Sec. 11 and 12 of Income Tax Act, 1961 – Trust – Exemption – The activities like organizing the event of Garba including the sale of tickets and issue of passes etc. cannot be termed as business, thus, the activities of assessee could be termed as charitable in nature and assessee would be eligible for benefit under Sections 11 and 12.

Facts:  Whether ITAT is justified in allowing the benefit of Section 11 and 12 when the Assessing Officer has clearly brought on record that assessee is covered under the proviso to Section 2(15) r.w.s. 13(8)?

Held, that income received by the assessee is from organizing the event of Garba by sale of tickets and also leasing out food and beverages outlets at the venue of the event. However, the dominant and main object of the assessee cannot be said to be organizing the event of Garba. The charitable activities which the assessee has been undertaking has been discussed by Tribunal. We take notice of the fact that the assessee has been supporting 120 non-government organizations. The assessee is into health and human services for the purpose of improving the quality of life in the society. The objectives of the Society includes mobilizing resources from the local communities. It organizes medical camps for thalassemia affected children. It also provides vocational training to the disabled orphans, undertakes various program for empowering women including providing midday meal to the poor students. The activities like organizing the event of Garba including the sale of tickets and issue of passes etc. cannot be termed as business. The two authorities have taken the view that the profit making is not the driving force or the objective of the assessee. This is indicative of the fact that any income generated by the assessee from events like Garba does not find its way into the pockets of any individual or entities. It is to be utilized fully for the purposes of the objects of the assessee. An activity would be considered ‘business’ if it is undertaken with a profit motive, but in some cases, this may not be determinative. Thus, the activities of assessee could be termed as charitable in nature and the assessee would be eligible for the benefit under Sections 11 and 12 – CIT Vs. UNITED WAY OF BARODA [2020] 423 ITR 596 (GUJ)