Telangana Corrugators Vs. CIT (Exemptions) (ITAT Hyderabad
Andhra Pradesh Corrugated Box Manufacturers Association from which the assessee has been carved out, has similar objectives and has already been granted registration u/s 12AA of the Act vide order dated 18.08.2008 which has since been not rescinded. The assessee has been formed on the bifurcation of the State of Telangana and is having the same objectives and therefore, it is also entitled for registration u/s 12AA of the Act on this ground alone. Even otherwise, the objectives of the assessee are for the benefit of a particular trade. Whether restricting the benefit to the members of a particular trade dis entitles it from registration u/s 12AA of the Act?. This issue has first been examined in detail by the Constitution Bench of the Hon’ble Supreme Court in the case of Surat Art Silk Cloth Manufacturers Association (Supra). The Hon’ble Supreme Court held that where the dominant and primary object of the assessee is to promote commerce and trade in art silk yarn etc., it is charitable and the other benefits which are incidental in carrying out the main or primary purpose of the assessee, would not make it not charitable. This finding was reiterated by the Apex Court in the case of CIT vs. Andhra Chamber of Commerce (1965) 55 ITR 722) by holding that the Chamber of Commerce did not cease to be charitable merely because the members of the chamber were incidentally benefited in carrying out its main charitable purpose.
