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2018 (11) TMI 995 - AT - Income TaxDenial of exemption u/s. 11 - discharging of liability taken over from the Corporate College of Arts and Science - assessee is not a regular college, providing systematic education to the students - when the assessee is conducting coaching classes for various examinations conducted by the Board of Examination, University etc., whether such activities of the assessee could be treated as ‘education’ within the meaning of sec. 2(15) - Held that:- In the case of Sole Trustee, Loka Shikshana Trust vs. CIT [1975 (8) TMI 1 - SUPREME COURT] the Supreme Court had an occasion to consider this issue and Apex Court found that all kinds of acquiring knowledge may not come within the term “education”. The assessee cannot be considered to be an educational trust within the meaning of section 2(15) of the Act. Therefore, it is not entitled for exemption u/s. 11 of the Act. Accordingly, the order of the CIT(A) is confirmed on the reasons as above. Since the approval u/s. 12A was granted, exemption u/s. 11 of the Act is to be granted automatically - Held that:- As held by various Courts, the AO has the liberty to grant or refuse exemption u/s. 11 at the time of making assessment for each assessment year in accordance with law. In the assessment year under consideration, the Assessing Officer came to the conclusion that the activities carried on by the assessee are not charitable in nature, hence, he denied exemption u/s. 11 of the Act. Hence, we do not find any merit in the argument of the Ld. AR. This ground of appeal of the assessee is dismissed. Without prejudice to the earlier findings, we find that the assessee has paid interest to the Trustees on the amount of contribution made by 19 members at ₹ 10000/- each at 15% per month. Hence, the assessee is hit by the provisions of section 13(1)(c)(ii) of the I.T. Act. From this point of view also, the appeal of the assessee is dismissed. Non consideration of certain decisions relied upon by the assessee by the Assessing Officer and relying on some decisions against the assessee. Since we have held that the activities carried on by the assessee is not charitable in nature and the assessee is not entitled to exemption u/s. 11 of the Act, the assessee cannot have any grievance at this stage. This ground of appeal of the assessee is dismissed. When the assessee was treated as not entitled to exemption u/s. 11 of the Act, the income of assessee is to assessed at maximum marginal rate as applicable to AOP u/s. 164/165 of the Act. This ground of appeal of the assessee is rejected.
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