S.10(23C):Exempt income-Educational institution-Object of general public utility-Petitioner had
not rendered its services directly to farmers but was rendering its services directly to its
clients/agents who were engaged in tradinghence rejection of exemption was valid.[S.2(15)]
Petitioner is registered under Andhra Pradesh (Telangana Area) Public Societies Registration Act, 1350
Fasli. It was carrying on functions of certification agency under Seeds Act, 1966.Seed growers were
entering into contract with a society/agent, which approached petitioner for certification of seeds and after
securing certification, they were selling certified seeds to farmers at a market price determined by them.
Petitioner was also collecting fee for providing certification. Its application for approval under section
10(23C) (iv) was rejected by Chief Commissioner.
The court held that thepetitioner had not rendered its services directly to farmers but was rendering its services directly to its clients/agents who were engaged in trading of certified seeds with profit motive and, therefore, its activities were not for 'advancement of any other object of general public utility' and hence not for 'charitable purpose' in view of second limb of first proviso to section 2(15). Therefore, its application for approval under section 10(23C) (iv) was rightly rejected. In favour of revenue. (A.Y.2010-11)
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