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2015 (4) TMI 668 - ITAT CHENNAI

2015 (4) TMI 668 - ITAT CHENNAI - TMI - Charitable activities in the nature of educational activities - It was observed that assessee is not engaged in providing structured education programme - assessee is neither providing formal education nor is instrumental in awarding degrees or certificates from any recognized universities/institutions. - Assessee submitted that, assessee is receiving grants from overseas in order to achieve its objectives. The objects of the assessee-society are to promot .....

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e objects of the assessee were questioned.

We are in complete agreement with the view taken by the Tribunal that the activities of the assessee are related to education and, therefore, is entitled to exemption under section 11 of the Act. At this stage, it is required to be noted that right from the assessment year 1995-96 till 2008-09 the activities of the assessee has been considered by the Revenue as educational activities. Considering various activities of the assessee as narrated .....

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bjects of Ahmedabad Management Association. Thus, we are of considered view that the judgment rendered by the Hon’ble Gujarat High Court in the case of Ahmedabad Management Association [2013 (11) TMI 1332 - ITAT AHMEDABAD] squarely applies to the present case as well. Accordingly, we uphold the findings of the Commissioner of Income-tax(Appeals), - Decided against the revenue. - ITA Nos. 1059 & 1060/Mds/2014 - Dated:- 20-3-2015 - Shri A. Mohan Alankamony And Shri Vikas Awasthy JJ. For the Appell .....

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appeals has been filed. We have perused the same. The reasons for delay in filing of the appeals have been sufficiently explained. Accordingly, the delay of 6 days in filing of the appeals is condoned and the appeals are admitted to be heard on merit. 3. The facts as emanating from the records are: The assessee is a trust registered u/s.12A(a) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) since 1980. The Assessing Officer while completing the scrutiny assessment for the asses .....

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evant year and has received fees as consideration for services rendered in excess of 10 lakhs, the proviso to Sec.2(15) are invoked. Aggrieved by the assessment orders in the respective assessment years, the assessee preferred appeals before the Commissioner of Income-tax(Appeals). The Commissioner of Income-tax(Appeals) after examining the objects, the activities being carried out by the assessee and the decision of the Ahmedabad Bench of the Tribunal in the case of Ahmedabad Management Associa .....

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ubmitted that the assessee is not engaged in providing structured education programme. To fall within the first limb of definition of charitable purpose u/s.2(15), the assessee is required to provide formal education. Whereas, in the present case, the assessee is neither providing formal education nor is instrumental in awarding degrees or certificates from any recognized universities/institutions. The ld. DR, in order to support his submissions draws our attention to page Nos. 100, 106 and 117 .....

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ing on behalf of the assessee, strongly supported the impugned order. The ld. Counsel for the assessee submitted that the assessee is receiving grants from overseas in order to achieve its objectives. The objects of the assessee-society are to promote research and development of higher education in professional management on scientific lines. The assessee is organizing lectures, conferences, seminars etc. The ld. Counsel for the assessee submitted that the assessee is affiliated to All India Man .....

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on of the Tribunal. 6. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below. It is an undisputed fact that the assessee is enjoying benefit of sec.12A(a) of the Act since 1980. The assessee is carrying on its charitable activities viz. providing education in accordance with its objects. The status of the assessee as charitable organization has been accepted by the Department right from the beginning. For the first time i .....

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ble to claim benefit u/s.11 of the Act. Whereas, the case of the assessee is that charitable activities carried out by the assessee are in the nature of education. The ld. Counsel for the assessee draws support from the decision of the Hon ble Gujarat High Court in the case of DIT(E) v. Ahmedabad Management Association, reported as 366 ITR 85. 8. The assessee has filed paper book containing Memorandum of Association of the assessee as well as Ahmedabad Management Association. A perusal of the ob .....

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urt. The High Court affirmed the findings of the Tribunal and observed as under:- 5.4. Now, while considering whether the activities of the assessee can be said to be educational activities or not the decision of this court as well as the Hon'ble the Supreme Court is required to be referred to and considered. In the case of Gujarat State Co-operative Union (supra) it is held by the Division Bench of this court that mere existence of profit will not disqualify an institution for exemption und .....

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ppears to us that the decision of the Tribunal which seeks to rest it on the observations made by the Supreme Court in Loka Shikshana Trust's (supra) for holding that, the assessee is not entitled to exemption under section 10(22) of the Act is based on a complete misreading of the observations of the Supreme Court. In Loka Shikshana Trust's case [1975] 101 ITR 234 (SC) the Supreme Court, while dealing with the provisions of section 11 read with section 2(15) of the Act, which defines &# .....

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e constitutes education. According to this, wide and extended sense, travelling is education, because as a result of travel ling you acquire fresh knowledge . . . but this not the sense in which the word "education" is used in clause (15) of section 2. What "education" connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by normal schooling.' The Supreme Court, in the above observations by referring to the .....

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(The Oxford English Dictionary Volume IX, page 217). The Supreme Court has observed that the word 'education' also connotes the whole course of scholastic instruction which a person has received. This clearly indicates that the observations of the Supreme Court were not intended to give a narrow or pedantic sense to the word 'education'. By giving further illustrations of a traveller gaining knowledge, victims of swindlers and thieves becoming wiser, the visitors to night clubs .....

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these observations, in paragraph 17 of its judgment, that the word 'education' is limited to schools, colleges and similar institutions and does not extend to any other media for such acquisition of knowledge. The observations of the Supreme Court do not confine the word 'education' only to scholastic instructions but other forms of education also are included in the word 'education'. As noticed above, the word 'schooling' also means instructing or educating. It, .....

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the methodology of teaching and a shift of the better in the institutional setup. Advancement of knowledge brings within its fold suit able methods of its dissemination and though the primary method of sitting in a classroom may remain ideal for most of the initial education, it may become necessary to have a different outlook for further education. It is not necessary to nail down the concept of education to a particular formula or to flow it only through a defined channel. Its progress lies i .....

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ther than the Revenue. It is also required to be noted that as such in the said decision the Division Bench has not taken any contrary decision that of the decision of Gujarat State Co-operative Union (supra). It is to be noted that, on facts, it was held that the assessee cannot be said to be an educational institution and, therefore, the assessee would not be entitled to exemption as contemplated under section 10(22) of the Act. 5.6. Now, applying the ratio of the decision of the Division Benc .....

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that the activities of the assessee is in the field of education, whether the assessee is entitled to exemption under section 11 of the Act or not and whether in the facts and circumstances of the case the assessee can be denied exemption under section 11 of the Act relying upon and/or considering the proviso to section 2(15) of the Act is concerned so far as the amendment in section 2(15) of the Act amended, vide the Finance Act, 2008, and the insertion of the proviso to section 2(15) of the ac .....

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ber 19, 2008, it appears that the newly inserted proviso to section 2(15) of the Act will apply to entities whose purpose is advancement of any other object of general public utility, i.e., the fourth limb of the definition of "charitable purpose" contained in section 2(15) of the Act and, hence, such entities will not be eligible for exemption under section 11 or under section 10(23C) of the Act if they carry on commercial activities. Thus, on a fair reading of section 2(15) of the Ac .....

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of 2008, dated December 19, 2008, it appears that if the case of the assessee does not fall within the first three limbs of section 2(15) of the Act, i.e., relief to the poor ; education or medical relief and if it falls in the fourth limb, i.e., advancement of any other object of general public utility and it is found that such activity of advancement of any other object of general public utility involves carrying on of (a) any activity in the nature of trade, commerce or business ; or (b) any .....

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