TMI Blog2013 (10) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... imparting skills/ knowledge/lessons on any subject or field would be providing commercial training or coaching. The definition itself excludes certain entities/institutes/ establishments. In terms of the exclusionary clause, a pre-school - training and coaching centre or any institute or establishment which issues a certificate, diploma, degree or any other educational qualification recognized by extant law, is excluded from the definition, of 'commercial training or coaching centre'. Consequently, commercial training or coaching provided by such entities are outside the fold of the defined service. Commercial training or coaching on any subject or field of sports is also specifically excluded. The taxable service of "commercial training or coaching" occurs when any institute or establishment is engaged in the activity of imparting skill, knowledge or lessons on any subject or field (excluding sports), irrespective of whether such imparting of skill, knowledge or lessons is in respect of particular discipline or a broad spectrum of disciplines/ academic areas; irrespective of the nomenclature or description of the institute or establishment, as a coaching or training centre or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s could be called commercial training or coaching centre; but not so institutions recognized by law. 2. Before we proceed to analyses of the scope and reach of the taxable service specified in Section 65(105) (zzc) of the Act, it is useful to extract the relevant provisions, as operative during the period relevant to these appeals. 3. RELEVANT PROVISIONS: (a) Section 65 (26): Commercial training or coaching means any training or coaching provided by a commercial training or coaching centre; (b) Section 65(27): Commercial training or coaching centre means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes but does not include pre-school coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force. (c) Section 65 (105)(zzc): specifies taxable service to mean any service provided or to be provided to any person, by a commercial trainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding of commercial training or coaching by way of imparting skill or knowledge or lessons in or in relation to sports, is excluded from the ambit of the definition. The fifth integer of the definition specifies that an entity engaged in the enumerated activity with or without the issuance of a certificate is nevertheless the defined entity. The sixth integer of the definition incorporates an inclusionary clause to encompass imparting skill or knowledge or lessons in any subject or field (excluding sports) by way of coaching or tutorial classes, within the defined entity. This is followed by the seventh integer of the definition, excluding from the ambit of the definition pre-school coaching and training centre or any institute or establishment which issues any certificate, diploma, degree or any educational qualification recognized by law for the time being in force. 5. On primary analysis of the relevant statutory provisions it is legitimate to infer that any institute or establishment providing commercial training or coaching (including any centre or institute, irrespective of its nomenclature, where training or coaching is provided for consideration and irrespective of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red an appeal to this Tribunal. GLIM conducts Post Graduate programme in Management, a full time programme and an Executive MBA programme, as a part time course. It has academic and research collaborations with foreign Universities. GLIM is a company registered under Section 25 of the Companies Act, 1956. Proceedings were initiated by Revenue for levy of service tax against GILM for having provided commercial training or coaching, culminating in an adjudication order. GLIM contended before this Tribunal primarily that it was not providing commercial training or coaching as there was no profit motive involved in its activities. The appeal was allowed the appeal by holding that the assessee is a recognised Charitable Organisation under the Income Tax Act, 1961; though it may have earned some surplus income from the activity of imparting education, it is engaged predominantly in public utility areas; that no individual associated with the assessee gained any monetary benefit out of its activities; that imparting of education does not amount to business; and that profit making is not its main motive. The decision was prior to the 'Explanation' incorporated to Section 65(105)(zz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the burden of tax indirectly fall on students; and students pursuing a course of education in regular colleges are excluded while students pursuing education in - parallel colleges are not; and there is no discernible distinction between the two classes of students. (d) In Administrative Staff College of India vs. CC CE, Hyderabad 2009 (14) STR 341 (Tri. Bang) the assessee's appeal was allowed. This Tribunal concluded that ASCI was conducting various programmes for persons in service in a professional manner in all fields of administration and management; and is registered as a society with several laudable objectives. Therefore, though profit is earned it cannot be considered or equated with a commercial coaching or training centre; that the activities cannot be equated with those of a tutorial college; that the expression commercial in the definition indicates that it qualifies the coaching or training centre and not coaching or training; and since the assessee is registered under the Societies Registration Act and is also exempted from income tax as a charitable organisation, it cannot be considered a commercial centre. The alternative contention by Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be indulging in any commercial activity; and since the assessee's institutions are registered under the Societies Registration Act for educational purposes they cannot be brought under the ambit of commercial training or coaching centre. This is also a pre-amendment decision. (g) In Centre for Dev. of Advanced Computing vs. CCE, Hyderabad 2009 (14) STR 165 (Tri. Bang.)) (another pre-amendment decision), the Tribunal again allowed an appeal by the assessee. The assessee was a Society registered under the provisions of the Societies of Registration Act, 1860 as also under provisions of the. Public Trust. Act, 1950. It was functioning under the administrative control of the Department of Information and Technology, Ministry of Communication and Information Technology of the Central Government. The assessee also obtained exemption from payment of Income Tax under the provisions of the Income Tax Act, 1961, as a charitable trust. The assessee was imparting education in the field of software and hardware, leading to issuance of various diplomas such as Diploma in Advanced Computing, Diploma in Systems and Software Development, Diploma in Embedded Systems Design etc. Followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Trustee, Loka Shikshana Trust vs. Commissioner of Income Tax, Mysore AIR 1976 SC 10; of the High Court of Gujarat in Gujarat State Co-operative Union vs. CIT (1992) 103 CTR (Guj.) 206; of the Patna High Court in Bihar Institute of Mining Mine Surveying (1994) 121 CTR (Pat) 312; and of the Delhi High Court in Delhi Music Society vs. Director General of IT 2011-TIOL-862-HC-DEL-IT. All these decisions involve the issue of entitlement to exemption from Income Tax under provisions of the Income Tax Act, 1961 and whether income derived from the pursuit of activities in relation to educational purposes, is entitled to Income Tax exemption under the provisions of the 1961 Act. The earlier decisions, of the Supreme Court, the Gujarat and the Patna High Courts were considered by the Delhi High Court in Delhi Music Society vs. Director General of IT (supra). In these several decisions, whether for identifying an institution whose income is excluded from the locus of taxable income or regarding the scope of education which falls within the definition of charitable purpose under provisions of the Income Tax Act, 1961, guidelines were spelt out. Education has been explained to denote sys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le independent thinking at a micro level is encouraged, out of the box innovation is usually frowned upon. The methodology of education is pursued through textbooks; the learner is encouraged to think and write about what he is reading; to discuss and reflect. Education could be either formal or informal. Other source indicate that education means teaching or training a person in general learning while coaching or training is for business or profession. Training means the process of teaching or learning skills, discipline etc. and could also mean systematic instruction. Shri Sahu, ld. Counsel has also referred to a compilation by Reader's Digest, the Modern Guide to Synonyms and Related Words. The compilation explicates the meanings of the words 'teach', 'educate', 'coach' and 'train'. Reference is also made to A Manager's Guide to Coaching , to point out the deeper meaning of what constitutes coaching. Another compilation - The Theory and Practice of Training' is also referred, to elucidate different contours of what 'training' constitutes. This compilation seeks to point out distinctions between training and education . Refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view, what commercial training or coaching means must be ascertained exclusively from the relevant provisions of the Act and applying the appropriate interpretative principles in case of grammatical, syntactic or contextual ambiguity. 13. Section 65(26) defines commercial training or coaching to mean any training or coaching provided by a commercial training or coaching centre. Section (27), as already noticed, defines commercial training or coaching centre to mean any institute or establishment providing commercial training or coaching. We will deal with the other facets of the definition later. As initially defined (above) it was possible to infer that training or coaching provided by a training or coaching centre which has no commercial or profit motive underlying its activity would be outside the scope of the definition. This dialectic was the basis of the judgements of this Tribunal in GLIM, Magnus Society, Centre for Development of Advanced Computing and Administrative Staff College of India (supra), which reasoned that absence of commercial, business or a profit motive in the activity of an establishment or institution would remove such entity from the ambit of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition is available, it is impermissible to look to extra - textual guidance. 15. If as mandated by Section 65(27), training or coaching means imparting of skills, knowledge or lessons on any subject or field, a further enquiry as to whether imparting skills, knowledge or lessons could be classified between higher and lower degrees of skills/ knowledge/lessons; between different degrees of intensity in imparting of skills/knowledge/lessons; or between a regular or hyphenated regime of imparting skills/ knowledge/ lessons, is uncalled for. A good faith interpretation of Section 65(27) requires that wherever skills/knowledge/lessons are imparted on any subject or field, the activity must be considered to be training or coaching. In the State of Jammu and Kashmir vs. T N Khosa AIR 1974 SC 1; in another context and explaining the contours of the classification doctrine in Article 14 of the Constitution , the Supreme Court (per Krishna Iyer J.) observed - Mini - classifications based on micro distinctions are false to our egalitarian faith and only substantial and straightforward classifications plainly promoting relevant goals can have constitutional validity. To overdo classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011. As amended, the provision now reads: commercial training or coaching centre means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than sports, with or without issuance of a certificate and includes coaching or tutorial classes . By this amendment the following clause in the pre amended provision was deleted; but does not include pre-school coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force . 19. W.e.f. 01.05.2011 [therefore and pursuant to the amendment to Section 65(27)], every institute or establishment which imparts skill or knowledge or lessons on any subject or field (excluding sports), with or without issuance of a certificate; and including (coaching or tutorial classes; pre-school coaching and training centre; or any institute or establishment which issues any certificate, diploma, degree or any educational qualification recognized by law for the time being in force); fall within the ambit of commercial training or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the regulatory provisions of the 1987 Act. GLIM therefore applied for recognition under this legislation and the recognition was granted later. However, the Supreme Court in Associated Management of Private Colleges vs. AICTE and Others, vide the judgment dated 25.04.2013 in Civil Appeal No. 1145/2004 declared that management education does not come within the definition of technical education and therefore does not require any statutory recognition. On the basis of this contention, it is contended that since GLIM is an educational institution and not a training or coaching centre or establishment, it was all times outside the purview of the defined taxable service; alternatively that it is excluded from liability to tax on account of recognition by AICTE for a period; and that after the judgment of the Supreme Court dated 25.04.2013, since provisions of the 1987 Act are inapplicable ab initio, GLIM would be immune to tax liability on the basis of its claim that it is an educational institution and not a training or coaching centre. 22. Having regard to the scope of the reference to this Bench, we decline to consider whether GLIM or any of the other appellants are immune to l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbiguities in ascertainment of the expression commercial , we find no warrant for recourse to precedential guidance for ascertaining the meaning of commercial . It is not the case of any Counsel that Parliament is precluded from defining an expression in any manner it chooses to, within its authorised field of legislation and consistent with any constitutional limits on its legislative power. 25. On the aforesaid analysis, we answer the reference as follows: (i) The taxable service of commercial training or coaching occurs when any institute or establishment is engaged in the activity of imparting skill, knowledge or lessons on any subject or field (excluding sports), irrespective of whether such imparting of skill, knowledge or lessons is in respect of particular discipline or a broad spectrum of disciplines/ academic areas; irrespective of the nomenclature or description of the institute or establishment, as a coaching or training centre or an educational institution; regardless of whether an institute or establishment is incorporated by or registered under any law; and irrespective of distinctions on the basis of curriculum, course content, teaching methodology, cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
