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2022 (7) TMI 177 - AT - Income TaxExemption u/s 11 - Claim denied as coaching classes do not serve the purpose of education as a charitable activity within the meaning of Section 2(15) - scope of charitable activity - assessee is running various study centres as per its agreement with Yashwantrao Chavhan Maharashtra Open University, Nashik as per the duly approved programmes - HELD THAT:- We note first of all from a perusal of the assessee’s detailed paper book that it has been running various study centres as per its agreement with Yashwantrao Chavhan Maharashtra Open University, Nashik as per the duly approved programmes. The said agreement suggests that the assessee is supposed to offer and carry out various study programmes for the university’s registered students by way of correspondence classes, evaluation and as evolving course material as well other allied activities. That being the case, we are of the opinion that the CIT(A) has rightly held the assessee is eligible for the impugned exemption since it is carrying out education activities only. We draw support from Lok Shikshan Trust [1975 (8) TMI 1 - SUPREME COURT], Saurashtra Education Foundation decisions [2004 (2) TMI 11 - GUJARAT HIGH COURT] that such educational activities resulting in university degrees in various courses indeed make it eligible for Section 11 exemption. Section 11 exemption proceedings very much empower the Assessing Officer to verify the nature of the assessee’s activity(ies) as to whether they are in line with its objects or not. Learned counsel lastly sought to pin-point the fact that all its foregoing classes are very much in tune with the university’s approval only. He could hardly rebut the fact that a university is set up after its approval from the University Grants Commission “UGC”, a statutory body set up under the University Grants Commission Act, 1956 which makes provision for coordination of and determination of standards in universities. We fail to understand as to how any university, which has been set up under the UGC Act could grant affiliation for coaching classes which are nowhere part of commission’s standards. Faced with this situation, we are of the opinion that the learned Assessing Officer needs to factually verify all the assessee’s evidence(s) afresh and treat it as eligible for Section 11 exemption only for those courses which are run by the university strictly in tune with the UGC’s guidelines and if it is found that the coaching classes herein violate the same, the latter’s would be held as not entitled for the impugned exemption in light of the cited case laws. The assessee is directed to file all the relevant details within three effective opportunities failing which the learned Assessing Officer shall be at liberty to proceed as per law.
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