The objective of the proviso to section 2(15) is to deny exemption to such assessee who are engaged in business activities in the garb of charitable purpose. Mere selling some product at a profit will not ipso facto hit the assessee by applying the proviso to section 2(15) and deny the exemption available u/s 11.
Manner in which the activities of the charitable trust/institution are undertaken are highly relevant to decide the issue of applicability of proviso to section 2(15). The cases where profit making is the object should be distinguished from the cases, where, although the objects of the trust are wholly charitable, but some profit was made out of the activities undertaken by the Trust for the purpose of achieving the objects of the general public utility..
