MAHESHWARI FOUNDATION Vs. DIRECTOR OF INCOME TAX (EXEMPTIONS)

JUDGEMENT

(1.) The assessee has preferred this appeal against the order passed by the Tribunal upholding the order passed by the Commissioner holding that the assessee is not entitled to the benefit of renewal of recognition under Section 80G of the Income-Tax Act, 1961 (for short, hereinafter referred to as 'the Act'). The assessee is a Trust formed on 12.07.2000. It filed an application for renewal of the recognition granted under Section 80G of the Act on 31.03.2008. The authorities called for certain details in connection with the renewal of the recognition and the same was furnished. The assessee was running a Hostel for students, for which charges were collected for both boarding and lodging. According to the assessee it was treated as a charitable purpose and Section 80G benefit was given up to 31.03.2008. Even after the amendment to Section 2(15) of the Act without prejudice to its applicability, in view of the provisos, the position will be the same if the gross revenue from business was less than Rs. 25 lakhs. The Director of Income-tax (Exemptions) was not convinced. Therefore, he rejected the renewal on the ground that the activity does not come within the scope of Section 2(15) of the Act as amended from 01.04.2009.

(2.) Aggrieved by the said order, the assessee preferred an appeal to the Tribunal. The Tribunal also held that running of a hostel would not fall within the definition of a charitable purpose and therefore, upheld the order of the Director of Income Tax.

(3.) Aggrieved by the said order, the present appeal is filed. The appeal was admitted to consider the following substantial questions of law: