S. 2(15) charitable purpose where ICAI was alleged for indulging in “Commerce” for its coaching classes – HC rejected that same do not amounts to “business”

ICAI & ANR. vs DGIT (EXEMPTIONS) (Delhi HC)- Even if the profits earned are used for charitable purposes, but fee, cess or consideration is charged by a person for carrying on any activity in the nature of trade, commerce or business or any activity of rendering of any service in addition to any trade, commerce or business, an institution will not be regarded as established for charitable purpose/activity (it would be covered under the proviso and the bar/prohibition will apply)

DIT (Exemptions) vs ICAI (Delhi HC) - The purpose and object to do business is normally to earn and is carried out with a profit motive; in some cases the absence of profit motive may not be determinative. The appellant has given no such finding as far as the activities of the institute are concerned. The appellant without examining the concept of business has held that the institute was carrying on business as coaching and programmes were held by them and a fee is being charged for the same. On the basis of the findings recorded in the order dated 29^th March 2010, under section 263 of the Act, it is not sufficient to hold that the institute is carrying on business. In these circumstances, we do not think that the order passed by the appellant under Section 263 of the 1961 Act can be sustained and was, therefore, rightly upset and set aside by the Tribunal.

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