In Gyaan Vikas Foundation v. CIT (Exemptions), the division bench of the ITAT, Kolkata held that registration under section 12A of the Income Tax Act cannot be denied to a Trust merely on ground it
collects fee from the students.
Assessee-Trust conducted vocational training in garment making and designing. The CIT refused to grant registration under section 12A to the assessee by finding that they had received fees from the students undergoing course in garment making and designing.
The bench noticed the decision in India Trade Promotion Organisation vs DGIT (Exemption) and Others wherein the Hon’ble Delhi High Court held that merely because fee or some other consideration is collected or received by an institution, it would not loose its character of having
been established for charitable purpose.
Granting relief to the assessee, the bench held that the CIT(E) went wrong in concluding that the assessee trust is not genuine and does not exist for charitable purpose for the sole reason that it charges fees from the students undergoing course in garment making and designing.
“In our view this can neither be the basis to conclude that the activities of the assessee are not genuine or the first proviso to section 2(15) of the Act would be applicable. The decision rendered by the Hon’ble Delhi High Court in the case of India Trade Promotion Organisation vs DGIT (Exemption) (supra) clearly supports the plea of the assessee in this regard. There is no material brought on record to show that the primary desire or motive is to earn profit. On the other hand, the
objects of the assessee are admittedly advancement of any other object of general public utility. The decision rendered by the Hon’ble Delhi High Court in the case of CIT vs Shri Ram Education Foundation (supra) also supports the plea of the assessee that training women in the art of stitching and embroidery by running a vocational training centre would constitute the object of general public utility. As already observed there is nothing brought on record to show that the activities of the assessee are driven by profit motive.” The bench said.
collects fee from the students.
Assessee-Trust conducted vocational training in garment making and designing. The CIT refused to grant registration under section 12A to the assessee by finding that they had received fees from the students undergoing course in garment making and designing.
The bench noticed the decision in India Trade Promotion Organisation vs DGIT (Exemption) and Others wherein the Hon’ble Delhi High Court held that merely because fee or some other consideration is collected or received by an institution, it would not loose its character of having
been established for charitable purpose.
Granting relief to the assessee, the bench held that the CIT(E) went wrong in concluding that the assessee trust is not genuine and does not exist for charitable purpose for the sole reason that it charges fees from the students undergoing course in garment making and designing.
“In our view this can neither be the basis to conclude that the activities of the assessee are not genuine or the first proviso to section 2(15) of the Act would be applicable. The decision rendered by the Hon’ble Delhi High Court in the case of India Trade Promotion Organisation vs DGIT (Exemption) (supra) clearly supports the plea of the assessee in this regard. There is no material brought on record to show that the primary desire or motive is to earn profit. On the other hand, the
objects of the assessee are admittedly advancement of any other object of general public utility. The decision rendered by the Hon’ble Delhi High Court in the case of CIT vs Shri Ram Education Foundation (supra) also supports the plea of the assessee that training women in the art of stitching and embroidery by running a vocational training centre would constitute the object of general public utility. As already observed there is nothing brought on record to show that the activities of the assessee are driven by profit motive.” The bench said.
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