Case Law Details
Manna Trust Vs CIT (Exemption) (ITAT Jodhpur)
The issue under consideration is whether the Mid Day Meal supply to the poor students of the schools as per the programme of State Government is considered as commercial activity?
In the present case, the assessee is a is a Public Charitable Trust registered u/s 12AA of the Act. The Trust is mainly engaged in providing nutritional status and reduce the drop out of student from school by implementing mid-day meal scheme. The assessee Trust is providing Mid Day meal in Govt. Schools in the State of Andhra Pradesh, Telangana, Odisha and Madhya Pradesh.
ITAT states that it is apparent that merely because consideration is collected or received by an Institution, it would not lose its character of having been established for a charitable purpose. It is also important to note that we must examine as to what is the dominant activity of the Institution in question. If the dominant activity of the Institution was not business of trade or commerce then they such incidental or ancillary activity would also not fall within the categories of the trade, commerce or business. It is clear from the facts of the present case that the driving force is not the desire to earn profit, but the object is to provide nutritional status and reduce the drop out of student from school by implementing mid-day meal scheme. In view of the above ITAT safely conclude that the nature of activities carried out by the assessee trust is charitable in nature and hence proviso to section 2(15) would not be applicable.
FULL TEXT OF THE ITAT JUDGEMENT
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