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2019 (6) TMI 929 - ITAT AMRITSARRegistration u/s. 12AA - denial of registration as applicant society is running a franchise purely on the basis of a well defined business model with no intent of imparting education to public at large - no way the genuineness of activities of the society can be corroborated with the stated aims and objects given that the society's activities are in the nature of business and can't be covered under the term 'charitable purpose’ - assessee, registered under the Societies Registration Act, 1860 is running a school under the name and style of ‘Mother’s Pride School’ at Bathinda school being run on a franchise basis, entering into a franchise agreement (not on record) with M/s. Mother’s Pride Education Personna Pvt. Ltd - HELD THAT:- A playschool cannot, by any stretch of imagination, be regarded as scholastic instruction. ‘Education’, as the word appears in s. 2(15), though not to be understood pedantically, has to have the elements of structured courses, designed to impart knowledge/training; accreditation; examination, etc., and cannot be understood in a loose sense. One gets educated, as explained in Sole Trustee, Lok Sikshan Sansthan [1975 (8) TMI 1 - SUPREME COURT] even by seeing pictures, visiting galleries, museums, etc.; life itself being a great school. The same, however, it opined, cannot be regarded as ‘education’ u/s. 2(15) of the Act. The competent authority has, in our clear view, rightly alluded to the said decision, stating that what stands imparted cannot be regarded as ‘education’ u/s. 2(15). The assessee has not controverted the finding by the ld. CIT(E) that the Mother’s Pride chain is of a playschool or that the agreement does not provide for a primary school and, besides, not furnished any evidence toward the said upgradation of the ‘school’ to an elementary school, i.e., class 1 onwards (up to class 5), i.e., as claimed. The first and the principal objection of the competent authority is thus valid. Dominant object of the assessee-society is to make profit, which therefore cannot be regarded as charitable per se - As already opined that the only activity being pursued in furtherance of its’ objects is of a playschool, which would not qualify as ‘education’ under the Act. The question of examining the predominant object – which is purely a matter of fact, in running the said school, thus, does not arise for consideration. This is as only where the said activity qualifies to be ‘education’, that the pre-dominant object in pursuing the same falls for being examined in-as-much as where and to the extent it is profit making, the same may defeat the claim to being a charitable institution. Membership of the society, from which its’ governing board is selected - While the competent authority states it to be limited to one family, the assessee claims it to be comprised of three families. In our view this is a largely irrelevant consideration. What is relevant, irrespective of who manages the society, is that its’ activities inure to the benefit of general public. While certain sections of the public would get excluded for economic reasons, that may by itself not oust its’ claim as a public institution. It is to provide inclusiveness, breaking social and economic barriers, that the RTE Act, inapplicable to the asessee’s school, being a playschool, has been enacted and made applicable to all types of schools. That is, that the assessee does not qualify to be a school there-under is a different matter, so that all that assumes relevance, under the circumstances, is if the activity pursued in fulfillment of/in achieving its’ object qualifies to be ‘education’, which we have found it as not. - Decided against assessee.
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