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2015 (5) TMI 752 - ITAT VISAKHAPATNAM

2015 (5) TMI 752 - ITAT VISAKHAPATNAM - TMI - Application for grant of registration under section 12A of the Act - Rejection of application on the ground that it is not established for charitable purpose - Held that:- The first objection of the CIT is with regard to the fact that the assessee is not imparting any education, but only giving coaching for EAMCET examination. However, in our view such finding of the CIT is not based on facts on record. As can be seen the assessee has established a J .....

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However, the learned Authorised Representative has demonstrated before us by referring to the relevant G.O issued by the Govt. that fees charged by the assessee is more or less at par with the tuition fees prescribed by the govt. Moreover, whether the assessee is charging fees in excess or what is prescribed can be considered by the Assessing Officer while examining assessee’s claim of exemption under section 11. At the time of granting registration, the CIT has to act in accordance with the pr .....

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Educational and Social Welfare Society [2011 (2) TMI 1185 - Allahabad High Court] - Decided in favour of assessee. - ITA No. 369/Vizag/2012 - Dated:- 4-3-2015 - SHRI J. SUDHAKAR REDDY AND SHRI SAKTIJIT DEY, JJ. For The Assessee : Shri C.R. Hemanth Kumar, CA For The Department : Shri Omkareswara Rao, DR ORDER Per Saktijit Dey The aforesaid appeal by the assessee is directed against the order dated 27.07.2012 passed by the learned CIT Vijayawada rejecting assessee s application for grant of regist .....

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n by the assessee will not come within the meaning of charitable purpose as defined under section 2(15) of the Act due to the following reasons: • (a) As seen from the audited financial statements for the year ending 31.3.2010 and 21.3.2011, most of the fee collections are from EAMCET coaching. Imparting training to appear at some specified examination would not come under education. • (b) The assessee society is charging fee over and above the fee prescribed by the Govt. Therefore, it .....

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ical relief etc. Without any relief to the poor public utility at large, mere running of education institution cannot be said to be a charitable institution . • (d) Moreover, the assessee is not holding any property under the Trust for charitable purpose. It is not deriving any income from the property held under Trust and any income in the form of voluntary contributions was received with a specific direction to form part of the corpus of the society. The purpose of registration under sect .....

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eneral provision contained in section 11 may not override the provisions of specific section. Hence, the income of the educational institution has to be examined under section 10(23C)(iiab), 10(23C)(iiiad) and 10(23C)(vi) of the Act and not under section 11 of the Act> 3. Accordingly learned CIT relying upon certain judicial precedents held that as the assessee society is not established for charitable purpose cannot be granted registration under section 12AA of the Act. Accordingly, he rejec .....

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are complied, learned CIT cannot refuse to grant registration under section 12A. The learned Authorised Representative referring to the objects of the society as enumerated in the memorandum submitted that the objects are charitable in nature, as defined in section 2(15) of the Act. It was submitted, as the objects of the society are charitable in nature, the conclusions drawn by the CIT is not correct. It was submitted, the observations made by the learned CIT that the assessee is giving studen .....

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like EAMCET, IIT, AIEE etc., is in addition to the imparting of education in the Jr. College and is only a value addition. In this context it was submitted that if training relating to the entrance examinations are not given to the students along with normal curriculum, then no parent would be willing to send their children to the college. Thus, only looking at the need of the hour, in addition to the normal intermediate course, the assessee is also imparting education towards entrance examinati .....

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resentative submitted that the assessee has not charged any excess fee than what has prescribed by the Govt. The learned Authorised Representative referring to the fees prescribed by the Govt. and the fee charged submitted that the tuition fee charged by the assessee is almost at par with the fee prescribed by the govt. Extra fee charged by the assessee is towards computers and laboratory facilities. The learned Authorised Representative submitted that the view expressed by the CIT that relief t .....

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11, it is submitted by the learned Authorised Representative that the objects of the assessee is to run educational institutions. Hence any income derived therefrom is also eligible for exemption. The learned Authorised Representative submitted, the ratio of the decisions relied upon by CIT will not apply to the facts of the present case. 6. The learned Authorised Representative relied on the following decision: • Institute & Electronic Engineers Inc. V. DIT 147 ITD 263 • Kusumba .....

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hing institution cannot be considered to be imparting education so as to bring it within the meaning of charitable purpose as defined under section 2(15) of the Act. He further submitted that the CIT has only looked into the objects and the genuineness of the activities and has denied registration to the assessee. 8. He also submitted that the facts brought on record by the CIT proved that the assessee has not granted any concessions towards the fees to the poor students. As there is no charitab .....

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10 (SC) 224 ITR 310 9. We have considered the submissions of the parties and perused the materials on record. We have also carefully applied our mind to the decisions relied upon by the parties. As can be seen learned CIT has refused to grant registration under section 12AA basically for the following reasons: • The majority of fees were collected for EAMCET coaching i.e. imparting training to appear at some specified examination which would not come under the definition of education. &bull .....

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f the educational institution has to be examined under section 10(23C)(iiiab), 10(23C)(iiiad) and 10(23C(vi) of the Act and not under section 11. 10. Before deciding whether the aforesaid reasons are good enough to deny registration to the assessee, we have to look at the meaning of charitable purpose as defined under section 2(15) of the Act. The same is extracted hereunder: Section 2(15)"charitable purpose" includes relief of the poor, education, medical relief, [preservation of envi .....

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or a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity:] [Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is [twenty-five lakh rupees] or less in the previous year;] 11. A plain reading of the aforesaid provision will make it clear that the expression charitable purpose is an inclusive one which amongst other things includes .....

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fact that the assessee is not imparting any education, but only giving coaching for EAMCET examination. However, in our view such finding of the CIT is not based on facts on record. As can be seen the assessee has established a Jr. College in the name and style of R.K. Science and Commerce Jr. College which is imparting education in two year intermediate course. This fact is clearly evident from the affiliation granted on 9.4.2012 by the Board of Intermediation, A.P. Therefore, there cannot be a .....

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ng students for EAMCET, IIT, AIEEE entrance examinations is only ancillary to the main objects. That being the case, it cannot be said that the assessee is not imparting education. The term education in our view would mean training and developing the skill, knowledge, mind and character of students which the assessee is actually carrying on. 14. The next objection of the CIT is, the assessee is charging fee over and above the fee prescribed by the govt. However, the learned Authorised Representa .....

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e Act. As per the said provision at the time of granting of registration, the CIT has to examine the object of the society and the genuineness of its activities. If the objects of the society are charitable and its activities are genuine, then registration cannot be refused to the assessee. On the basis of the facts and materials on record, it is clear that one of the objects of the assessee is imparting education and the assessee is carrying out such objects by establishing an educational insti .....

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ities which constitute charitable purpose. Therefore, it cannot be said that as the assessee is not involved in the activity of relief to poor, it is not a charitable institution, notwithstanding the fact that assessee is involved in imparting education which is also one of the activity coming within the meaning of charitable purpose as defined under section 2(15). Even the other allegations of the CIT such as, assessee is not holding any property on Trust and the provisions of section 11 being .....

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