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On the basis of these facts, the Revenue Authority granted registration to the appellant as an institution established for charitable purposes within the meaning of section 2(15) of the Act. Though the assessee does earn certain income by reason of hiring of locker facilities as incidental to the main custom clearance facilities made available to members as well as non-members, and debits the expenses incurred in respect of customs department, transport charges, security charges and rent for the premises, these earnings must be treated as ancillary to the dominant purpose for which the Diamond Bourse were established. The revenue authorities have concurrently held that, taking an overall view, the dominant objects of the assessee are charitable as the dominant object is one of general public utility and, therefore, the assessee is entitled to be registered as an institution established for charitable purpose within the meaning of section 2(15) of the Act. The learned senior counsel for the revenue, however, relied on the judgments of this court in the case of Delhi Stock Exchange Association Ltd. v. CIT [1997] 225 ITR 235 and the judgment of the Patna High Court in the case of Bihar State Forest Development Corpn. v. CIT [1997] 224 ITR 757 to content that the activities of the assessee bourse fall outside the definition of 'charitable purpose', even though the bourse might have been registered as an institution established for charitable purpose within the meaning of section 2(15) of the Act. The decision of the Constitutional Bench of this Court in Addl. CIT v. Surat Art Silk Cloth Mfrs. Association [1980] 2 SCC 31 really clinches the issue. The assessee in Surat Art Silk Cloth Mfrs. Association's case (supra) was an association established to promote commerce and trade in Art Silk Yarn, Raw Silk, Cotton Yarn, Art Silk Cloth, Silk Cloth and Cotton Cloth. Its objects, as evidenced from the 10 ITA 884/M/2012 , 2789/M/2011 4437/M/2011, 2790/M/2011 4852/M/2011, 2791/M/2011 6591/M/2011, 3004/M/2013 3127/M/2015 memorandum of association, included, inter alia, carrying on business in Art Silk Yarn, Raw Silk, Cotton Yarn, Art Silk Cloth, Silk Cloth, and Cotton Cloth belonging to and on behalf of its members as well as buying and selling and dealing in all kinds of cloth and yarn belonging to and on behalf of its members. The Constitutional Bench of this Court held that, if there are several objects of the institution, some of which are charitable and some non-charitable, and the trustees or the managers in their discretion may apply the income of the institution of those objects, the trust or institution would not be liable to be regarded as charitable and no part of its income would be exempted from tax. Where the main or primary objects are distributive, each and every one of the object must be charitable in order that the trust be held as a valid charity. But, if the primary or dominant purpose of the institution is charitable and another which, by itself, may not be charitable, but is merely ancilliary or incidental to the primary or dominant object, it would not prevent the institution from validly being recognized as a charity. The test to be applied is, whether the object which is said to be non-charitable is the main or primary object of the trust or institution or it is ancilliary or incidental to the dominant object which is charitable. Reiterating its earlier view in CIT v. Andhra Chamber of Commerce [1965] 55 ITR 722, the Supreme Court said in Surat Art Silk Cloth Mfrs. Association's case (supra) that if the primary purpose is advancement of objects for general public utility, the institution would remain charitable, even if an incidental non-charitable object for achieving that purpose was contemplated. In the case of Andhra Chamber of Commerce (supra) it was held that a Chamber of Commerce did not cease to be charitable merely because the members of the chamber were incidentally benefited in carrying out its main charitable purpose. This Court approvingly followed the ratio in the case of Commissioner of Inland Revenue v. Yorkshire Agricultural Society [1928] 1 KB 611 and Institution of Civil Engineers v. Commissioner of Civil Revenue [1932] 1 KB 149 for reaching the conclusion that merely because some facilities incidentally arose to the members of a society or institution in the course of carrying out its main charitable purpose, that by itself would not prevent the institution from being a charity.

2. Section 2(15) of the Act provides definition of "charitable purpose". It includes "advancement of any other object of general public utility"

provided it does not involve carrying on of any activity in the nature of trade, commerce or business etc. for financial consideration. The 2nd proviso to said section, introduced w.e.f. 1-4-2009 vide Finance Act 2010, 13 ITA 884/M/2012 , 2789/M/2011 4437/M/2011, 2790/M/2011 4852/M/2011, 2791/M/2011 6591/M/2011, 3004/M/2013 3127/M/2015 provides that in case where the activities of any trust or institution is of the nature of advancement of any other object of general public utility and it involves carrying on of any activity in the nature of trade, commerce or business; but the aggregate value of receipts from such commercial activities does not exceed Rs. 25,00,000/- in the previous year, the purpose of such trust/institution shall be deemed as "charitable" despite it deriving consideration from such activities. However, if the aggregate value of these receipts exceeds the specified cut-off, the activity would no longer be considered as charitable and the income of the trust/institution would not be eligible for tax exemption in that year. Thus an entity, pursuing advancement of object of general public utility, could be treated as a charitable institution in one year and not a charitable institution in the other year depending on the aggregate value of receipts from commercial activities. The position remains similar when the first and second provisos of section 2(15) get substituted by the new proviso introduced w.e.f. 1-4-2016 vide Finance Act, 2015, changing the cut-off benchmark as 20% of the total receipts instead of the fixed limit of Rs.25,00,000/- as it existed earlier.