Dr. Satish Chandra, J.This is an appeal filed by the Department u/s 260A of the income tax Act, 1961 against the judgment and order dated 3 1 -07-2009 passed by the income tax Appellate Tribunal, Lucknow in Appeal No. I.T.A. No. 228/Luc/2009. The brief facts of the ease are that assessee i.e. State Urban Development Agency (SUDA) was created on 20th November, 1990 and it was registered as Co-operative Society and became the State Autonomous Body as per the Article of Association. The SUDA i.e. the assessee had applied for the registration u/s 12A of the income tax Act, as charitable institution, but the CIT has refused registration vide order dated 22-05-2007. Being aggrieved, the SUDA i.e. assessee has assailed the same before the Tribunal, who vide order dated 08-02-2008 has restored the matter back to the file of the CIT with certain directions to examine the matter afresh. But, vide his order dated 25-03-2009, again CIT has endorsed his earlier order, where registration u/s 12A of the Act was rejected. Not being satisfied, the assessee again assailed the same before the Tribunal, who vide impugned order has granted the registration. Being aggrieved, the Department has filed the present appeal.

2. With this background, Sri D.D. Chopra, learned counsel for the Department has justified the order passed by the CIT. He states that the genuineness of the accounts were not proved as the accounts of the society were not fully utilized for its objectives and the Auditor General of India had also raised objections regarding utilization/application of funds for "general public utility". The Accountant General (Government of India) while auditing the accounts of the society has specifically commented that the assessee has failed to attain their objectives. It was stated that the expenses were not incurred for the purpose of objects mentioned in the Article of Association. So, the funds were not utilized properly.

3. Learned counsel further submits that the registration u/s 12A of the Act cannot be claimed as a matter of right. It is also a submission of the learned counsel for the appellant that the funds were kept only in the Bank to meet the office expenses. The assessee also did not give any reply to the query raised by the CIT during the course of hearing for the mis-utilization of fund or not properly utilization of the funds. For this purpose, he has relied on the ratio laid down on the following cases:--

(i) Hiralal Bhagwati Vs. Commissioner of Income Tax, ;

(ii) Commissioner Of Income Tax, Madras Vs. Madras Stock Exchange Ltd. And Others., ; and

(iii) DELHI STOCK EXCHANGE ASSOCIATION LTD. Vs. COMMISSIONER OF Income Tax, NEW DELHI., , affirmed by the Honble Supreme Court, Delhi Stock Exchange Association Ltd. Vs. Commissioner of Income Tax, New Delhi, .

Lastly, he made a request to restore the order of the CIT.

4. On the other hand, Sri K.R. Rastogi holding brief of Sri S.K. Garg, learned counsel for the assessee has justified the Tribunals order. At the strength of written submission, learned counsel for the assessee has read out the main objectives of the society, which on reproduction reads as under:--

(a) To identify the urban poor in the state.

(b) To draw up plans and formulate scheme for upliftment of the urban poor in the state.

(c) To implement scheme for the benefit of the urban poor either directly or through other urban local bodies incardination with agencies engaged in this direction, whether private, public or co-operative.

(d) To review the progress of the execution of those activities as well as effectiveness of the benefits directed towards the urban poor.

(e) To set up or establish any specific service such as training facilities, infrastructural support etc. in furtherance of the economic interest of the urban poor.

5. Learned counsel further submits that the objectives of the assessee society are regarding upliftment of urban poors development which clearly falls under the public utility. Thus, the objectives of the society are related to the public utility. The CIT has wrongly rejected the assessees application without considering the main object of the society i.e. public utility. The CIT in the IInd round, has also not followed the direction of the Tribunal and rejected the application of the assessee in an arbitrary manner. For this purpose, he has relied on the ratio laid down in the following cases:--

(a) Ravi Iron Industries Vs. Director of Investigation and Others, ;

(b) Ajay Hasia and Others Vs. Khalid Mujib Sehravardi and Others, ;

(c) Commr. of Income Tax Vs. Gujarat Maritime Board,

(d) CIT v. Lucknow Industrial Development Authority, Lucknow, IT Appeal No. 156 of 2008;

(e) Commissioner of Income Tax Vs. Krishi Utpadan Mandi Samiti,

(f) Commissioner of Income Tax Vs. Improvement Trust,

(g) Ahmedabad Urban Development Authority Vs. Deputy Director of Income Tax (Exemption), ;

(h) U.P. Forest Corporation and Another Vs. Dy. Commissioner of Income Tax, Lucknow,

(i) CIT v. U.P. Forest Corpn. Ltd. IT Appeal No. 70 of 2009;

(j) CIT v. U.P. Forest Corpn. Ltd., SLP (CC) 2590 of 2011;

(k) Fifth Generation Education Society Vs. Commissioner Income Tax, ;

(l) Commissioner of Income Tax Vs. Red Rose School, ; and

(m) The Director of Income Tax Vs. Garden City Educational Trust,

Lastly, he justified the impugned order.

6. We have heard both the parties at length and gone through the material available on record.

7. From the record, it appears that since 1990-91 i.e. when the assessee-society came into existence, it is engaged in the service of public utility.

8. In the instant case, it appears that the registration was refused only on the basis of a report submitted by the Accountant General, where it was mentioned that the accounts were not properly maintained. But this defect is curable. The accounts, management, control etc. of the assessee are fully controlled by the Government of U.P. Thus, doctrine of instrumentality is applicable as per the ratio laid down in the case of Ajai Hasia (supra). Moreover, in the instant case no individual interest is involved.

9. It is also alleged that the funds were not utilized and ideally kept in the Bank. But, it is not the case of the Department that funds were stiffed or misappropriated. For not utilization of the fund and keeping in the Bank, never attracts the cancellation of the registration of the society, however, it may amounts non-functioning of the Society.

10. Needless to mention that the expression "any other object of general public utility" in Section 2(15) of the income tax Act, 1961, is of the widest connotation. That expression would prima facie include all objects which promote the welfare of the general public. It cannot be said that a purpose would cease to be charitable even if pubic welfare is intended to be served. If the primary purpose and the predominant object are to promote the welfare of the general public the purpose would be a charitable purpose, as observed by the Honble Apex Court in the case of Commr. of Income Tax Vs. Gujarat Maritime Board, .

Further, the words "charitable purposes" defined in Section 2(15) of the income tax Act, 1961, include the advancement of any other object of general public utility.

Prior to April 1, 1984, the words used in the section were "advancement of any other object of general public utility not involving the carrying on of any activity for profit". The Finance Act, 1983, omitted the words "not involving the carrying on of any activity for profit" from the section with effect from April 1, 1984. Thus, after April I, 1984, even if there is some profit in the activity carried on by the trust/institution, so long as the dominant object is of general public utility, it cannot be said that the trust/institution is not established for charitable purposes.

The expression "property" used in Section 11 of the Act is of wide amplitude and it includes the business undertaking itself. It includes immovable and movable property. Therefore, where a trust/institution fulfills all the conditions mentioned in Section 12A /12AA, registration cannot be denied on the ground that some conditions of Sections 11 and 12 are not fulfilled, as observed by this Honble High Court in the case of Krishi Utpadan Mandi Samiti (supra).

Section 12AA(3) provides the cancellation of the registration. On reproduction, it reads as under:--

Section 12AA(3)-Where a trust or an institution has been granted registration under clause (b) of sub-section (1) [or has obtained registration at any time u/s 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)]] and subsequently the Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution:

Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard.

In the instant case, the Tribunal has given a categorically finding that the objects of the assessee as mentioned in the Memorandum of Association and Article of Association are of General Public utility. The Tribunal observed that "it is undisputed fact that the objects of the assessee as mentioned in Memorandum of Association and Articles of Association dated 12th November, 1990, are of General Public Utility." In the first round of litigation, the issue relating to assessees request for registration was remanded back by the Tribunal to the CIT to examine the matter afresh and to decide the same as per law after considering the objects, which had been found by the Tribunal as of "General Public Utility", and as per the decision of Honble Supreme Court in the case of Gujarat Maritime Board (supra). But the CIT while passing order dated 25th March, 2009 admittedly, neither considered the objects nor the decision of Honble Supreme Court (supra). So, the Tribunal in the IInd round of the litigation has rightly granted the registration by passing impugned order.

In the light of above discussion and by considering the totality of the facts and circumstances of the case, we find no reason to interfere in the impugned order passed by the Tribunal. The same is sustained along with the reasons mentioned therein.

In the result, the appeal filed by the Department is hereby dismissed at the admission stage.