By TIOL News Service

NEW DELHI, AUG 08, 2017: THE ISSUE BEFORE THE COURT IS - Whether mere receiving of service charges from various organizations for conducting safety management programmes, would convert an essential function of a charitable society to that of a business. NO is the verdict.

Facts of the case:

The Revenue preferred the present appeal challenging the order, whereby the Tribunal had directed the DIT(E) to grant registration to the Assessee society u/s 12AA as well as deduction u/s 80G of Income Tax Act.

On appeal, the HC held that,

++ it is seen that the ITAT has observed, as a matter of fact, that the genuineness of the activities of Assessee stood established and that the ingredients of Section 12AA stood satisfied. This finding has not been shown to be perverse by the Revenue. It is in fact found by the DIT (E) that the activities carried on by the Assessee did fall under the last limb of Section 2(15) of the Act, that is, for advancement of any other object of general public utility. The mere fact that the Assessee had received service charges from the various organizations for conducting programmes would not convert its essential function to that of a business and this is what has also weighed with the ITAT to finally accept the case of the Assessee. Consequently, the ITAT had rightly directed the DIT (E) to grant registration to the Assessee u/s 12AA and exemption u/s 80G of the Act.

(See 2017-TIOL-1501-HC-DEL-IT)