"Section 10. Incomes not included in total income: In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- ........... (23C) any income received by any person on behalf of - ..... (iv) any other fund or institution established for charitable purposes which may be approved by the prescribed authority, having regard to the objects of the fund or institution and its importance through out India or through out any State or States; or ..........." 15. Section 2 (15) as amended by Finance (Nos.2) Act, 2009 is as follows: "(15) "charitable purpose" includes relief of the poor, education, medical relief, {preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest,} and the advancement of any other object of general public utility: Provided 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 or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity:"= rejecting the application dated 22-03-2010 filed for approval under Section 10 (23) (C) of the Income Tax Act, 1961 (for short "the Act") for the assessment year 2010-11.- we hold that the 1st respondent had rightly rejected the application of the petitioner for approval under Section 10 (23C) (iv) of the Act on the ground that the petitioner has not rendered its services directly to the farmers but is rendering its services directly to its clients/agents who are engaged in trading of the certified seeds with profit motive and therefore its activities are not for the "advancement of any other object of general public utility" and hence not for "charitable purpose" in view of second limb of the first proviso to Section 2 (15) of the Act.

HONOURABLE SRI JUSTICE GODA RAGHURAM
AND HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO

W.P.No.31640 of 2011

17.12.2012

Andhra Pradesh State Seed Certification Agency, Hyderabad

The Chief Commissioner of Income Tax-III, Hyderabad and two others

Senior Counsel for the Petitioner: Sri A.V.Krishna Koundinya

Standing Counsel for Respondents: Sri J.V.Prasad

<GIST:

>HEAD NOTE:  

? Cases referred
1 M/s.New Noble Education Society Vs.
The Chief Commissioner of Income Tax-I
2 (2011) 336 ITR 641 AP
3 (2012) 347 ITR 86
4 (2012) 347 ITR 99
5 2011 (42) VST 365 (SC)
6 (2010) 329 ITR 404 (Kerala)
7 (2005) 4 S.C.C. 272
8 (1996) 1 S.C.C. 108
9 (1976) 105 ITR 92 (SC)
10 (1994) Supp (3) S.C.C. 615
11AIR 1952 SC 368

ORDER
(per Hon'ble Sri Justice M.S.Ramachandra Rao)
        The petitioner herein challenges the order dated 31-03-2011 of the Chief
Commissioner of Income Tax, Hyderabad-III (1st respondent), rejecting the
application dated 22-03-2010 filed for approval under Section 10 (23) (C) of the
Income Tax Act, 1961 (for short "the Act") for the assessment year 2010-11.
2. The petitioner is the Andhra Pradesh State Seed Certification Agency, a
society registered in 1976 under the AP (Telangana Areas) Public Societies
Registration Act, 1350 Fasli with registration No.334 of 1976 as per Certificate
of Registration dated 22-04-1976. As per its Memorandum of  Association, the
following are its objects:
"(a) to see that cultivators adopt all scientific methods for production of
quality seed in accordance with the Seed Act.
(b) to recognize varieties (and kinds where improved varieties are not
available) eligible for seed certification and publish annually lists indicating
the names of such varieties and kinds.
(c) to maintain a list of sources of breeder and foundation seeds approved by
the Central Seed Certification Board in the case of variety grown in more than
one State and by the State Seed Certification Board in the case of varieties of
local importance.
(d) to verify upon receipt of an application for certification that the variety
is eligible for certification that the application has been submitted in
accordance with the procedure prescribed by the State Seed Certification
Governing Board and that the source of seed used for planting is from approved
sources.
(e) to provide for the inspection of a seed fields, seed processing plants and
seed lots in accordance with the procedures outlined by the Central Seed
Certification Board.
(f) to ensure that the seeds certified in the State conform to the Standards
prescribed by the Central Seed Certification Board.
(f) to grant certificates, certification tags and seals etc., designed as per
specifications provided by the Central Seed Certification Board and as per
procedure by the State Seed Certification Governing Board.
(h) to carry out educational programmes designed to promote the use of certified
seed including a publication listing co-operators in the seed certification
programme and source of certified seed and provide such information to the
Central Seed Certification Board and to publicise the same."
3. The petitioner is established to act as a  certification agency under Section
8 of the Seeds Act, 1966 and it certifies seeds which meet the  minimum seed
certification standards as per the Indian Minimum Seeds Certification Standards,
1988. It is asserted by the petitioner that its basic duty is to see that
quality seeds are supplied to agriculturists; that it is a non profit, self
sustaining organization created by the Government and is surviving on the
certification charges levied for the technical and scientific services rendered
by it to the seed producers/growers and agriculturists.
4. It is the contention of the petitioner that that it filed application in Form
No.56 dated 08-03-2010 along with all necessary enclosures on 22-03-2010  before
the Director of Income Tax (Exemptions) seeking renewal of approval under
Section 10 (23C) (iv) of the Act for the assessment year 2010-11; that the
Deputy Commissioner of Income Tax (H.Qrts), Office of Chief Commissioner of
Income Tax, Hyderabad-III issued a notice dated 13-01-2011 seeking some
clarification and also the details of accumulated amount during the previous
five years; that the petitioner furnished the details sought, by replies dated
07-02-2011 and 11-02-2011; that another notice dated 08-03-2011 was issued by
the Income Tax Officer (H.Qrs.) asking the petitioner to furnish audited
accounts for the financial year 2009-10 relevant for the assessment year 2010-
11; the petitioner furnished the details by replies dated 24-03-2011 and
28-03-2011; and by order dated 31-03-2011, the Chief Commissioner of Income Tax-
III rejected the petitioner's application on the following grounds:
"(i) that the activities of the agency were/are not in the nature of advancement
of any objects of general public utility.
(ii) that the objects of the agency do not indicate any charitable activity or
involve the advancement of any other objects of general public utility.
(iii) that the words or phrase 'charitable purpose' or 'public utility' do not
find place in the objects of the agency.
(iv) that the agency is not carrying out its activities for any charitable
purposes which is the basic requirement to be satisfied in terms of section 10
(23C) (iv) of the Act.
(v) that the agency is not registered under the provisions of the Andhra Pradesh
Charitable and Hindu Religious Institutions and Endowments Act, 1987."
5. Challenging the said order, the petitioner has filed the present writ
petition.
6. The petitioner contends that that it has been filing income tax returns
claiming exemption under the provisions of  the Act as it is existing solely for
charitable purposes; that such approval/exemption was granted under Section 10
(23C) (iv) for the assessment years 1984-85 to 1988-89, 1989-90 to 1991-92,
1992-93 to 1994-95 and 1995-96 to 1997-98; that the petitioner had suffered
losses for the period 1998-99 to 2004-05 and therefore there was no need for
claiming exemption for the said period and it did not file any application
seeking approval/exemption for that period.  It contended that with effect from
22-08-2003, it was granted registration under Section 12-AA of the Act vide
proceedings of the Director of Income Tax (exemptions) dated 01-01-2004 for the
purposes of Sections 11 and 12 of the Act; and that the action of the 1st
respondent in rejecting the application of the petitioner for approval under
Section 10 (23C) (iv) of the Act is arbitrary, illegal and violative of the
provisions of the Act.
7. Petitioner contended that the 1st respondent erred in holding that the
petitioner is not a public charitable institution; that the fact that the
petitioner is not registered under Section 43 of the AP Charitable and Hindu
Religious Institutions and Endowments Act, 1987 cannot be a ground to deny
exemption under Section 10 (23C) (iv) of the Act; that the 1st respondent
ignored the fact that the petitioner was established by the State Government to
carry out the functions of a Certification Agency under the Seeds Act, 1966 in
terms of G.O.Ms.No.435 Food and Agriculture (EP-II) Department dated 01-06-1977
and the provisions of the A.P. Charitable and Hindu Religious Institutions and
Endowments Act, 1987 have no application at all; that the 1st respondent erred
in holding that the petitioner has not rendered its services directly to the
farmers but only to its clients/agents who are engaged in trading of certified
seeds with profit motive and hence the activities of the petitioner are not for
the advancement of any other object of general public utility and so are not for
charitable purpose; that the 1st respondent erred in holding that the provisions
of Section 10 (23C) (iv) of the Act would apply to an institution only if it is
existing for charitable purposes and if there is no charity involved, it would
mean that the institution is being run for profit;  that the petitioner was
granted approval under Section 10 (23C) (iv) of the Act for the earlier years by
the Government of India and the Central Board of Direct Taxes and as there is no
change in the activities of the petitioner since its inception, the 1st
respondent erred in rejecting the application of the petitioner for exemption
under Section 10 (23C) (iv) of the Act.
8. Counter affidavit was filed on behalf of the 1st respondent refuting the
above contentions and contending that he had passed a reasoned order on the
issue whether the objects of the petitioner-agency are for a charitable purpose
or not by carefully analyzing the financial accounts for the financial year
2009-10; that the activities of the petitioner do not indicate involvement of
any charitable activity or advancement of any other objects of general public
utility; that the requirement of registration under Section 43 of the AP
Charitable and Hindu Religious Institutions and Endowments Act, 1987 was held to
be relevant by the Andhra Pradesh High Court in its order dated
11-11-2010 in W.P.No.21248 of 2010 and batch1  wherein the High Court had held
that the term "education" is covered by the definition of "charitable purpose"
under Section 2 (15) of the I.T.Act and also covered under the AP Charitable and
Hindu Religious Institutions and Endowments Act, 1987, that the Chief
Commissioner of Income Tax was justified in not granting approval under Section
10 (23C) (iv) of the Act on the ground that the petitioner institutions therein
were not registered under the AP Charitable and Hindu Religious Institutions and
Endowments Act, 1987.  He also contended that the activities of the petitioner
indicate that seed growers enter into a contract with some Society/Agent, who
then approach the petitioner for certification and as such the direct
beneficiaries of the activities  of the petitioner are not the farmers but those
who sell  the certified seeds to the farmers at a market price determined by
them; that the over all functioning of the petitioner is akin to a corporate
profit earning service provider; that even the objects of the petitioner show
that it is engaged in certifying the varieties of seeds grown by the clients who
finally carry out trade or commerce  in the certified seeds; that the objects of
the petitioner either individually or in combination do not indicate that the
petitioner provides services directly to the farmers or makes any direct sale of
certified seeds to the farmers or exercises any control over the fixation of the
price by the clients who get the certification and carry out the trade in
certified seeds and therefore the application of the petitioner was rightly
rejected by him under the impugned order.
9. Heard Sri A.V.Krishna Koundinya, learned Senior Counsel for the petitioner
and Sri J.V. Prasad, learned Standing Counsel for the respondents.
10. The counsel for the petitioner reiterated the contentions stated in the
affidavit filed in support of the writ petition  and relied upon the following
documents:
i) The provisions of the Seeds Act, 1966.
ii) Note on petitioner's activities
iii) Extracts from Official Hand book on Seed Certification (Central Seed
Certification Board, Ministry of Agriculture & Rural Reconstruction, Govt. of
India).
iv) G.O.Ms.No.372 issued by Food & Agriculture (EP-II) Department, Govt. of
Andhra Pradesh.
v) Memorandum of Association.
vi) Certificate of Registration No.334 of 1976.
vii) G.O.Ms.No.435 issued by Food & Agriculture (EP-II) Department, Govt. of
Andhra Pradesh.
viii) Notification No.79 issued by Food &          Agriculture (EP-II)
Department, Govt. of          Andhra Pradesh.
ix)   Rules of petitioner society
x) Memorandum No.18-6/81-SD issued by Government of India, Ministry of
Agriculture (Dept. of Agriculture & Co-operation), New Delhi.
xi) Memorandum No.18-2/85-SD.IV issued by Government of India, Ministry of
Agriculture & Rural Development, (Dept. of Agriculture & Co-operation), New
Delhi.
xii) D.O.No.18-10(1)96-SD.IV issued by Government of India, Ministry of
Agriculture (Dept. of Agriculture & Co-operation), New Delhi. Along with Minutes
of the 13th Meeting of SCCB.
xiii) Lr.No.18-10(i)/96-SD.IV issued by Government of India, Ministry of
Agriculture (Dept. of Agriculture & Co-operation), New Delhi.
xiv) Lr.No.18-9,'96-SD.IV issued by Government of India, Ministry of Agriculture
(Dept. of Agriculture & Co-operation), New Delhi.
xv) Statement showing the Revenue & Expenditure for the Financial year 2009-10
along with Crop-wise Revenues calculated for the Crop year 2009-10 separately.

11. He also relied upon the judgment in Commissioner of Income Tax Vs.
Agricultural Market Committee2, Director of Income Tax (Exemptions) Vs.
Institute of Chartered Accountants of India3 and Institution of Chartered
Accountant of India Vs. The Director General of Income Tax (Exemptions)4.
12. Sri J.V. Prasad, learned Standing Counsel for the Income Tax Department,
supported the order of the 1st respondent and relied upon the decisions in State
of UP Vs. Mahindra and Mahindra5, Info Parks, Kerala Vs. Deputy Commissioner of
Income Tax and Another6, Tata Iron and Steel Company Vs. State of Jharkhand7,
State Level Committee Vs. Morgardshammar8, Controller of Estate Duty Vs.
Kantilal9 and Director of Inspection and Audit Vs. C.L.Subramaniam10.  He also
relied upon the Memorandum  explaining the provisions of the Finance Bill, 2008
and the budget speech of the Minister of Finance on 29-02-2008 while proposing
amendment to the term "charitable purpose" defined in Section 2 (15) of the
Income Tax Act which was subsequently passed by the Parliament vide the Finance
(No.2) Act, 2009 (Act 33 of 2009) by Section 3 (a) (with retrospective effect
from 01-04-2009.  In the said speech, it was observed by the Minister of Finance
that "charitable purpose" includes relief of the poor, education, medical relief
and any other object of general public utility.  These activities are tax
exempt, as they should be.  However, some entities carrying on regular trade,
commerce or business or providing services in relation to any trade, commerce or
business and earning incomes have sought to claim that their purposes would also
fall under "charitable purpose".  Obviously, this was not the intention of
Parliament and, hence, I propose to amend the law to exclude the aforesaid
cases.  Genuine charitable organizations will not in any way be effected."
A
proviso to clause (15) of Section 2 of the Income Tax Act, 1961 which defines
the term "charitable purpose" to the following effect was added by way of
amendment:  
"(15) "charitable purpose" includes ...
 Provided 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
or fee or any other consideration, irrespective of the nature of use or
application, or retention, of the income from such activity:"
He contended that on a true interpretation of Section 10 (23C) (iv) read with
Section 2 (15) (as amended by the Finance (No.2) Act, 2009) clearly indicates
that the petitioner's activity of certification of seeds is a service "in
relation to any trade, commerce or business" as the petitioner facilitates
trade, commerce or business by its clients/agents in the certified seeds and
therefore the petitioner was rightly denied the benefit of the exemption.
13. We have noted the contentions of both parties.
14. Before dealing with the respective contentions, we propose to take note of
Section 10 (23C) (iv) of the Act and Section 2 (15) of the Act.
"Section 10.  Incomes not included in total income:
In computing the total income of a previous year of any person, any income
falling within any of the following clauses shall not be included-
...........
(23C) any income received by any person on behalf of -
.....
(iv) any other fund or institution established for charitable purposes which may
be approved by the prescribed authority, having regard to the objects of the
fund or institution and its importance through out India or through out any
State or States; or ..........."
15. Section 2 (15) as amended by Finance (Nos.2) Act, 2009 is as follows:
"(15) "charitable purpose" includes relief of the poor, education, medical
relief, {preservation of environment (including watersheds, forests and
wildlife) and preservation of monuments or places or objects of artistic or
historic interest,} and the advancement of any other object of general public
utility:
Provided 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
or fee or any other consideration, irrespective of the nature of use or
application, or retention, of the income from such activity:"
16. A reading of the above provisions of the Income Tax Act show that income
received by any person on behalf of an institution established for "charitable
purpose" (as defined in Section 2 (15) of the Act) which may be approved by the
prescribed authority alone would be excluded from the total income of a previous
year of such person under Section 10 (23C) (iv) of the Act.  While under the
main part of Section 2 (15) activities which involve relief of the poor,
education, medical relief, preservation of environment (including water sheds,
forests and wild life) and preservation of monuments or places or objects of
artistic or historic interests, would automatically come within the purview of
"charitable purpose", activities which advance "any other object of general
public utility" would qualify only if such activity does not involve:
i) carrying on of any activity in the nature of trade,
                commerce or business;
ii) any activity of rendering any service in relation
                 to any trade, commerce or business.
17. Section 8 of the Seeds Act, 1966 empowers the State Government or the
Central Government in consultation with the State Government to establish, by
notification in the official gazette, a certification agency for the State to
carry out the functions entrusted to the certification agency by or under the
Seeds Act.  The petitioner was registered under the Andhra Pradesh (Telangana
Area) Public Societies Registration Act, 1350 Fasli with registration No.
334/76.  By G.O.Ms.No.435 Food and Agriculture (EP-II) Department dated 01-06-
1977, the State Government approved the proposal of the Director of Agriculture
and  directed that the petitioner shall carry on the functions of the
certification agency under the Seeds Act, 1966 in the Andhra Pradesh State with
effect from 01-06-1977.  The objects of the petitioner have already been set out
above.  The petitioner thus certifies the Seeds which meet the minimum seeds
certification standards as per Indian Minimum Seed Certification Standards,
1988. Seed growers enter into contract with a society/agent, who approaches the
petitioner for certification of the seeds and after securing certification, they
sell the certified seeds to the farmers at a market price determined by them.
The petitioner collects a fee for providing certification as the process of
certification involves technical and scientific evaluation of the seeds although
the fee collected by it would be enough to enable it to sustain its activities
and may not result in much profit. The term "advancement of any other object of
general public utility" used in Section 2 (15) of the Act includes all objects
to promote the welfare of the public particularly when the object is to promote
or protect the interest of a particular trade or industry.  The activity of the
petitioner which facilitates sale of certified seeds to farmers therefore falls
within "advancement of any other object of general public utility" included in
the definition of the term "charitable purpose" as defined in Section 2 (15) of
the Act but in view of the fact that certification of seeds by the petitioner
facilitates trade, commerce or business in the certified seeds by the client of
the petitioner, the proviso to the said section would come into operation.  Thus
the petitioner's activity assists the sale of certified seeds and is "in
relation to any trade, commerce or business" and therefore its activity cannot
be held to be a "charitable purpose".    In this view of the matter, we hold
that the 1st respondent rightly rejected the application of the petitioner for
approval under Section 10 (23C) (iv) of the Act.
18. In the case of Agricultural Market Committee
(2 supra), this Court held that an Agricultural Market Committee established
under the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966
is an institution established for "charitable purpose" entitled to be registered
under Section 12A and 12AA of the I.T.Act and their income from property is not
to be included in the total income of the previous year under Section 11 of the
Act.  After considering the provisions of the Act, the Division Bench of this
Court held that the Agricultural Market Committees are constituted under the
above Act for the sole purpose of protecting the interest of agriculturists,
farmers and growers, that the purpose of the said Act is to enable purchasers to
get a fair price for the commodities by eliminating middleman and provide
regular market with all necessary facilities, that the income of the market
committee from different sources is derived without any profit motive and is
used to meet the expenditure for providing market facilities.  In our view the
said decision has no application to the present case and was based upon an
interpretation of the various provisions of the Andhra Pradesh (Agricultural
Produce and Livestock) Markets Act, 1966 and the attention of the Division Bench
does not appear to have been drawn to the proviso to Section 2 (15) of the I.T.
Act more particularly the portion "any activity of rendering any service in
relation to any trade, commerce or business, for a cess or fee or any other
consideration..........".  Since agricultural market committees render services
"in relation to trade, commerce or business" by facilitating trade in
agricultural commodities by farmers/growers of agricultural produce or
livestock, we are of the opinion that the activity of agricultural market
committee may not come within the ambit of "charitable purpose".
19. The counsel for the petitioner submits that the petitioner is itself not
engaging in any activity which is in the nature of trade, commerce or business
and therefore it has to be held to be an agency whose activities are for
"charitable purpose" under Section 2 (15) of the Act and therefore entitled to
the benefit under Section 10 (23C) (iv) of the Act.  The contention of the
petitioner's counsel if accepted would mean that the words "any activity of
rendering any service in relation to any trade, commerce or business" in the
first proviso to Section 2 (15) of the Act have to be ignored.  This is not
permissible because the High Court cannot substitute or ignore the wording in a
provision in a statute. In Aswini Kumar Bose v. Arabinda Ghose 11,the Supreme
Court held that it is not a sound principle of construction to brush aside words
in a statute as being inapposite surplusage, if they can have appropriate
application in circumstances conceivably within the contemplation of the
statute. In Mahindra and Mahindra's case (5 supra), the Supreme Court held that
the High Court cannot substitute the language in a statute or subordinate
legislation.
20. The Memorandum explaining the provisions in the Finance Bill, 2008 and the
budget speech of the Minister of Finance for 2008-2009 delivered on 29-02-2008
extracted above clearly indicate that the first proviso  to Section 2 (15) as
extracted above was introduced by the Finance (Nos.2) Act, 2009 with effect from
01-04-2009  to exclude entities carrying on regular trade, commerce or business
or providing services in relation to any trade, commerce or business and earning
incomes from claiming to be engaged in activities for "charitable purpose".
21. The Kerala High Court in Info Parks Kerala's case (5 supra) took note of the
above events and held as follows:
"Yet another important aspect to be noted in this context is that, after the
amendment by incorporating a proviso to Section 2(15), the fourth limb as to the
advancement of "any other object of general public utility" will no longer
remain as charitable purpose, if it involves carrying on of:
(a) any activity in the nature of trade, commerce or business;
(b) any activity of rendering any service in relation to any trade, commerce or
business for a cess or a fee or any other consideration, irrespective of the
nature of use or application or retention of the income from such activity.
The first limb of exclusion from charitable purpose under clause (a) will be
attracted, if the activity pursued by the institution involves any trade,
commerce or business. But the situation contemplated under the second limb
[clause (b)] stands entirely on a different pedestal, with regard to the service
in relation to the trade, commerce or business mentioned therein. To put it more
clear, when the matter comes to the service in relation to the trade, commerce
or business, it has to be examined whether the words "any trade, commerce or
business" as they appear in the second limb of clause (b) are in connection with
the service referred to the trade, commerce or business pursued by the
institutions to which the service is given by the assessee. If the said words
are actually in respect of the trade commerce or business of the assessee
itself, the said clause (second limb of the stipulation under clause (b) is
rather otiose. Since the activity of the assessee involving any trade commerce
or business, is already excluded from the charitable purpose by virtue of the
first limb (clause (a)) itself, there is no necessity to stipulate further, by
way of clasue (b), adding the words "or any activity of rendering any service in
relation to any trade, commence or business.
As it stands so, giving a purposive interpretation to the statute, it may have
to be read and understood that the second limb of exclusion under clause (b) in
relation to the service rendered by the assessee, the terms "any trade, commerce
or business refer to the trade, commerce or business pursued by the recipient to
whom the service is rendered (as there may be a situation involving letting out
the premises for purposes other than involving trade, commerce or business as
well)."
22. We endorse the said view of the Kerala High Court in the above case and we
respectfully follow the same.
23. In the case of Institute of Chartered Accountants (3 supra), the Delhi High
Court had taken the view that the activity of conducting coaching classes by the
said institute was  not enough to deprive the institute of approval under
Section 10 (23C) of the Act and the matter was remitted to the Income Tax
Department to consider the matter whether the institute carried on business or
not when its primary and dominant activity is to regulate the profession of
chartered accountancy and to consider the application of the proviso of Section
2 (15) of the Act introduced with effect from 01-04-2009.  Although there is
discussion in this case and also the other case
(4 supra) on the subject, there is no finality attached to the above issue as in
both cases the matter was remitted to the department to consider the application
of the said institute for approval under Section 10 (23C) (iv) of the Act.
Therefore they are of no assistance to the petitioner.
24. We are also of the view that the decision of this Court in New Noble
Education Society's case (1 supra)  is not applicable as the said decision
relates to educational institutions claiming exemption under Section 10 (23C)
(vi) of the Act and the provisions of Section 2 (15) of the Act were only
referred to incidentally to hold that Section 2 (15) is wider in terms than
Section 10 (23C) (vi) of the Act and that if the assessee's case does not fall
within Section 2 (15) of the Act, it is difficult to consider the assessee as
coming under Section 10 (23C) (vi) of the Act.  It is also observed that a
certificate signed by the Commissioner of Endowments under Section 43 of the AP 
Charitable and Hindu Religious Institutions and Endowments Act, 1987 is only one
of the factors but not conclusive proof that an assessee is a charitable
institution existing solely for the purpose of education.  On an appreciation of
the facts relating to each of the petitioners in the said cases, the Court held
that the existence of an educational institution solely for the purpose of
education is a precondition for grant of approval and as the objects of the
societies which were petitioners before the said Bench were not exclusively for
educational purpose but included objects for non-educational purposes, the Chief
Commissioner cannot be faulted for rejecting the applications seeking approval
under Section 10 (23C) (vi) of the Act.  This judgment therefore is of no
assistance to the Revenue.
25. For the above reasons, we hold that the 1st respondent had rightly rejected
the application of the petitioner for approval under Section 10 (23C) (iv) of
the Act on the ground that the petitioner has not rendered its services directly
to the farmers  but is rendering its services directly to its clients/agents who
are engaged in trading of the certified seeds with profit motive and therefore
its activities are not for the "advancement of any other object of general
public utility" and hence not for "charitable purpose" in view of second limb of
the first proviso to Section 2 (15) of the Act.
26. Accordingly, the writ petition is dismissed.  No costs.

____________________________  
 JUSTICE GODA RAGHURAM      
___________________________________    
JUSTICE M.S. RAMACHANDRA RAO      
Date : 17-12-2012