F OR PROFIT AS THE GOVERNING COUNSEL FROM TIME TO TIME DETERMINE. XII. THE OBJECTS OF THE SOCIETY EXTEND TO ALL STATES AND UNION TERRITORIES IN INDIA; AND FOR THE PURPOSE OF THE AB OVE OBJECTS: A) ESTABLISH, MAINTAIN, CONTROL AND MANAGE CHAPTERS / BRANCHES OF THE SOCIETY IN INDIAN AND ELSEWHERE, AN D TO DETERMINE THE CONSTITUTION, RIGHTS, PRIVILEGES, OBLIGATIONS AND DUTIES OF SUCH CHAPTERS / BRANCHES AND WHEN THOUGHT FIT TO MODIFY OR DISSOLVE THE SAME. B) ENROLL MEMBERS AND COLLECT FUNDS BY WAY OF ANNUA L / ONE TIME SUBSCRIPTIONS; DONATIONS OR OTHERWISE FRO M SCIENTIFIC, INDUSTRIAL AND OTHER ORGANIZATIONS, COR PORATE HOUSES, FIRMS AND SOCIETIES, INDIVIDUAL SCIENTISTS, ITA NO. 6259/DEL/2013 16 TECHNOLOGISTS, INDUSTRIALISTS OR ANY OTHER PERSON(S ) FOR THE PURPOSES OF THE SOCIETY. C) PRINT AND PUBLISH ANY PAMPHLETS / JOURNALS OR OT HER LITERATURE CONSIDERED DESIRABLE FOR THE PROMOTION O F THE OBJECTS OF THE SOCIETY. D) ADMINISTER THE FUNDS AND UTILIZE THE INCOME AND ASSETS OF THE SAID FUND FOR THE PURPOSES OF THE SOCIETY AN D INVEST AND DEAL WITH THE MONEY OF THE SOCIETY NOT IMMEDIATELY REQUIRED UPON SUCH SECURITY OR SECURITI ES AND IN SUCH MANNER AS MAY FROM TIME TO TIME BE DETERMINED BY THE GOVERNING COUNCIL FOR THE SOCIETY AND ITS CHAPTERS/ BRANCHES. E) DRAW, MAKE, ACCEPT, ENDORSE AND DISCOUNT CHEQUES , NOTES AND OTHER NEGOTIABLE INSTRUMENTS ON BEHALF OF AND FOR THE PURPOSES OF THE SOCIETY. F) ACQUIRE BY PURCHASE, LEASE OR OTHERWISE LAND AND BUILDINGS AND ANY OTHER PROPERTY REAL OR PERSONAL, AND DISPOSE OFF SUCH PROPERTY OR ANY RIGHTS AND PRIVILE GES WHICH THE SOCIETY FOR THE PURPOSES THEREOF MAY FRO M TIME TO TIME THINK PROPER TO ACQUIRE OR DISPOSE IN THE INTEREST AND OBJECTS OF THE SOCIETY. G) PAY OUT OF THE FUNDS OF THE SOCIETY OR ANY PARTI CULAR PART OF SUCH FUNDS ALL EXPENSES OR INCIDENTAL TO TH E FORMATION OF THE SOCIETY AND MANAGEMENT AND ADMINISTRATION OF ANY OF THE FOREGOING OBJECTS. H) ESTABLISH FOR THE PURPOSE AFORESAID, NO OFFICE A T DELHI AND ENGAGE SUCH STAFF AS MAY BE NECESSARY. I) TO SIGN, EXECUTE, AND DELIVER FOR THE PURPOSE AFORESAID, SUCH ASSURANCES AND DEEDS AS MAY BE NECESSARY. J) DO ALL SUCH LAWFUL ACTS, DEEDS OR THINGS AS ARE INCIDENTAL OR CONDUCIVE TO ATTAINMENT OF THE OBJECT S. ITA NO. 6259/DEL/2013 17 7.1 WE ALSO REPRODUCE THE RELEVANT PORTION OF THE R ULES & REGULATIONS OF THE SOCIETY RELATING TO SOURCE OF INCOME AND UTILIZATIO N OF FUNDS. I) THE MAIN SOURCES OF INCOME OF THE SOCIETY WILL B E MEMBERSHIP FEE, DONATIONS, ROYALTIES, GOVERNMENT GRANTS, SAVINGS FROM CONFERENCES / WORKSHOPS, SEMINARS, COURSE FEES, SALE OF PUBLICATION ETC. II) THE INCOME AND PROPERTY OF THE SOCIETY, HOWEVER , DERIVED, SHALL BE APPLIED TOWARDS THE PROMOTION OF THE OBJECTS SUBJECT NEVERTHELESS IN RESPECT OF THE EXPENDITURES OF GRANTS OR DONATIONS MADE WITH ANY SPECIFIC CONDITIONS AS MAY BE IMPOSED FROM THE DONORS. NO PORTION OF THE INCOME AND PROPERTY OF THE SOCIETY SHALL BE PAID OR TRANSFERRED, DIRECTLY OR INDIRECTLY, BY WAY OF DIVIDENDS, BONUS OR OTHERWISE OR BY WAY OF PROFITS TO ANY PERSONS WHO AT ANY TIME A RE OR HAVE BEEN MEMBERS OF THE SOCIETY OR TO ANY OF TH EM OR TO ANY PERSONS CLAIMING THROUGH THEM OR ANY OF T HEM PROVIDED THAT NOTHING HEREIN CONTAINED SHALL PREVEN T THE PAYMENT IN GOOD FAITH OF REMUNERATION TO ANY MEMBERS OR OTHER PERSONS IN RETURN FOR ANY SERVICES RENDERED TO THE INSTITUTE, AS PER THE DIRECTIONS G IVEN BY THE GENERAL BODY OF THE SOCIETY. 7.2 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS, WE FIND THAT THE ASSESSEE SOCIETY IS ENGAGED IN EDUCATION AND TRAINING THROUG H COURSES, PROGRAMMES, SEMINARS SYMPOSIUMS. IT HAS ALSO AFFILIATED WITH U NIVERSITIES AND INTERNATIONAL ORGANIZATIONS TO CONDUCT ITS MANDATE. IT HOLDS PROG RAMS FOR SKILL DEVELOPMENT OF ITA NO. 6259/DEL/2013 18 THE POOR AND THE UNEMPLOYED UNDER THE GOVERNMENT PR OGRAMEMS UNDER VARIOUS STATE AND CENTRAL GOVERNMENT SCHEMES. IT ALSO COND UCTS KNOWLEDGE BASED PROGRAMMES FOR UPDATING THE INDUSTRY WITH INTERNATI ONAL TECHNOLOGY AND NEW MATERIALS ETC. IT REVEALS FROM THE RECORDS, THAT TH E APPLICANT SOCIETY IS ENGAGED IN THE FIELD OF TECHNICAL EDUCATION AND TRAINING TH ROUGH ITS ABOVE PROGRAMMES AND COURSES FOR A WIDE AREAS OF SOCIETY. THE SOCIE TY PLAYS AN IMMENSE ROLE IN PROVIDING TECHNICAL EDUCATION AND ENRICHMENT OF KNO WLEDGE THROUGH ITS INTERACTIVE PROGRAMMES AND COURSES WITHOUT HAVING A NY COMMERCIAL OR PROFIT MOTIVE. IT IS MANAGED BY VERY EMINENT AND SENIOR OF FICIALS AND PERSONALITIES FROM INDUSTRY AND THE GOVERNMENT, WHO WORK AT HONORARY P OSITIONS AND PROVIDE THEIR SKILLS AND TIME TO THE PROGRAMMES OF THE SOCIETY. 7.3 ON GOING THROUGH THE PROVISIONAL INCOME EXPEN DITURE ACCOUNT FOR AY 2013-14, IT REVEALS THAT APPLICANT-SOCIETY HOLD STR UCTURED FOR CLASSROOM TEACHING FOR WELDERS, FRESH ENGINEERS ETC. ON VARIOUS WELDIN G RELATED SUBJECTS. CERTAIN FEES IS COLLECTED FROM THE PARTICIPANTS TO MEET THE EXPENSES UNDER THE HEAD. STRUCTURED COURSE SUBSCRIPTION. ANOTHER SOURCE OF R EVENUE IS FROM EDUCATIONAL SEMINARS, SYMPOSIUMS, WORKSHOP AND TRAINING ETC. D ELEGATE FEE IS CHARGED FROM THE ATTENDEES TO MEET THE COST OF FOOD, PRINTING MA TERIALS, VENUE RENT, HONORARIUMS TO SPEAKER'S AND TRAINERS ETC. THERE AR E PROGRAMMES WHICH ARE CONDUCTED FREE OR AT CONCESSIONAL AMOUNTS ALSO DEPE NDING ON THE TYPE OF PEOPLE ATTENDING THE EDUCATION PROGRAMMES. ANOTHER HEAD OF INCOME IS THROUGH ADVERTISEMENT AND SPONSORSHIP CONTRIBUTIONS RECEIV ED FROM ENTITIES WHO WISH TO PARTICIPATE IN THE PROGRAMMES. THESE ENTITIES DERIV E THE BENEFIT OF SHOWCASING THEMSELVES TO THE TRAINED PEOPLE THAT GO THROUGH TH E PROGRAMMES AND ALSO PROVIDING A WINDOW TO THE PEOPLE REGARDING THE LATE ST IN TECHNOLOGY AND THE LINKAGES IN THE FIELD OF WELDING BETWEEN THE PEOPLE , TECHNOLOGY AND EQUIPMENT. ITA NO. 6259/DEL/2013 19 7.4 WE FIND THAT THE MEANING OF 'CHARITABLE' PURPOS E' HAS BEEN DISCUSSED AT LENGTH BY VARIOUS COURTS. THE HON'BLE SUPREME COURT IN THE CASE OF 'SOLE TRUSTEE LOKA SHIKSHANA TRUST' 101 ITR 234 HAS HELD AS UNDER :- '.CHARITABLE PURPOSE' WHICH IS ONLY INDICATED BUT NOT DEFINED BY SECTION 2(15) OF THE ACT? IT IS TRUE THAT CHARITY DOES NOT NECESSARILY EXCLUDE CARRYING ON AN ACTIVITY WHICH YIELDS PROFIT, PROVIDED THAT P ROFIT HAS TO BE USED UP FOR WHAT IS RECOGNIZED AS CHARITY. THE VERY CONCEPT OF CHARITY DENOTES ALTRUISTIC THOUGH AND ACTION. ITS OBJECT MUST NECES SARILY BE TO BENEFIT OTHERS RATHER THAN ONES SELF. ITS ESSENCE IS SELFL ESSNESS. IN A TRULY CHARITABLE ACTIVITY ANY POSSIBLE BENEFIT TO THE PER SON WHO DOES THE CHARITABLE ACT IS MERELY INCIDENTAL OR EVEN ACCIDE NTAL AND IMMATERIAL. THE ACTION WHICH FLOWS FROM CHARITABLE THINKING IS NOT DIRECTED TOWARDS BENEFITING ONES SELF, IT IS ALWAYS DIRECTED AT BEN EFITING OTHERS. IT IS THIS DIRECTION OF THOUGH AND EFFORT AND NOT THE RESULT O F WHAT IS DONE, IN TERMS OF FINANCIALLY MEASURABLE GAIN, WHICH DETERMINES THAT IT IS CHARITABLE. THIS DIRECTION MUST BE EVIDENT AND OBLIGATORY UPON THE T RUSTEE FROM THE TERMS OF A DEED OF TRUST BEFORE IT CAN BE HELD TO BE REALLY CHARITABLE. 7.5 WE NOTE THAT THE OBJECTS OF THE SOCIETY AS PER ITS MEMORANDUM OF ASSOCIATION VIDE PARA 3 INTER-ALIA STATES THAT:- 3. AMIS AND OBEJCTS : THE AIMS AND OBJECTS OF TH E SOCIETY AT PARA 3 INTER-ALIA STATED AS UNDER:- TO PROMOTE THE ADVANCEMENT OF WELDING, CUTTING, RECLAMATION, HARD FACING AND RELATED TECHNOLOGIES AND OTHER ALLIED SCIENCES WHICH THE SOCIETY MAY DECIDE FROM TIME TO TIME. I. TO PROMOTE THE ADVANCEMENT OF WELDING, CUTTING, RECLAMATION, HARD FACING AND RELATED TECHNOLOGIES A ND ITA NO. 6259/DEL/2013 20 OTHER ALLIED SCIENCES WHICH THE SOCIETY MAY DECIDE FROM TIME TO TIME. II. TO FACILITATE EXCHANGE OF IDEAS, INFORMATION, DEVEL OPMENT WORK ETC. AMONGST MEMBERS; BY ORGANISING LECTURES, WORKSHOPS, SEMINARS, SYMPOSIA, CONFERENCES AND DEVELOPMENT PROGRAMS; PUBLISH PERIODICALS, BOOKS, JOURNALS, AND MAGAZINES; AND DEVELOP SOFTWARE AND EDUCATIONAL PROGRAMS, VIDEO FILMS AND TRAINING PACK AGES RELATING TO THE OBJECTIVES OF THE SOCIETY. III. TO OFFER FLEXIBLE CLASS ROOM/DISTANCE LEARNING PROG RAMS IN VARIOUS ASPECTS OF WELDING & RELATED TECHNOLOGY THA T SUIT THE REQUIREMENT OF VARIOUS LEVELS.. FROM THE ABOVE, IT IS ESTABLISHED THAT THE SOCIETY IS CARRYING OUT THE ACTIVITIES FOR THE BENEFIT OF THE PUBLIC AT LA RGE, IN AS MUCH AS ANY PERSON DESIROUS OF ENHANCING HIS KNOWLEDGE AND T RAINING IN THE FIELD OF WELDING MAY PARTICIPATE IN THE PROGRAMMES, CLASSES , ETC. HELD BY THE SOCIETY. TO FURTHER CLASSIFY THE ACTIVITY, IT IS A PPARENT THAT THE ACTIVITY OF THE SOCIETY IS CLASSIFIED AS IMPARTING EDUCATION. THE HONBLE SUPREME COURT HAS FURTHER HELD IN THE CASE OF 'SOLE TRUSTEE LOKA SHIKSHANA TRUST' 101 ITR 234 AS UNDER:- 'THE SENSE IN WHICH THE WORD 'EDUCATION' HAS BEEN U SED IN SECTION 2(15) IS THE SYSTEMATIC INSTRUCTION, SCHOOL ING OR TRAINING GIVEN TO THE YOUNG IS PREPARATION FOR THE WORK OF L IFE. IT ALSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. THE WORD EDUCATION HAS NOT B EEN USED IN THAT WIDE AND EXTENDED SENSE, ACCORDING TO WHICH EVERY ACQUISITION OF FURTHER KNOWLEDGE CONSTITUTES EDUCATION. ITA NO. 6259/DEL/2013 21 WHAT EDUCATION CONNOTES IN THAT CLAUSE IS THE PROC ESS OF TRAINING AND DEVELOPING THE KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENTS BY NORMAL SCHOOLING. ON GOING THROUGH THE AFORESAID CONTENTS OF THE J UDGMENT, IT IS CRYSTAL CLEAR THAT THE APPLICANT-SOCIETY IS ACTIVEL Y ENGAGED IN THE ABOVE ACTIVITY THROUGH ITS SYSTEMATIC CLASS ROOM / DISTA NCE LEARNING PROGRAMMES SYMPOSIUMS, SEMINARS ETC. HOWEVER, IT ALSO MAINTAI NS LINKAGES WITH UNIVERSITIES AND OTHER EDUCATIONAL INSTITUTIONS TO COLLABORATE IN IMPARTING EDUCATION ON THE SPECIALIZED SUBJECT RELATE TO WELD ING AND ISSUE CERTIFICATES TO CANDIDATES FOR COMPLETION OF THE CO URSE. AFTER PERUSING THE COPIES OF THE AGREEMENT WITH VARIOUS RECOGNIZED UNI VERSITIES SUCH AS ANNAMALAI UNIVERSITY FOR DISTANCE LEARNING PROGRAM MES, SRI RAMA KRISHNA TIRUCHIRAPPALLI FOR DIPLOMA IN FABRICATION ENGINEERING FOR UNDERGRADUATES SCIENCE STUDENTS IT WAS FOUND THAT T HAT NO FEES IS CHARGED FROM THE STUDENTS AND ALMOST 160 STUDENTS HAVE BEEN TRAINED SO FAR, VIT UNIVERSITY VELLORE ETC. THROUGH STRUCTURED AND WELL DEFINED COURSES. THIS SOCIETY DOES NOT WORK FOR ANY GAINS OR PROFITS OF ITS MEMBERS OR ANY SPECIFIC CLASS OF PEOPLE. THE ACTIVITIES CARRIED FOR THE BENEFIT OF THE PUBLIC AT LARGE AND REACHES OUT TO THE WEAKEST SECTION O F THE SOCIETY IN SKILL AND CAPACITY BUILDING OF THE YOUTH IN THE UNORGANIZED S ECTOR. ITA NO. 6259/DEL/2013 22 7.6 IT IS PERTINENT TO MENTION HERE THAT THE LD. DI T(E) IN THE IMPUGNED ORDER HAS SPECIFICALLY MENTIONED THAT THE IT IS CLEAR THAT AP PLICANT IS IN FACT CONDUCTING FULL TIME AND PART TIME COURSES ON WELDING, CONDUCTING D ISTANCE EDUCATION IN WELDING WITH AFFILIATED UNIVERSITIES/ INSTITUTIONS, EDUCATION, TRAINING AND SKILL DEVELOPMENT OF THE WELDER, PUBLISHING WELDING JOURN AL, CONDUCTING SEMINAR, WORKSHOP SYMPOSIUM, CONFERENCE PANEL DISCUSSIONS OF EXPERTS. ETC. 7.7 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENT, IT IS ESTABLISHED THAT THE APPLICANT-SOCIETYS MAIN ACTI VITY IS TO PROVIDE EDUCATION IN THE FIELD OF WELDING WHICH FULLY COMPLIES TO THE CH ARITABLE PURPOSES AS PER SECTION 2(15) OF THE INCOME TAX ACT, 1961, BECAUSE POOR AN D INDIGENT PEOPLE ARE ALLOWED TO PARTICIPATE IN THE COURSE, TRAINING PROG RAMMES FREE OF COST FOR ACQUIRING THE SKILL AND GETTING THE EMPLOYMENT INDI RECTLY IMPROVING THEIR LIVING STANDARD; THE SCHOOL DROP OUTS AND YOUTH OR RURAL A REA BELOW POVERTY LINE GET FREE TRAINING IN WELDING TO BRING THEM IN THE MAIN STREAM OF THEIR LIFE; SPECIAL PROGRAMME FOR DISADVANTAGED WOMEN FOR THEIR OWN LIV ELIHOOD FOR WELDER TRAINING. AS PER THE RULES & REGULATIONS OF THE S OCIETY THE MAIN SOURCE OF THE SOCIETY IS MEMBERSHIP FEE, DONATIONS, ROYALTIES, GO VERNMENT GRANTS, SAVINGS FROM CONFERENCES, WORKSHOPS, SEMINAR COURSE FEES AND SAL E OF PUBLICATION ETC. THE INCOME AND PROPERTY OF THE SOCIETY, HOWEVER, DERIVE D, SHALL BE APPLIED TOWARDS THE PROMOTION OF THE OBJECTS SUBJECT NEVERTHELESS I N RESPECT OF THE EXPENDITURES OF GRANTS OR DONATIONS MADE WITH ANY SPECIFIC CONDITIO NS AS MAY BE IMPOSED FROM THE DONORS. NO PORTION OF THE INCOME AND PROPERTY OF THE SOCIETY SHALL BE PAID OR TRANSFERRED, DIRECTLY OR INDIRECTLY, BY WAY OF D IVIDENDS, BONUS OR OTHERWISE OR BY WAY OF PROFITS TO ANY PERSONS WHO AT ANY TIME A RE OR HAVE BEEN MEMBERS OF THE SOCIETY OR TO ANY OF THEM OR TO ANY PERSONS CLA IMING THROUGH THEM OR ANY OF THEM PROVIDED THAT NOTHING HEREIN CONTAINED SHALL P REVENT THE PAYMENT IN GOOD FAITH OF REMUNERATION TO ANY MEMBERS OR OTHER PERS ONS IN RETURN FOR ANY SERVICES ITA NO. 6259/DEL/2013 23 RENDERED TO THE INSTITUTE. IN OUR OPINION, THE SOCI ETY IS DOING ITS ACTIVITIES AS PER ITS AIMS AND OBJECTIVES AND WORKING FOR A GOOD CAUSE AN D NOT EARNING ANY PROFIT. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES AS E XPLAINED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER PASSED BY THE LD. DIRECTOR OF INCOME TAX (EXEMPTION) DATED 30.9.2013 DESERVE TO B E CANCELLED AND ACCORDINGLY, WE CANCEL THE SAME WITH THE DIRECTION S TO THE LD. DIRECTOR OF INCOME TAX (EXEMPTION), NEW DELHI TO GRANT THE REGI STRATION U/S. 12A OF THE INCOME TAX ACT, 1961 TO THE APPLICANT FORTHWITH. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/04/2016 SD/- SD/- [ [[ [PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI] ]] ] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 27/04/2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES