C.A. No. 000783 / 2020
The proviso to Section 2(15) of the Income Tax Act, 1961, introduced w.e.f. 01.04.2009, disqualifies an entity from claiming tax exemption under the "advancement of any other object of general public utility" category only when its predominant activity involves trade, commerce, or business for a consideration; the nature or application of the income earned is irrelevant to this determination. Statutory bodies, regulatory authorities, and entities whose receipts are intrinsically linked to their public mandate — rather than commercial activity — may still qualify as charitable, provided the profit motive does not pervade their functions. This analysis, available on casestatus.in, further clarifies that the proviso applies a purpose-and-activity test, not a mere receipt-based test.