INCOME TAX ACT, 1961

Section 12AA(3) Section 2(15), Proviso

Charitable trust - Applicability of proviso to section 2(15) - Purchase and sale of milk and ghee, etc., by assessee-trust having primary object of providing shelter to cows -

Assessee trust was formed with the object of providing an asylum/shelter to old sick, maimed, and stray cows. It was maintaining 11 Gaushalas and14 Famine Relief Centres, particularly for providing the shelter to the cows. AO treated activity of purchase and sale of milk, ghee, cattle ceed, etc., is in the nature of trade, commerce or business as provided in proviso to section 2(15) and accordingly, withdrew registration under section 12AA(3). Held: The sole object and purpose of purchase and sell of milk, milk products and cattle feed was to provide financial help to persons in occupation of animal husbandry and particularly selling of milk. There was no allegation that assessee was carrying out these activities with sole motive of earning profit, rather assessee had brought on record details to show that assessee was not earning any profit but only charging some commission to facilitate better service, price and good products to needy persons and particularly in the field of production of milk. Income so earned by assessee trust from these activities was applied for the main objects of assessee trust and, therefore, it would not be said that all these activities were not being carried out in accordance with object of assessee trust, rather these activities were being carried out to attain the main objects of assessee-trust, accordingly, withdrawal of registration under section 12A was set aside.

Relied:Director of Income Tax (Exemptions) v. Shree Nashik Panchvati Panjrapole (2017) 81 Taxmann.com 375 (Bom) : 2017 TaxPub(DT) 1508 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10

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