COMMISSIONER OF INCOME-TAX Vs. KANDLA PORT TRUST

JUDGEMENT

(1.) These tax appeals are connected. Only Tax Appeal No. 575 of 2009 has been admitted for considering the following substantial questions of law:

(2.) Learned counsel, Mr. Pranav Desai, for the Revenue submitted that the Commissioner on the basis of the materials on record came to the conclusion that the activities carried on by the respondent-assessee were not for charitable purpose. Such activities clearly were in the nature of commercial activities. K.P.T. was, therefore, not entitled to registration, so rightly held by the Commissioner. He relied on the decision of the Supreme Court in the case of Indian Chamber of Commerce v. C.I.T., 1975 101 ITR 796 in which section 2(15) of the Act came up for consideration in the context of section 11 of the Act in which it was observed that the institution which carries on charitable purpose out of income derived from property held under trust wholly for charitable purpose may still forfeit the claim to exemption in respect of such takings or incomes as may come to it from pursuing an activity for profit.

(3.) Counsel also relied on the decision of the Uttarakhand High Court in case of C.I.T. v. National Institute of Aeronautical Engineering Educational Society, 2009 315 ITR 428in which it was observed that mere imparting of education for making profit would not make it a charitable purpose. It was held that the Commissioner, while passing the order under section 12AA of the Act, is not supposed to allow registration blindly. The expression "charity" in the expression "charitable purpose" is the soul of the expression and mere trade or commerce in the name of education cannot be said to be a charitable purpose.