Dismissing the appeal of the Revenue the Court held  that once registration was done under section 12A, it was a fait accompli and the Assessing Officer could not thereafter have probed into the objects of the assessee and hold that there was no charitable activity, unless the material on record indicated that there was violation of conditions or objects of the trust deed. The trust deed of the assessee, registered under the provisions of the Act, indicated that its activity was to allot workers to the users, as per their indent and for that purpose, maintain office or establishment, employing necessary personnel, utilise the surplus arising out of the collections from the users and voluntary contributions obtained from the public to such charitable purposes as the board of trustees deemed it expedient from time to time, collection of money from the users of private workers pool and distribute wages to the private workers, apart from collecting subscriptions from the members of the Stevedor’s Association and Clearing and Forwarding Agents Association who intended to use private workers enrolled by the assessee. The Assessing Officer had erred in probing into the objects of the assessee.   That the assessee’s formation only for the purpose of regulating the operations of private workers in the dockyard was approved as an act of “charitable purpose” by the Commissioner. The preamble of the trust deed contemplated that the purpose for which the trust was constituted was to organise functioning of private workers pool, for the benefit of such workers. The main object, for which the assessee was formed did not indicate any profit motive. The role of the trust was to identify, enrol, allot work and regulate the operation of private workers, which activity was being carried out by the assessee from its inception. The object of the assessee indicated the surplus earned, while carrying on such activity, should be retained for carrying on its objects and therefore, the activities of the assessee could not be treated as “business activity”. There was no profit motive in carrying on the objects by the assessee, namely, taking care of the welfare of labourers, who were not enrolled by the Dock Labour Board. The so-called business activity, when intrinsically woven into and was part of the charitable activity, the business activity was not feeding charitable activities, as they were integral to the charity or charitable activity. The wages and fees payable by the users and shipping companies were fixed by the Dock Labour Board and collected accordingly. The trustees were not entitled for any remuneration or profit except reimbursement of expenses incurred by them on behalf of the assessee in terms of clause 16 of the trust deed. Therefore, all the above factors or activities of the assessee, which were being carried out right from the inception, only indicated that the activities were for advancement of general public utility, as stated in clause 3 of the trust deed. The Tribunal’s findings that these activities of the assessee were charitable in nature need not be interfered with unless it was established that there was a grave error apparent on the record. That the amounts advanced by the assessee to two settler associations could not be treated as “investments” and, hence there was no violation of section 11(5) and accordingly, the question of violation of section 11(3) did not arise. The amounts were advanced in the year 1995 and had been paid back in the financial years 2000-01 and 2007-08.   That though on the amounts advanced to the two settler associations, who were the trustees and also the office bearers of the assessee, interest was not charged initially, later on both the amounts were collected with interest at 12 per cent. Both the loans were covered by adequate security and adequate interest. The interest liability in both the cases was recognized on accrual basis from the beginning, from the year 1995 and the actual interest was accounted for its receipts and payments on cash basis. Hence, the finding of the Tribunal that there was no violation of section 13(1)(c) read with section 13(2), did not call for interference. That according to form 10, filed by the assessee, for the assessment year 1999-2000, the purpose for accumulation of funds was, (a) building construction, (b) for payment of provident fund, pension, gratuity, productivity bonus, family security scheme, time rate and piece rate wages and (c) to meet the expenditure for other welfare amenities provided by the pool. The activities carried on by the assessee were in accordance with the objects for which it was formed and registered and had been approved as “charitable” by the Commissioner and registered as trust under section 12A. Therefore, even on this aspect, there was no violation of section 11(2).(AY. 2003-04)