Institue of CA of India & Anr. v. Dir. General of Income Tax (Exemptions)

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The Tax Publishers2013 TaxPub(DT) 2073 (Del-HC) : (2013) 260 CTR 0001 : (2013) 217 TAXMAN 0152 : (2013) 090 DTR 0161 Income Tax Act, 1961 --Exemption under section 10(23)(iv)--Educational institution Fees from coaching classes by assessee--Assessee had been incorporated by virtue of section 3 of ICAI Act, 1949 as a body corporate which is constituted by all members whose names are entered in register of members maintained under the ICAI Act. Since incorporation assessee had considered as having been formed for charitable purpose as defined under section 2(15). Declaration that assessee was entitled to exemption under section 10(23C)(iv) subject to fulfillment of certain conditions has been notified by Income Tax authorities from time-to-time until assessment year 2005-06. Thereafter, benefit of exemption under section 10(23C)(iv) was denied on the ground that activity undertaken by assessee of providing coaching to students amounts to carrying on business and liable to be treated as business income. As assessee was not maintaining separate books with respect to activity of coaching. Assessing officer denied assessee's claim under section 11. Assessing officer further held that assessee had violated section 13(1)(d) also as certain sum was outstanding against, ICAI Research Foundation in books of assessee. However, for assessment years 2006-07 and 2007-08 High Court allowed exemption to assessee under section 10(23)(iv)/11 and remanded issue to DIG (Exemption) and however, DIG(E) again rejected assessee's claim under section 10(23)(iv). Further, for assessment year 2008-09 assessing officer allowed exemption under section 11 to assessee holding that its objection were charitable in nature. Further, DIG (Exemption) has also noted that conducting of coaching classes by assessee was clearly fall under proviso to section 2(15) as inserted with effect from 1-4-2009 and assessee was indulged in business trade and commerce. Held: Not justified. After going through provisions of ICAI Act and Regulations framed therein as well as various activities carried out by assessee, assessee institution does not carry any business, trade or commerce. Activity of imparting of education in the field of accountancy and conducting courses both at pre-qualification and post qualification level are activities in furtherance of objects for which assessee had been constituted. Activity of providing coaching classes or undertaking campus placement interviews for a fee were in relation to main object of assessee which cannot be held as trade, commerce or business. Assessee was thus, entitled to exemption under section 10(23C)(iv). Indisputably, substantial activity of the petitioner institute revolves around providing education to students for the purposes of feeding the profession of Chartered Accountancy in India. It is only those students who successfully undergo the courses conducted by the petitioner who are eligible to practice the profession of a Chartered Accountant in India. The special programmes also include providing coaching classes to students to enable them to attain the requisite level of proficiency in various subjects forming the course as approved by the petitioner. This Court in the case of Institute of Chartered Accountants of India v. Director General of Income Tax (Exemptions) (supra) while disposing of writ petition No. 1927/2010 and remanding the matter to the respondent DGIT (E) also held that the petitioner was providing education and the conduct of the courses by the petitioner could not be equated or categorized as coaching classes conducted by private institutions for students to appear in entrance examination or for pre-admission in examinations being conducted by universities and other Institutions. This court further held that a private coaching institute does not have any statutory or regulatory duty to perform and in this aspect, the case of the petitioner was different and the activities undertaken by the petitioner satisfied the term 'education. [Para 42] Given the aforesaid findings, the issue whether the petitioner was entitled to exemption under section 10(23C)(iv) prior to 1-4-2009 is no longer res integra and the said issue stands concluded in favour of the petitioner as its activities fell within the definition of 'charitable purpose' as it existed prior to 01-04-2009. The only question that remains to be considered is whether the activities of the petitioner fall in the proviso to section 2(15) as introduced with effect from 1-4-2009. [Para 45] The first proviso to section 2(15) carves out an exception which excludes advancement of any other object or general public utility from the scope of charitable purpose to the extent that it involves carrying on any activity in the nature of trade, commerce or business or any activity of rendering certain services in relation to any trade, commerce or business, for a cess or fee or any other consideration is irrespective of the nature of the use or obligation, or retention of the income from such activity. [Para 46] This court on the earlier occasion had considered the entire controversy and after elucidating the legal principles had remanded the matter to the respondent for a limited purpose for considering and examining the submissions made by the petitioner with regard to the expenses incurred by the petitioner and for answering the question whether the petitioner was carrying on any business, trade or commerce in the light of the observations and finding made by this court in its judgment The Institute of Chartered Accountant of India v. Director General of Income Tax (Exemption). This court had remanded the matter, inter alia, on the grounds that the figures with respect to the fee charged, expenditure and profits had been disputed by the petitioner institute. From the impugned order that DGIT (E) has failed to follow the legal principles and the observations made by this court while remanding the matter. The DGIT(E) was required to consider the submissions made by the petitioner which had been quoted by this court while remanding the matter and are quoted hereunder for convenience. [Para 47] In addition, the DGIT(E) was also required to examine the facts relating to the funds paid by the petitioner institute to Jaipur Development Authority and the Government of Rajasthan which had been reflected as debit balance against ICAI Accounting Research Foundation. ICAI Accounting Research Foundation had been incorporated by the petitioner institute with the object to impart training, promote knowledge, learning and education in various fields relating to accountancy and the funds paid by the petitioner were for the purposes of establishing a university in Rajasthan. In the impugned order, the DGIT (E) has not given any finding that the funds paid by the petitioner institute violate section 13. [Para 48] On remand, the DGIT (E) has passed the impugned order dated 13-04-2012, holding that the petitioner's activity of conducting classes is purely a commercial activity. The DGIT (E) has proceeded on the basis that the functions of ICAI are similar to the functions performed by UPSC and held that the position of ICAI, in providing coaching classes to its students was similar to the position of private organisations imparting similar training to the aspirants. [Para 49] The DGIT (E) held that the petitioner institute had received fees for holding interviews with respect to campus placement program and this also amounted to the petitioner working as a service provider between the members and the industry and were similar to the activities undertaken by any placement agency providing manpower to the industry. [Para 50] The DGIT (E) further held that the petitioner's contention that it was charging very nominal fee could not be considered as a charitable purpose as there was no specific arrangement for poor or needy candidates to get coaching from the institute without payment of fees. The DGIT (E) held that in order to fall within the definition of charitable purpose under the Act, it was necessary that the welfare and interest of public and specially poor section of the public be taken care of and since the fees structure of the petitioner institute remained the same for all categories of students and no arrangement was made by the petitioner institute for providing free coaching or coaching at concessional rate to poor section of the society, the petitioner could not be stated to be involved in charity. The DGIT(E) vide impugned order held that the ratio of the decision of the Patna High Court in the case of Bihar Institute of Mining and Mine Surveying v. CIT1994 TaxPub(DT) 865 (Pat-HC): (1994) 208 ITR 608 (Patna) securely covered the facts of the petitioner institute and therefore, the petitioner was liable to be taxed as a commercial establishment. [Para 51] It is found that the entire approach of the DGIT (E) in passing the impugned order is erroneous and runs contrary to the findings and observations of this court while remanding the matter to D GIT(E). This court held that the petitioner institute fell within the category of advancement of any object of general public utility. As such the petitioner would be an institution established for charitable purposes unless it is excluded by the application of the first proviso to section 2(15). The first proviso carves out an exception and excludes advancement of any object of general public utility from the ambit of charge to the extent any activity is carried on 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 or a fee or any other consideration. This court had while remanding the matter examined in detail the meaning of the terms trade, commerce and business and directed the DGIT (E) to apply the said principles. The private coaching concerns did not have a statutory or regulatory duty to perform and thus, coaching classes being provided by the petitioner could not be categorised as mere coaching classes conducted by a private institute. This court had set aside the order dated 19-05-2009 passed by D GIT (E) wherein reliance had been placed on the decision of Patna High Court in the case of Bihar Institute of Mining and Mine Surveying (supra). However, despite an express finding of this court that the said decision was not applicable to the facts of the present case, The D GIT (E) has proceeded to hold to the contrary. It is, thus, apparent that D GIT (E) has failed to comprehend the decision or the directions of this court while remanding the matter. [Para 53] After discussing various decisions with regard to the scope of the words trade, commerce & business, this court in the Institute of Chartered Accountant of India v. Director General of Income Tax (Exemption) (supra) held that while construing the term business for the purpose of section 2(15) the object and purpose of the section must be kept in mind and a broad and extended definition of business would not be applicable for the purpose of interpreting and applying the first proviso to section 2(15). [Para 57] This court while remanding the matter quoted the relevant passages from the decisions of the Supreme Court in the case of Raipur Manufacturing Co. (supra) and Sai Publication Fund (supra) and held that the test as prescribed in the said decisions can be applied to determine whether the petitioner institute was carrying on any business, trade or commerce. The DGIT (E) has completely ignored the said observations of this court and has proceeded to mechanically hold that the activities of the petitioner institute amounted to carrying on business. This, is completely erroneous. [Para 59] The petitioner institute has been constituted under the ICAI Act with the object to regulate the profession of Chartered Accountants in India and to ensure that the standards of professional knowledge and skill are met and maintained. The activities being undertaken by the petitioner substantially involve imparting education in the field of accountancy in order to ensure that the standards or profession of accountancy are maintained. The petitioner institute is the sole body empowered to conduct or approve a course in the field of accountancy. No other person can conduct any course or award any degree or certificate which indicates a level of proficiency or competence in the field of accountancy similar to that as of a chartered accountant. The activity of petitioner in conducting coaching classes is integral to the activity of the petitioner institute in conducting the courses in accountancy. [Para 60] The coaching classes being conducted by the petitioner cannot be equated with private coaching classes being conducted by organisations on commercial basis for preparing students to undertake entrance or other examinations in various professional courses. The coaching carried on by private organisations are not integral to the courses being conducted by them but for preparing students for examinations being conducted by other institutes and universities. In the case of the petitioner institute, the coaching classes are integral to the curriculum of the programme being conducted by the petitioner institute. [Para 61Para 62] This Court is also unable to agree with the reasoning of the D GIT (E) that holding interviews for a fee for the purposes of campus placement of its students amounts to carrying on a business. Campus placement is only a small incidental activity carried on by the petitioner institute like several other universities for placement of their students in gainful employment. This too is an activity ancillary to the educational programme being conducted by the petitioner institute and cannot be considered as a business being carried on by a placement agency. The object of the petitioner institute is not to carry on such business but to assist its students in securing employment. In this case, the object with which the activity of campus placement is carried on would determine its nature and the same is not business, trade or commerce. [Para 63] The reasoning of the D GIT (E) that since the petitioner institute charges a uniform fee from all students for providing coaching classes, thus, it cannot be said to be carrying on a charitable activity is also erroneous. It is now well settled that an eleemosynary is not an essential element of charitable purpose as defined under the Act. It is not necessary that a person should give something for free or at a concessional rate to qualify as being established for a charitable purpose. If the object or purpose of an institution is charitable, the fact that the institution collects certain charges does not alter the character of the institution. [Para 64] The fact that the petitioner institute charges a uniform fee from all students for coaching would not exclude the petitioner from the ambit of section 2(15) unless it is found that the petitioner falls within the scope of the first proviso to section 2(15), i.e., the petitioner carries on any trade, business or commerce or any activity of rendering any service in relation to any trade, commerce or business, for a cess or a fee. [Para 65] As stated earlier the matter was remanded to DGIT (E) to consider the submissions of the petitioner that it had been incurring administrative expenses which were much greater than the surplus and that had resulted due to the coaching provided to the students. Having erroneously come to the conclusion that the petitioner was carrying on business, the DGIT (E) has rejected the submission of the petitioner that its common administrative expenditure exceeded the surplus generated from coaching, as being not relevant. The DGIT (E) has also failed to consider that the activities being pursued by the petitioner are not with the object of earning profit but with the object of imparting knowledge and skill to ensure that Chartered Accountants in India have the requisite skill and professional competence and comprehend the code of ethics to be followed by them. [Para 66] The expressions trade, commerce and business as occurring in the first proviso to section 2(15) must be read in the context of the intent and purport of section 2(15) and cannot be interpreted to mean any activity which is carried on in an organised manner. The purpose and the dominant object for which an institution carries on its activities is material to determine whether the same is business or not. The purport of the first proviso to section 2(15) is not to exclude entities which are essentially for charitable purpose but are conducting some activities for a consideration or a fee. The object of introducing the first proviso is to exclude organizations which are carrying on regular business from the scope of charitable purpose. The purpose of introducing the proviso to section 2(15) can be understood from the Budget Speech of the Finance Minister while introducing the Finance Bill 2008. [Para 67] The expressions business, trade or commerce as used in the first proviso must, thus, be interpreted restrictively and where the dominant object of an organisation is charitable any incidental activity for furtherance of the object would not fall within the expressions business, trade or commerce. [Para 67] In the present case, there can be little doubt that the dominant object of the petitioner institute is to regulate the profession of Chartered Accountants in India and for that purpose, the petitioner institute conducts an extensive educational program to ensure that the profession is fed by Chartered Accountants having high standards of knowledge, skill and professional competence. Coaching classes conducted by the petitioner are also in aid of its objects. [Para 68] In the present case, there is little doubt that the objects of the activities of the petitioner are entirely for charitable purposes. [Para 70] Although, it is not essential that an activity be carried on for profit motive in order to be considered as business, but existence of profit motive would be a vital indicator in determining whether an organisation is carrying on business or not. In the present case, the petitioner has submitted figures to indicate that expenditure on salaries and depreciation exceeds the surplus as generated from holding coaching classes. In addition, the petitioner institute provides study material and other academic support such as facilities of a library without any material additional costs. [Para 71] There is nothing on record to indicate the assertion of the petitioner that its activities are not fuelled by profit motive is incorrect. Absence of profit motive, though not conclusive, does indicate that the petitioner is not carrying on any business. [Para 72] The petitioner institute has been established to perform a function of regulating the profession of Chartered Accountants. The functions performed by the petitioner institute are in the genre of public welfare and not for any private gain or profit and in this view, it cannot be said that the petitioner is involved in carrying on any business, trade or commerce. [Para 73] After going through the provisions of the ICAI Act and the Regulations framed therein as well as various activities carried on by the petitioner, the petitioner institute does not carry on any business, trade or commerce. The activity of imparting education in the field of accountancy and conducting courses both at pre-qualification as well as post-qualification level are activities in furtherance of the objects for which the petitioner has been constituted. Activities of providing coaching classes or undertaking campus placement interviews for a fee are in relation to the main object of the petitioner which as cannot be held to be trade, business or commerce. Accordingly, even though fees are charged by the petitioner institute for providing coaching classes and for holding interviews with respect to campus placement, the said activities cannot be stated to be rendering service in relation to any trade, commerce or business as such activities are undertaken by the petitioner institute in furtherance of its main object which are not trade, commerce or business. [Para 77] Revenue has not found any violation of section 13. Tribunal also notice that D GIT (E) has not found any violation of section 13 in the impugned orders. Further, it has also not been contended that the petitioner has violated section 13. Thus, this dispute also stands concluded in favour of the petitioner. [Para 79] In view of the above, these all writ petitions are allowed and set aside the two impugned orders dated 13-04-2012 and 28-09-2012 passed by the respondent D GIT (E) and further direct DGIT(E) respondent to recognise the petitioner as eligible under section 10(23C)(iv) as an institution established for charitable purposes having regard to its object and importance for the assessment years 2006-2007, 2007-2008, 2008-2009, 2009-2010, 2010-2011 and 2011-2012, subject to the petitioner complying with the other provisions of the Act. [Para 80] SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 2073 (Del-HC) : (2013) 260 CTR 0001 : (2013) 217 TAXMAN 0152 : (2013) 090 DTR 0161

Income Tax Act, 1961

--Exemption under section 10(23)(iv)--Educational institution Fees from coaching classes by assessee--Assessee had been incorporated by virtue of section 3 of ICAI Act, 1949 as a body corporate which is constituted by all members whose names are entered in register of members maintained under the ICAI Act. Since incorporation assessee had considered as having been formed for charitable purpose as defined under section 2(15). Declaration that assessee was entitled to exemption under section 10(23C)(iv) subject to fulfillment of certain conditions has been notified by Income Tax authorities from time-to-time until assessment year 2005-06. Thereafter, benefit of exemption under section 10(23C)(iv) was denied on the ground that activity undertaken by assessee of providing coaching to students amounts to carrying on business and liable to be treated as business income. As assessee was not maintaining separate books with respect to activity of coaching. Assessing officer denied assessee's claim under section 11. Assessing officer further held that assessee had violated section 13(1)(d) also as certain sum was outstanding against, ICAI Research Foundation in books of assessee. However, for assessment years 2006-07 and 2007-08 High Court allowed exemption to assessee under section 10(23)(iv)/11 and remanded issue to DIG (Exemption) and however, DIG(E) again rejected assessee's claim under section 10(23)(iv). Further, for assessment year 2008-09 assessing officer allowed exemption under section 11 to assessee holding that its objection were charitable in nature. Further, DIG (Exemption) has also noted that conducting of coaching classes by assessee was clearly fall under proviso to section 2(15) as inserted with effect from 1-4-2009 and assessee was indulged in business trade and commerce. Held: Not justified. After going through provisions of ICAI Act and Regulations framed therein as well as various activities carried out by assessee, assessee institution does not carry any business, trade or commerce. Activity of imparting of education in the field of accountancy and conducting courses both at pre-qualification and post qualification level are activities in furtherance of objects for which assessee had been constituted. Activity of providing coaching classes or undertaking campus placement interviews for a fee were in relation to main object of assessee which cannot be held as trade, commerce or business. Assessee was thus, entitled to exemption under section 10(23C)(iv).

Indisputably, substantial activity of the petitioner institute revolves around providing education to students for the purposes of feeding the profession of Chartered Accountancy in India. It is only those students who successfully undergo the courses conducted by the petitioner who are eligible to practice the profession of a Chartered Accountant in India. The special programmes also include providing coaching classes to students to enable them to attain the requisite level of proficiency in various subjects forming the course as approved by the petitioner. This Court in the case of Institute of Chartered Accountants of India v. Director General of Income Tax (Exemptions) (supra) while disposing of writ petition No. 1927/2010 and remanding the matter to the respondent DGIT (E) also held that the petitioner was providing education and the conduct of the courses by the petitioner could not be equated or categorized as coaching classes conducted by private institutions for students to appear in entrance examination or for pre-admission in examinations being conducted by universities and other Institutions. This court further held that a private coaching institute does not have any statutory or regulatory duty to perform and in this aspect, the case of the petitioner was different and the activities undertaken by the petitioner satisfied the term 'education. [Para 42] Given the aforesaid findings, the issue whether the petitioner was entitled to exemption under section 10(23C)(iv) prior to 1-4-2009 is no longer res integra and the said issue stands concluded in favour of the petitioner as its activities fell within the definition of 'charitable purpose' as it existed prior to 01-04-2009. The only question that remains to be considered is whether the activities of the petitioner fall in the proviso to section 2(15) as introduced with effect from 1-4-2009. [Para 45] The first proviso to section 2(15) carves out an exception which excludes advancement of any other object or general public utility from the scope of charitable purpose to the extent that it involves carrying on any activity in the nature of trade, commerce or business or any activity of rendering certain services in relation to any trade, commerce or business, for a cess or fee or any other consideration is irrespective of the nature of the use or obligation, or retention of the income from such activity. [Para 46] This court on the earlier occasion had considered the entire controversy and after elucidating the legal principles had remanded the matter to the respondent for a limited purpose for considering and examining the submissions made by the petitioner with regard to the expenses incurred by the petitioner and for answering the question whether the petitioner was carrying on any business, trade or commerce in the light of the observations and finding made by this court in its judgment The Institute of Chartered Accountant of India v. Director General of Income Tax (Exemption). This court had remanded the matter, inter alia, on the grounds that the figures with respect to the fee charged, expenditure and profits had been disputed by the petitioner institute. From the impugned order that DGIT (E) has failed to follow the legal principles and the observations made by this court while remanding the matter. The DGIT(E) was required to consider the submissions made by the petitioner which had been quoted by this court while remanding the matter and are quoted hereunder for convenience. [Para 47] In addition, the DGIT(E) was also required to examine the facts relating to the funds paid by the petitioner institute to Jaipur Development Authority and the Government of Rajasthan which had been reflected as debit balance against ICAI Accounting Research Foundation. ICAI Accounting Research Foundation had been incorporated by the petitioner institute with the object to impart training, promote knowledge, learning and education in various fields relating to accountancy and the funds paid by the petitioner were for the purposes of establishing a university in Rajasthan. In the impugned order, the DGIT (E) has not given any finding that the funds paid by the petitioner institute violate section 13. [Para 48] On remand, the DGIT (E) has passed the impugned order dated 13-04-2012, holding that the petitioner's activity of conducting classes is purely a commercial activity. The DGIT (E) has proceeded on the basis that the functions of ICAI are similar to the functions performed by UPSC and held that the position of ICAI, in providing coaching classes to its students was similar to the position of private organisations imparting similar training to the aspirants. [Para 49] The DGIT (E) held that the petitioner institute had received fees for holding interviews with respect to campus placement program and this also amounted to the petitioner working as a service provider between the members and the industry and were similar to the activities undertaken by any placement agency providing manpower to the industry. [Para 50] The DGIT (E) further held that the petitioner's contention that it was charging very nominal fee could not be considered as a charitable purpose as there was no specific arrangement for poor or needy candidates to get coaching from the institute without payment of fees. The DGIT (E) held that in order to fall within the definition of charitable purpose under the Act, it was necessary that the welfare and interest of public and specially poor section of the public be taken care of and since the fees structure of the petitioner institute remained the same for all categories of students and no arrangement was made by the petitioner institute for providing free coaching or coaching at concessional rate to poor section of the society, the petitioner could not be stated to be involved in charity. The DGIT(E) vide impugned order held that the ratio of the decision of the Patna High Court in the case of Bihar Institute of Mining and Mine Surveying v. CIT1994 TaxPub(DT) 865 (Pat-HC): (1994) 208 ITR 608 (Patna) securely covered the facts of the petitioner institute and therefore, the petitioner was liable to be taxed as a commercial establishment. [Para 51] It is found that the entire approach of the DGIT (E) in passing the impugned order is erroneous and runs contrary to the findings and observations of this court while remanding the matter to D GIT(E). This court held that the petitioner institute fell within the category of advancement of any object of general public utility. As such the petitioner would be an institution established for charitable purposes unless it is excluded by the application of the first proviso to section 2(15). The first proviso carves out an exception and excludes advancement of any object of general public utility from the ambit of charge to the extent any activity is carried on 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 or a fee or any other consideration. This court had while remanding the matter examined in detail the meaning of the terms trade, commerce and business and directed the DGIT (E) to apply the said principles. The private coaching concerns did not have a statutory or regulatory duty to perform and thus, coaching classes being provided by the petitioner could not be categorised as mere coaching classes conducted by a private institute. This court had set aside the order dated 19-05-2009 passed by D GIT (E) wherein reliance had been placed on the decision of Patna High Court in the case of Bihar Institute of Mining and Mine Surveying (supra). However, despite an express finding of this court that the said decision was not applicable to the facts of the present case, The D GIT (E) has proceeded to hold to the contrary. It is, thus, apparent that D GIT (E) has failed to comprehend the decision or the directions of this court while remanding the matter. [Para 53] After discussing various decisions with regard to the scope of the words trade, commerce & business, this court in the Institute of Chartered Accountant of India v. Director General of Income Tax (Exemption) (supra) held that while construing the term business for the purpose of section 2(15) the object and purpose of the section must be kept in mind and a broad and extended definition of business would not be applicable for the purpose of interpreting and applying the first proviso to section 2(15). [Para 57] This court while remanding the matter quoted the relevant passages from the decisions of the Supreme Court in the case of Raipur Manufacturing Co. (supra) and Sai Publication Fund (supra) and held that the test as prescribed in the said decisions can be applied to determine whether the petitioner institute was carrying on any business, trade or commerce. The DGIT (E) has completely ignored the said observations of this court and has proceeded to mechanically hold that the activities of the petitioner institute amounted to carrying on business. This, is completely erroneous. [Para 59] The petitioner institute has been constituted under the ICAI Act with the object to regulate the profession of Chartered Accountants in India and to ensure that the standards of professional knowledge and skill are met and maintained. The activities being undertaken by the petitioner substantially involve imparting education in the field of accountancy in order to ensure that the standards or profession of accountancy are maintained. The petitioner institute is the sole body empowered to conduct or approve a course in the field of accountancy. No other person can conduct any course or award any degree or certificate which indicates a level of proficiency or competence in the field of accountancy similar to that as of a chartered accountant. The activity of petitioner in conducting coaching classes is integral to the activity of the petitioner institute in conducting the courses in accountancy. [Para 60] The coaching classes being conducted by the petitioner cannot be equated with private coaching classes being conducted by organisations on commercial basis for preparing students to undertake entrance or other examinations in various professional courses. The coaching carried on by private organisations are not integral to the courses being conducted by them but for preparing students for examinations being conducted by other institutes and universities. In the case of the petitioner institute, the coaching classes are integral to the curriculum of the programme being conducted by the petitioner institute. [Para 61Para 62] This Court is also unable to agree with the reasoning of the D GIT (E) that holding interviews for a fee for the purposes of campus placement of its students amounts to carrying on a business. Campus placement is only a small incidental activity carried on by the petitioner institute like several other universities for placement of their students in gainful employment. This too is an activity ancillary to the educational programme being conducted by the petitioner institute and cannot be considered as a business being carried on by a placement agency. The object of the petitioner institute is not to carry on such business but to assist its students in securing employment. In this case, the object with which the activity of campus placement is carried on would determine its nature and the same is not business, trade or commerce. [Para 63] The reasoning of the D GIT (E) that since the petitioner institute charges a uniform fee from all students for providing coaching classes, thus, it cannot be said to be carrying on a charitable activity is also erroneous. It is now well settled that an eleemosynary is not an essential element of charitable purpose as defined under the Act. It is not necessary that a person should give something for free or at a concessional rate to qualify as being established for a charitable purpose. If the object or purpose of an institution is charitable, the fact that the institution collects certain charges does not alter the character of the institution. [Para 64] The fact that the petitioner institute charges a uniform fee from all students for coaching would not exclude the petitioner from the ambit of section 2(15) unless it is found that the petitioner falls within the scope of the first proviso to section 2(15), i.e., the petitioner carries on any trade, business or commerce or any activity of rendering any service in relation to any trade, commerce or business, for a cess or a fee. [Para 65] As stated earlier the matter was remanded to DGIT (E) to consider the submissions of the petitioner that it had been incurring administrative expenses which were much greater than the surplus and that had resulted due to the coaching provided to the students. Having erroneously come to the conclusion that the petitioner was carrying on business, the DGIT (E) has rejected the submission of the petitioner that its common administrative expenditure exceeded the surplus generated from coaching, as being not relevant. The DGIT (E) has also failed to consider that the activities being pursued by the petitioner are not with the object of earning profit but with the object of imparting knowledge and skill to ensure that Chartered Accountants in India have the requisite skill and professional competence and comprehend the code of ethics to be followed by them. [Para 66] The expressions trade, commerce and business as occurring in the first proviso to section 2(15) must be read in the context of the intent and purport of section 2(15) and cannot be interpreted to mean any activity which is carried on in an organised manner. The purpose and the dominant object for which an institution carries on its activities is material to determine whether the same is business or not. The purport of the first proviso to section 2(15) is not to exclude entities which are essentially for charitable purpose but are conducting some activities for a consideration or a fee. The object of introducing the first proviso is to exclude organizations which are carrying on regular business from the scope of charitable purpose. The purpose of introducing the proviso to section 2(15) can be understood from the Budget Speech of the Finance Minister while introducing the Finance Bill 2008. [Para 67] The expressions business, trade or commerce as used in the first proviso must, thus, be interpreted restrictively and where the dominant object of an organisation is charitable any incidental activity for furtherance of the object would not fall within the expressions business, trade or commerce. [Para 67] In the present case, there can be little doubt that the dominant object of the petitioner institute is to regulate the profession of Chartered Accountants in India and for that purpose, the petitioner institute conducts an extensive educational program to ensure that the profession is fed by Chartered Accountants having high standards of knowledge, skill and professional competence. Coaching classes conducted by the petitioner are also in aid of its objects. [Para 68] In the present case, there is little doubt that the objects of the activities of the petitioner are entirely for charitable purposes. [Para 70] Although, it is not essential that an activity be carried on for profit motive in order to be considered as business, but existence of profit motive would be a vital indicator in determining whether an organisation is carrying on business or not. In the present case, the petitioner has submitted figures to indicate that expenditure on salaries and depreciation exceeds the surplus as generated from holding coaching classes. In addition, the petitioner institute provides study material and other academic support such as facilities of a library without any material additional costs. [Para 71] There is nothing on record to indicate the assertion of the petitioner that its activities are not fuelled by profit motive is incorrect. Absence of profit motive, though not conclusive, does indicate that the petitioner is not carrying on any business. [Para 72] The petitioner institute has been established to perform a function of regulating the profession of Chartered Accountants. The functions performed by the petitioner institute are in the genre of public welfare and not for any private gain or profit and in this view, it cannot be said that the petitioner is involved in carrying on any business, trade or commerce. [Para 73] After going through the provisions of the ICAI Act and the Regulations framed therein as well as various activities carried on by the petitioner, the petitioner institute does not carry on any business, trade or commerce. The activity of imparting education in the field of accountancy and conducting courses both at pre-qualification as well as post-qualification level are activities in furtherance of the objects for which the petitioner has been constituted. Activities of providing coaching classes or undertaking campus placement interviews for a fee are in relation to the main object of the petitioner which as cannot be held to be trade, business or commerce. Accordingly, even though fees are charged by the petitioner institute for providing coaching classes and for holding interviews with respect to campus placement, the said activities cannot be stated to be rendering service in relation to any trade, commerce or business as such activities are undertaken by the petitioner institute in furtherance of its main object which are not trade, commerce or business. [Para 77] Revenue has not found any violation of section 13. Tribunal also notice that D GIT (E) has not found any violation of section 13 in the impugned orders. Further, it has also not been contended that the petitioner has violated section 13. Thus, this dispute also stands concluded in favour of the petitioner. [Para 79] In view of the above, these all writ petitions are allowed and set aside the two impugned orders dated 13-04-2012 and 28-09-2012 passed by the respondent D GIT (E) and further direct DGIT(E) respondent to recognise the petitioner as eligible under section 10(23C)(iv) as an institution established for charitable purposes having regard to its object and importance for the assessment years 2006-2007, 2007-2008, 2008-2009, 2009-2010, 2010-2011 and 2011-2012, subject to the petitioner complying with the other provisions of the Act. [Para 80]