Sukhmani Society for Citizen Services v. CIT

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The Tax PublishersI. T. A. No. 297/Asr/2012 2013 TaxPub(DT) 1998 (Asr-Trib) : (2013) 024 ITR (Trib) 0458 Income Tax Act, 1961 --Charitable trust--Registration under section 12A Charitable purpose --Assessee-society was engaged in providing services to public to facilitate them in obtaining different kinds of licences, permission and registration like birth, death, marriage certificates, driving licences, ration cards, etc. The fee was fixed by regulatory authority of Government of Punjab. Assessee sought registration under section 12A as society was involved in advancement of an object of general public utility Commissioner held that in view of amendment made in section 2(15) with effect from 1-4-2009 activity of trade, business or commerce ceased to be a charitable purpose and as such considered registration of assessees, as society was giving services by charging huge fees, and thus it became an activity in the nature of a business and as per amended definition of section 2(15), the activity of assessee no longer fell under section 2(15). Therefore, he refused to grant registration. *Held:* Justified. As assessee was charging fee, from public, in addition to State Government and only mentioning of charitable objects in memorandum of association would not qualify assessee a charitable purpose and also qualify for registration. Denial of registration by Commissioner was, therefore, justified. In the present case, the Commissioner is fully satisfied that keeping in view the amendment of section 2(15) which has taken place with effect from 1-4-2009 as per which, an object of general public utility which involves carrying on of an 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, irrespective of the nature of use or application, or retention, of the income from such activity has ceased to be a charitable purpose. The Commissioner held that the society is giving services to the general public by charging fees and thus it becomes an activity in the nature of a business and hence by virtue of this amendment, the activity no longer falls in the ambit of the definition of section 2(15). Therefore, he refused to grant registration to the assessee-society. [Para 18] Object of the assessee-society which clearly mentions that the assessee society is charging service fee or user chargers from the customers for the approval of the competent authority and the concerned departments/organisations over and above the prescribed bill amount/fee/statutory fee for providing the services through Sukhmani Centres/financial institutions or franchisees. [Para 19] Society has been established for maintaining the agencies and franchisees in the district to conduct business of the society, which clearly establishes that the present society is doing business with other agencies and franchisees in the district. Tribunal has not seen any object of the society which shows that the present society is doing any charitable activities for the general public utility. Even otherwise, the assessee-society has failed to establish before the Commissioner, as well as before this Tribunal that the assessee-society is doing any charitable work keeping in view its object. Merely mentioning about various objects in the nature of charitable activities in the memorandum of association, does not mean that the society is doing any charitable activities as general public utility and is entitled for registration under section 12A(a). [Para 20] Activities of the assessee-society are not charitable in nature within the meaning of provisions of section 2(15) and it does not qualify to be treated as charitable institution. Since the assessee has not established that its society is formed with objects of any charitable purpose. The present society is doing its business and charging huge fees from the public which is in addition to the prescribed fee of the Punjab Government. Even otherwise, the fees charged by the present society are in addition to the burden forced upon the common man. Because of this, service has to be rendered by the Punjab Government free of cost to the public against the fee prescribed in the chart no interference is called for in the well reasoned order passed by the Commissioner. Therefore, the impugned order is upheld by dismissing the present appeal filed by the assessee-society. [Para 21] SUBSCRIBE FOR FULL CONTENT

The Tax PublishersI. T. A. No. 297/Asr/2012
2013 TaxPub(DT) 1998 (Asr-Trib) : (2013) 024 ITR (Trib) 0458

Income Tax Act, 1961

--Charitable trust--Registration under section 12A Charitable purpose --Assessee-society was engaged in providing services to public to facilitate them in obtaining different kinds of licences, permission and registration like birth, death, marriage certificates, driving licences, ration cards, etc. The fee was fixed by regulatory authority of Government of Punjab. Assessee sought registration under section 12A as society was involved in advancement of an object of general public utility Commissioner held that in view of amendment made in section 2(15) with effect from 1-4-2009 activity of trade, business or commerce ceased to be a charitable purpose and as such considered registration of assessees, as society was giving services by charging huge fees, and thus it became an activity in the nature of a business and as per amended definition of section 2(15), the activity of assessee no longer fell under section 2(15). Therefore, he refused to grant registration. Held: Justified. As assessee was charging fee, from public, in addition to State Government and only mentioning of charitable objects in memorandum of association would not qualify assessee a charitable purpose and also qualify for registration. Denial of registration by Commissioner was, therefore, justified.

In the present case, the Commissioner is fully satisfied that keeping in view the amendment of section 2(15) which has taken place with effect from 1-4-2009 as per which, an object of general public utility which involves carrying on of an 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, irrespective of the nature of use or application, or retention, of the income from such activity has ceased to be a charitable purpose. The Commissioner held that the society is giving services to the general public by charging fees and thus it becomes an activity in the nature of a business and hence by virtue of this amendment, the activity no longer falls in the ambit of the definition of section 2(15). Therefore, he refused to grant registration to the assessee-society. [Para 18] Object of the assessee-society which clearly mentions that the assessee society is charging service fee or user chargers from the customers for the approval of the competent authority and the concerned departments/organisations over and above the prescribed bill amount/fee/statutory fee for providing the services through Sukhmani Centres/financial institutions or franchisees. [Para 19] Society has been established for maintaining the agencies and franchisees in the district to conduct business of the society, which clearly establishes that the present society is doing business with other agencies and franchisees in the district. Tribunal has not seen any object of the society which shows that the present society is doing any charitable activities for the general public utility. Even otherwise, the assessee-society has failed to establish before the Commissioner, as well as before this Tribunal that the assessee-society is doing any charitable work keeping in view its object. Merely mentioning about various objects in the nature of charitable activities in the memorandum of association, does not mean that the society is doing any charitable activities as general public utility and is entitled for registration under section 12A(a). [Para 20] Activities of the assessee-society are not charitable in nature within the meaning of provisions of section 2(15) and it does not qualify to be treated as charitable institution. Since the assessee has not established that its society is formed with objects of any charitable purpose. The present society is doing its business and charging huge fees from the public which is in addition to the prescribed fee of the Punjab Government. Even otherwise, the fees charged by the present society are in addition to the burden forced upon the common man. Because of this, service has to be rendered by the Punjab Government free of cost to the public against the fee prescribed in the chart no interference is called for in the well reasoned order passed by the Commissioner. Therefore, the impugned order is upheld by dismissing the present appeal filed by the assessee-society. [Para 21]