|CORAM:||C. M. Garg (JM), Pramod Kumar (AM)|
|SECTION(S):||11, 12A, 2(15)|
|CATCH WORDS:||Charitable purpose, registration|
|DATE:||January 22, 2015 (Date of pronouncement)|
|DATE:||February 2, 2015 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 2(15): Receiving fees simplicitor is not reason enough to hold that the activity is not a charitable activity. The fundamental essence of the activity has to be seen|
The assessee institution is set up by the Indian Army and it seeks to promote the well being of their personnel after their retirement from the service, as also of the widows and dependents of the brave army men who sacrifice their lives, and help them integrate in the civil society by taking up suitable employment. This is surely an activity of general public utility, and, therefore, covered by the definition of ‘charitable purposes’ under section 2(15). The true test for deciding whether an activity is business activity is (i) whether the said activity undertaken with a profit motive, or (ii) whether the said activity has continued on sound and recognized business principles, and pursued with reasonable continuity. Clearly, therefore, in a situation in which an activity is not undertaken with a profit motive or on sound and recognized business principles, such an activity cannot be considered to be a business activity.