The Pune Bench of Income Tax Appellate Tribunal (ITAT) ruled that the Federation of Trade Association of Pune was entitled to get registered as a Trust.
The assessee, Federation of Trade Association of Pune moved an application for grant of registration under section 12A of the Act. The CIT(E) called upon the assessee to explain as to how it was covered within the definition of ‘Charitable purpose’ as per section 2(15) of the Act when it was charging membership fee. The assessee submitted a Note explaining the purpose and objects of its formation. The CIT(E), after considering the aims and objects of the trust, as per clause 4 of the trust deed, came to hold that the trust was a Members’ association and all the activities were limited to its members and not to general public at large so as to fall within the clause “advancement of any other object of general public utility”. He, therefore, refused the registration against which the assessee has come up in appeal before the Tribunal.
The objective of the assessee trust is to promote, develop and protect the interests of trade and commerce and also to foster the feeling of unity and co-operation among the persons engaged in trade and commerce of all the matters concerning their common good. Section 2(15) defines ‘charitable purpose’, inter alia, including “the advancement of any other object of general public utility”. Proviso to this section provides that the advancement of any other general public utility shall not be charitable purpose if it involves carrying on any activity in the nature of trade and commerce or business etc. subject to certain conditions. On going through the mandate of section 2(15), insofar as it is relevant for our purpose, it emerges that firstly, the objects of the trust should be of advancement of any other general public utility and secondly, no activity in the nature of trade and commerce or business etc., should be carried on by it.
The coram headed by the Vice President, R.S.Syal and Judicial Member S.S. Vishvanethra Ravi noted that it has been set up to promote and protect the interests of trade and commerce. The assessee-association carried out protests against certain clauses of the Shop Act for which it collected certain sums from its members and then spent it. The same is true for Advertisement receipts and expenses. The assessee organized a certain campaign for the promotion of trade and commerce. The amount collected from the members was described as Advertisement receipts and the amount spent on organizing such an event was described as Advertisement cost.
Therefore, the Tribunal ruled that the assessee fulfils the requisite conditions for falling under the head ‘charitable purpose’ as defined under section 2(15) of the Act. Apart from that, the CIT(E) has not referred to any other disqualification disentitling the assessee to registration. Overturning the impugned order, we grant the registration.
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