TMI Blog2016 (3) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not entitled for exemption u/s.11 of the Act and this income of the assessee is to be assessed as business income under the head ‘AOP’ and it is to be assessed after giving all deduction available o the assessee under the head ‘'Business income”. However, we make it clear that if the cost of fixed assets has been claimed as application of income while claiming exemption u/s.11 of the Act under Chapter-III of the Act in earlier assessment years, the assessee cannot claim depreciation on the same asset u/s.32 of the Act as the cost of fixed asset was already allowed as application of income and its cost has already become ‘Nil’. - Decided against assessee - I.T.A. No. 1693/Mds./2015 - - - Dated:- 10-2-2016 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER For The Appellant by : Mr.T.Banusekar,C.A For The Respondent : Mr.R.Duraipandian,JCIT, D.R ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: This appeal is filed by the Assessee is directed against the order of the Learned Commissioner of Income Tax(A)-17, Chennai dated 30.03.2015 pertaining to the assessment year 2009-10. 2. The assessee has raised the following grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 10 lakhs. Therefore, the ld. Assessing Officer arrived at a conclusion that the trust is not entitled to exemption u/s.11 of the Act as the trust is engaged in commercial activity by collecting fees to provide service and brought to tax the surplus and disallowed the depreciation claimed stating that the same does not relate to this assessment year. On appeal the Ld. CIT(A) confirmed the order of the ld. Assessing Officer. Against this, the assessee is in appeal before us. 4.1 The ld.A.R submitted that the main activities of the assessee trust are conducting review and courses for helping aspiring members/members in preparing for CISA and CISM certification conducted by the parent body, ISACA, USA and also conducting monthly professional education meetings wherein professionals address the participants for sharing knowledge and experience on methodologies, emerging concepts, skills updation etc. In addition to it, the assessee trust is organizing seminars and workshops on various topics in the field of information technology, in the areas of security, control and audit, and conducting annual security day conference to commemorate computer security day wherein renowned speaker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v Rao Bahadur Calavala Cunnan Chetty Charities_[19821_135_ITR 485_(Mad) 25. Devi Karumariamman Educational Trust v DCIT (Exemptions) [2015] 60 taxmann.com 439 (Madras) 26. ITO v The GRD Trust in ITA No.2537 / Mds / 2014 for the_AY 2010-11_- Chennai_ITAT 4.2 The Departmental Representative relied on the order of CIT. 5. We have heard both the parties and perused the material on record. Sec. 11 of the Act stipulates that the income from property held for charitable or religious purpose shall not be included in the total income of the previous year of the person in receipt of the income to be given effect in the manner as specified therein. The term 'charitable purpose' has not been defined under the statute; but for the inclusive nature of the term as specified under s. 2(15) of the Act, which as existed before the amendment is as follows: Sec. 2(15) : Charitable purpose includes relief of the poor, education, medical relief and the advancement of any other object of general public utility. As per Finance Act, 2008, the said provision was amended adding a 'proviso' w.e.f. 1st April, 2009 as follows : Provided that the advancement of any other o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed (Emphasis supplied). 5.3 The learned counsel points out that, the amendment was brought about as a measure of rationalization and simplification, streamlining the definition of charitable purpose and not as a measure of taxation. It is also stated that the concept of charity in India is wider, simultaneously adding that, by virtue of the amendment, the position that existed prior to 1st Feb., 1984 has been brought back and that is all. This however will not tilt the balance in any manner in the case of the assessee so as to take the activities outside the charitable purpose, particularly in view of the fact that activities of assessee trust will not constitute any trade or business. According to the ld. AR, to perform charity, income is inevitable and contended that the activities being pursued by the assessee may constitute a trade or business, if it is not applied for the purposes of charity. Contrary to this, the ld. DR submitted that though the object of the assessee is to carry on charitable activities, but it does not carry those charitable activities, and it was only conducting courses for helping persons in preparing for CISA and CISM certification conducing by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y appear in the second limb of cl. (b) are in connection with the service referred to the trade, commerce or business pursued by the institutions to which the service is given by the assessee. If the said words are actually in respect of the trade, commerce or business of the assessee itself, the said clause [second limb of the stipulation under cl. (b)] is rather otiose. Since the activity of the assessee involving any trade, commerce or business, is already excluded from the charitable purpose by virtue of the first limb [cl. (a)] itself, there is no necessity to stipulate further, by way of cl. (b), adding the words or any activity of rendering any service in relation to any trade, commerce or business .................. . As it stands so, giving a purposive interpretation to the statute, it may have to be read and understood that the second limb of exclusion under cl. (b) in relation to the service rendered by the assessee, the terms any trade, commerce or business refers to the trade, commerce or business pursued by the recipient to whom the service is rendered and in such circumstances, the activities carried on by the assessee cannot be considered as charitable activities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be one source for the principal activities and another source for incidental activities. In the present case, it was not possible to conclude that running of business in the form of activity is incidental to carrying on of main objective of the assessee-trust and it is the main business of the assessee. Therefore, the assessee is not protected by the provision stated in section 11 (4A), either. 6. Therefore, looking at the activities carried on by the assessee, we fully agree with the findings of the AO. In the present case, it is an admitted fact that the assessee has collected a sum of ₹ 5,68,050/- from members to appear for the examination in the course of certified information system auditor. The Trust has also collected a sum of ₹ 7,48,047/- as seminar fees from the participants. The activities of the assessee trust was in nature of trade, business, commerce or providing services in relation to any trade, business, commerce and it cannot be said that it falls under the purview of Sec.1(15) of the Act so as to say assessee is carrying on the charitable activities. 7. Further, the Apex Court in the case of Sole Trustee, Loka Shikshana Trust vs Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on etc., cannot be considered to be education within the meaning of section 2(15) of the Act. 9. In our opinion, education connotes in section 2(15) is the processing of training and developing the knowledge, skill, mind and character of students by normal schooling. In fact, the Apex Court has observed as follows at page 241 of the ITR: The sense in which the word education has been used in section 2(15) is the systematic instruction, schooling or training given to the young is preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word education has not been used in that wide and extended sense, according to which every acquisition of further knowledge constitutes education. According to this wide and extended sense, travelling is education, because as a travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge. Again, when you grow up and have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the ways of the world. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of coaching and preparing the students for appearing in various examinations conducted by the Board of Mining Examination and / or MI(1) section (a)(b) and the said coaching of students in an institute is not, in our opinion, an imparting of education which can be said to be a process of training and developing knowledge and character of students by normal schooling. A coaching institute cannot be said to be an institution where normal schooling is done. The definition of charitable purpose is inclusive and not exhaustive. It is further seen that the Gujarat High Court also had an occasion to consider identical issue in the case of Saurashtra Education Foundation vs C.I.T. (2005) 273 ITR 139 (Guj). The Gujarat High Court found that all kinds of education would not fall within the meaning of section 2(15) of the Act. The training, instruction, etc. would result in grant of a diploma or degree by a university or a governmental agency. In the case before us, admittedly, the taxpayer is conducting coaching classes. Therefore, it cannot be treated as a charitable institution as provided in section 2(15) of the Act. 11. In view of the above, we are of the opinion that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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