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5. Thus, the society has number of objects, not all of them charitable as evident from the above like To workout and recommend the service fee or user charges that could be charged from the end customers for the approval of the competent authority and concerned departments / organizations over and above the prescribed bill amount / fee / statutory fee for providing the services through Sukhmani Centres/ Financial Institutions or Franchisees.

In East India Industries (Madras)(P) Ltd v. CIT(1967) 65 ITR 611(SC)], and Yogiraj Charity Trust v CIT(1976) 103 ITR 777(SC)] the Hon'ble Supreme Court had held that, where the main or primary objects of a trust are distributive, each and every one of the objections must be charitable if the trust is to be upheld as a valid charitable.

"Wholly for religious or charitable purposes" - The words ' wholly for religious or charitable purposes' as mentioned in section 11(1) of the I.T. Act show that the income from trust property would be exempt only if all the objectis of a trust are of a charitable or religious purpose".

Power to apply income to non-charitable object- jeopardizes the exemption- In case a trust has ten distinct objects and nine of them are of a religious or charitable nature but the tenth is not, and there is nothing to prevent the trustees from applying the property to the trust in carrying out any of the objects of the trust including the object which is not a religious or charitable nature the income derived from the property of the trust would not be exempt. The reason is that the trustees in such an even can apply the property of the trust exclusively for that purpose which is not of a religious or charitable nature. [CIT v. Jaipur Charitable Trust, (1971) 81 ITR 1,9 (Delhi), affirmed, (1976) 103 ITR 777 (SC); Zenith Tin Works Charitable Trust v. CIT, (1976) 102 ITR 119(Bom).

5. We have heard the rival contentions and perused the facts of the case. On reading the provisions of Section 11(1) certain incomes are not included in the total income of the previous year of the person i.e. such income derived from the property under the trust wholly for charitable or religious purposes to the extent to which such income is applied to such purposes in India and where any such income is accumulated or set apart for application of such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen percent of the income of such property. Accordingly we have to peruse the whether income derived by the assessee trust is income wholly for charitable purpose to the extent to which such income is applied. On perusal of the main objects of the society reproduced herein above and the balance sheet and income and expenditure account which are part of the paper book, none of the expenditure was found to be of charitable in nature. The learned counsel for the assessee have not been able to point out any expenditure incurred by the assessee trust as that of charitable in nature of having been incurred for charitable purpose or for the advancement of any other object of general public utility. As substituted by the finance Act 2008 w.e.f. 1.4.2009 in section 2(15) in first proviso which reads that the advancement of any other object of general public utility shall not be a charitable purpose if it involves the 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 of fee or any other consideration, irrespective of the nature of use or applicable or retention if the income from such activity. Second proviso to sec.2(15) in the present case is not applicable since the receipt in the impugned year are exceeding Rs.25 lacs. Therefore, in the present circumstances and facts of the case and keeping in view the provisions contained in Section 11(1), we have perused that whether the assessee trust has derived the income wholly for charitable purpose during the impugned year, in view of Section 2(15) specifically with reference to the first proviso. The learned Counsel for the assesse Mr. Badam Bahl CA at the out set has argued that the facts in the present case are identical to the facts in the case of Sukhmani Society for Citizen Services, Mansa(supra) where the activities of the society have been held of not charitable in nature and assessee has been held of doing business in that case. On the other hand, the learned counsel for the assessee has argued that the order of the ITAT, Amritsar Bench in the case of Sukhmani Society for Citizens services, Mansa (supra) is a wrong order. Pointing out of the perversity in the case of Sukhmani Society for Citizen Services, Mansa(supra) before us is not a right forum which in fact is the Jurisdictional High Court. As regards arguments by Ld. AR that the assessee does not carry on business activities, the fact is undisputed that the society is charging the fees from citizens for providing the services as much as Rs.1,000/- for getting NOC for petrol pump, Rs. 500 for registration of marriage, Rs.500 for new arms license and so on as per details available at AO page 10 & 11. Fees charged by assessee are in addition to the statutory fees if any charged by the State Govt. departments. The charges/fees are charged by the society for providing alleged citizen services for which in fact the State Government is obliged to provide such services without any charges/fees or by charging some nominal/statutory fees. The charging of additional charges in addition to charging of statutory fees for getting the work done from State Govt. Departments is purely an activity of commercial in nature and with an intent to earn profit and such activities shall be termed as activities in the nature of commerce, trade or business and such activities cannot be said to be the activities for charitable purpose in view of first proviso to section 2(15) of the Act. On the perusal of the income and expenditure account of the impugned year, we do not find that the assessee has incurred any expenses of charitable in nature. From the perusal of objects of trust and the activities carried out by the trust, we have found out that the assessee is free to take uncontrolled decision to spend the whole of the trust fund in the manner it likes. At page 5 of AO's order, the assessee in its object has the power to establish and maintain any agencies and franchises in the district for the conduct of the business of the society and otherwise also the assessee has not been able to establish any of the expenditure incurred for the charitable purpose. Though we are aware that surplus of any institution cannot be an indicator to hold the institution as of non-charitable in nature, unless corroborated by non-charitable activities. The assessee has derived the surplus of Rs.31,03,672/-, Rs.28,74,827/- and Rs.3,76,761 as against receipts of Rs. 84,83,787, Rs.85,11,918 and Rs. 78,22,625 for the Assessment year 2006-07, 2007-08 and 2009-10 except in the assessment year 2008-09 there is a negative surplus of Rs.2,67,517/- as against receipts of Rs.76,14,717/-. As per our findings hereinabove, the reason for such surplus is charges on account of additional charges fees charged from customers which activities are termed as commercial activities. In fact, providing of such facilities or services is a concern of State Govt. and its Departments free of cost or by charging statutory fees only. Whereas charging the public so exorbitantly cannot be given a name of charging the moderate fee. Even if fees so charged is named as moderate fees still it does not loose its character of being commercial, trade or business in nature in view of our findings hereinabove, which in fact is a continuous and systematic activity having a character of profit motive and is having the essential character of that of business i.e. the transaction is carried out between two persons which involves reciprocity which is an essence of a business and not a unilateral act. The business is being carried on sound business principles with reasonable continuity. The learned Counsel for the assessee has mainly relied upon the decision in the case of Sabarmati Asharam Gaushala (supra) where the assessee carried the matter in appeal. CIT(A) rejected the appeal and confirmed the order of the Assessing Officer. The assessee, therefore, approached the Tribunal in second appeal. Tribunal reversed the decision of the revenue authorities holding that the assessee is a charitable trust and proviso to section 2(15) of the Act will not apply. The Tribunal relied on the Finance Minister's speech in the Parliament explaining proviso to Section 2(15) as also the CBDT Circular No.11/2008 of 19th December, 2008. The Tribunal took note of the objects of the Trust and came to the conclusion that the Trust was carrying on its activities on non- commercial basis with no motive to earn profit. The aims and objects of the Trust were charitable in nature. While implementing such objects, if there was any profit, incidentally generated, the same would not be hit by proviso the section 2(15) of the Act. In the conclusion, the Tribunal clarified that the decision was delivered in peculiar facts of the case. On appeal by revenue the Hon'ble High Court of Gujrat referred to the Finance Minister's speech:-