TMI Blog2014 (1) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... g the assessee entitled to the benefits of Sections 11 and 12 of the Act – Decided against Revenue. Disallowance of Advertisement expenses – Expenses incurred for commercial activities or not – Held that:- The object of the assessee trust is education - The expenditure in question has been incurred for inviting applications for the Hotel Management course and the Business Administration course, besides for the enhancement of the IMT brand name - the Assessing Officer observed that this expenditure indicated the commercial and non- charitable motive of the assessee, this observation formed the sole basis for the disallowance, without anything having been brought by the Assessing Officer on record as to how such expenditure was not in line with the object of the assessee trust – thus, there was no occasion for making any ad hoc disallowance – Decided against Revenue. Allowability of Exemption u/s 11/12 of the Act – Assessee not recognized in India – Held that:- As held in Delhi Music Society vs. DGIT [2011 (12) TMI 124 - DELHI HIGH COURT] – ‘education' does not mean schooling only and it is not confined to scholastic instruction only, but other forms of education are also inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee submitted in reply that IMT, Gurgaon had collaboration with OBU, UK, according to which, IMT would be responsible for the following:- i) Selection and admission of the students; ii) Delivery of the programmes offered by OBU, namely, BA (Hons.) Business Administration (3 year full time), BA (Hons.) Business Administration (4 year full time sandwich), BA (Hons.) Business Administration in Retail Management (3 year full time), B.Sc. (Hons.) Hotel Restaurant Management (4 year full time sandwich); and iii) Assessment conducting of exams in accordance with the University's academic regulations. 3. It was further submitted that OBU provided the curriculum and periodic teacher training and monitor and review the delivery of the curriculum of IMT and that on proper assessment of the student completing the course, OBU awards the degree which was recognized in UK as well as in other parts of the world. The assessee stated that there was no notification or recognition of the OBU by the Government of India/UGC/any other Government authority of India and these programmes were conducted on the basis of the agreement executed between the IMT and OBU. 4. The Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of business promotion and entertainment expenses have been upheld by the Ld. CIT (A) himself. It has also been contended that the Ld. CIT (A) has erred in allowing the expenses on account of advertisement, failing to take into consideration the fact that the advertisement expenditure was incurred for commercial activities and such expenditure was not as per the objects of the trust. It has been contended that the Ld. CIT (A) has failed to take into consideration the categorical observations made by the Assessing Officer in the assessment order, which the assessee has not been able to rebut. 7. The ld. counsel for the assessee, on the other hand, has places strong reliance on the impugned order. It has been submitted that there is no denying the fact that there is no notification or recognition of OBU by the Government of India or the UGC or other Government authority of India and the programmes are conducted on the basis of agreement executed between IMT and OBU; that however, this fact does not, by itself, lead to the conclusion that the activity carried on by the assessee is not a charitable activity, i.e., education; that no case for infringement of provisions of Sections 11 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting business promotion and entertainment expenditure incurred. The Assessing Officer held, while doing so, that this expenditure showed that the institution was fully involved in commercial/non-charitable activities and was being run as a business entity. The Ld. CIT (A) held such disallowance to be reasonable, observing that such expenses could not be incurred by an educational institution, since no such expenditure is required to be incurred by an educational institution. Such finding of the Ld. CIT (A) stands accepted by the assessee. 9. The challenge of the Department in this regard is that when once the CIT (A) upheld the disallowance of business promotion and entertainment expenditure, it was not right on his part to have held the assessee entitled to the benefits of Sections 11 and 12 of the Act. Here, it is seen that the two actions are mutually intrinsically exclusive and the disallowance need not necessarily lead to holding the assessee disentitled to the benefits of Sections 11 and 12 of the Act. As correctly noted by the Ld. CIT (A), following 'Idicula Trust Society', 2012-ITS-940-ITAT, if an assessee has extended any undue benefit to a person mentioned in Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t while wrongly allowing exemption u/s 11 and 12 of the Act to the assessee, the Ld. CIT (A) has erred in ignoring the fact that the assessee was not recognized in India and the courses are commercial in nature. 13. Here, it is seen that the Ld. CIT (A) has correctly placed reliance on the decision of the Hon'ble Delhi High Court in 'Delhi Music Society vs. DGIT', 204 Taxman 231 (Del). Therein, reliance was placed on 'Loka Shikshana Trust vs. CIT', 101 ITR 234 (SC), where it was held that 'education' does not mean schooling only and it is not confined to scholastic instruction only, but other forms of education are also included within its definition. In the light of this position, the institution run by the assessee trust in collaboration with OBU, UK, is imparting 'education' only. The programmes conducted are being conducted on the basis of the agreement between the institution and OBU. Registration with AICTE has been applied for. The correspondence with regard thereto was placed before the Ld. CIT (A) and the CIT (A) has duly taken the same into consideration. The same is also before us at pages 158-164 of the assessee's paper book. The Ld. DR has brought to our notice the v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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