TMI Blog2015 (2) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation - CIT(A) deleted the addition - Held that:- As can be seen Ld. CIT(A) has deleted the addition having found that assessee has neither written off the cost of acquisition nor has treated it as application of income. As the learned D.R. has not brought any material to controvert the aforesaid finding of the Ld. CIT(A), we do not find any infirmity in the order of the Ld. CIT(A). - Decided against revenue. - ITA No. 1645/Hyd/2013, Cross Objection No.23/Hyd/2014 - - - Dated:- 30-1-2015 - B. Ramakotaiah, AM And Saktijit Dey, JM,JJ. For the Petitioner : Mr. Rajat Mitra For the Respondent : Mr. V. Raghavendra Rao ORDER Per: Saktijit Dey: This appeal by the department is directed against the Order of the Ld. CIT(A)-IV, Hyderabad dated 06.09.2013 for the assessment year 2007-2008. Assessee has also filed cross objection against the same order of the Ld. CIT(A). ITA.No.1645/Hyd/2013 : 2. The Department has raised the following grounds : 1. The order of the Ld.CIT (Appeals) is erroneous both on facts and in law. 2. On the facts and in circumstances of the case and when the assessee is conducting only coaching classes for students for appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 10(23C)(iiiad). During the scrutiny assessment proceeding, the A.O. after verification of the books of accounts and other information available on record observed that during the relevant financial year the assessee conducting coaching for students appearing for Civil Services Main, 2006, Civil Services - Prelims 2007 and Civil Services Crash Course (Prelims) has received the following amounts : (i) Fees of ₹ 9,62,785 from 271 students appearing for C.S. Main 2006. (ii) Fees of ₹ 6,78,785 from 212 students appearing for C.S. Preliminary 2007. (iii) Fees of ₹ 86,500 from 72 students appearing for C.S.Crash Course 2007. 3.2. The A.O. was of the view that coaching students and preparing them for particular competitive examination does not partake the nature of imparting education. Hence, the assessee is not a charitable institution under section 2(15) of the Act. Accordingly, he issued a show cause notice to the assessee to explain why the exemption claimed should not be disallowed. Though, the assessee objected to the inference drawn by the A.O. by stating that it is eligible for exemption but the A.O. rejecting the claim of the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;great school of life'. It affirmed that 'the process of training and developing the knowledge, skill, mind and character of students by normal schooling' would be included in the term 'education'. The observation of the court that education connotes the whole course of scholastic instructions which the person has received indicates that the Court did not intend to give a narrow and pedantic sense to the word. 4.5. This view is also expressed in the following decisions : (i) DIT (Exemp) vs. National Safety Council [2008] 305 ITR 257 (Bom.) (ii) CIT vs. AMM Arunachalam Educational Society [2000] 243 ITR 229 (Mad.) (iii) Addl. CIT vs. Aditanar Educational Institution [1979] 118 ITR 235 (Mad.) (iv) Governing Body of Rangaraya Medical College vs. ITO [1979] 117 ITR 284 (AP) 4.6 Following these decisions, the courses imparted by the appellant do, therefore, fall within the concept of education. Education is no more to be understood as mere imparting the '3 R's i.e. reading, writing and arithmetic. In the case of CIT Vs. Sri Lal Bahadur Shastri Educational Society [2001] 252 ITR 837 (Raj), the Gujarat High Court considered the educational in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or universities are to be treated as to fulfill the criteria of charitable purpose as defined under section 2(15). The learned A.R. submitted that as the activity of the assessee as per its objects, is also in the nature of imparting education through process of training for developing the knowledge, skill, mind and character of the students, it has to be considered as 'education' as envisaged under section 2(15) of the Act. In support of its contention, the learned A.R. relied upon the following decisions : 1. ICAI Accounting Research Foundation another vs. Director General of Income Tax (Exemptions) and others (2010) 321 ITR 73 (Del.) 2. Director of Income Tax (Exemptions) vs. National Safety Council (2008) 305 ITR 257 (Bom.) 3. DIT vs. Indo-Soviet Medicare Research Foundation (2005) 146 Taxman 384 (Del.) 4. CIT vs. A.M.M. Arunachalam Educational Society (2000) 243 ITR 229 (Mad.) 5. Gujarat State Cooperative Union vs. CIT (1992) 195 ITR 279 (Guj.) 6. CIT vs. Academy of General Education, Manipal (1984) 150 ITR 135 (Kar.) 7. Addl. CIT vs. Aditanar Educational Institution (1979) 118 ITR 235 (Mad.) 8. ICAI vs. DGIT (E) (2012) 347 ITR 99 (Del.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x vide order dated 23.09.1978 which pre-supposes that assessee's objects being of charitable nature, assessee was granted registration as a charitable institution. Keeping in view the aforecited factual position, let us examine the facts of the case. The objects of the assessee society as per its bye laws are as under : The aims and objectives of the society are as follows: a. To promote literary, scientific and other educational activities among local young men and women. b. To be a Centre for Research in Academic, Administrative, Educational and Management fields with a view to contributing to improvement in the systems, methods thereof. c. To promote, integration and dissemination of knowledge in various fields of human activity related to academic, education, management and administrative fields and other programmes.] d. To undertake Research, Organisational and Developmental Programmes on contract with Government, Public or Private Agencies. e. To Organise and promote such other related activities as would help the achievement of its objectives; and f. To arrange for the training of local boys and girls appearing at the competitive examination held by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... University or other Educational Institution solely for educational purpose and not for the purpose of profit. If we consider the activities of the assessee as enumerated in the aims and objects then it has to be considered as other educational institution existing solely for educational purpose and without profit motive. Therefore, considered in the aforecited perspective and keeping in view the ratio laid down in the decisions referred to by the learned A.R. and relied upon by the learned CIT(A), the assessee would be eligible for exemption under section 10(23C)(iiiad). Further, from the facts and materials placed on record, it is very much evident that from its inception assessee has been claiming exemption and the department has also accepted such claim of the assessee in successive assessment years. Perusal of the assessment orders passed under section 143(3) of the Act for the assessment years 1997-98 and 1999-2000 clearly establishes this fact. Moreover, even in the succeeding assessment year also i.e., assessment years 2010-2011 and 2011-2012, A.O. has allowed claim of exemption under section 10(23C)(iiiad) after examining the issue in detail. Therefore, when the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 143(3) read with section 147 for the assessment year 2004-05 a copy of which has been placed in assessee's paper book. In these circumstances, it is not difficult to understand why the A.O. in the impugned assessment year has taken such a view. However, when department has accepted assessee's claim of exemption not only in the preceding assessment years but also in subsequent assessment years, latest being assessment years 2010-2011 and 2011-2012 under similar facts and circumstances, a contrary view should not be taken. One more aspect which needs to be looked into is, there is no dispute that assessee is registered under section 12A of the Act and the registration granted also continues till date. That being the case, there is no justification on the part of the A.O. to observe that the assessee cannot be treated as a charitable institution. Therefore, keeping in view the fact that assessee is registered as a charitable institution under section 12A of the Act, it can alternatively also claim exemption under section 11 of the Act. The A.O. while completing the assessment has totally ignored this aspect and has failed to examine whether the assessee is eligible for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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