Institutions set-up to provide placement services to ex-army personnel and their widows were charitable institutions

Facts of the case :-

		The assessee was a welfare and non-profitable organization set-up by Indian Army. Its aims and objectives, inter alia, included placement for retired army personnel and their widows.
		Its application for registration under section 12A was rejected by DIT on the ground that assessee was doing a commercial activity as it was a placement agency which was charging fee for its services.
		The aggrieved assessee filed the instant appeal before the Tribunal. Tribunal held in favour of assessee :-   As per section 2(15) charitable purpose includes advancement of any object of general public utility. However, the proviso to sec. 2(15) provides that advancement of any object of general public utility shall not be a charitable purpose if it involves carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business for a cess, fee or consideration.   Thus, rendition of a service would vitiate a charitable nature of the activity only when the service is rendered to a trade, commerce or business. In the instant case the service was rendered to ex-army personnel, their widows and dependents, rather than to any trade, commerce or business and, therefore, proviso to section 2(15) was not applicable.   There was nothing on record to suggest that this organization was set-up on any commercial basis. Mere receipt of fees from applicants could not convert a charitable activity into a commercial activity.   The assessee-institution was set-up by Indian army and it sought to promote the well being of their personnel after their retirement from the services, as also of the widows and dependents of the brave army men who sacrificed their lives, and would help them to integrate in the civil society by taking up suitable employment. This was an activity of general public utility, and, therefore, was covered by definition of charitable purpose.   Therefore, the activities undertaken by assessee-institution were not with a profit motive and such activity could not be considered as business activity. The DIT was to be directed to grant registration to assessee-institution under section 12A.