TMI Blog2016 (5) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... enditures of grants or donations made with any specific conditions as may be imposed from the donors. No portion of the income and property of the society shall be paid or transferred, directly or indirectly, by way of dividends, bonus or otherwise or by way of profits to any persons who at any time are or have been members of the society or to any of them or to any persons claiming through them or any of them provided that nothing herein contained shall prevent the payment in good faith of remuneration to any members or other persons in return for any services rendered to the Institute. In our opinion, the Society is doing its activities as per its aims and objectives and working for a good cause and not earning any profit. Thus the registration u/s. 12A granted to the Applicant forthwith. - Decided in favour of assessee - I.T.A. No. 6259/Del/2013 - - - Dated:- 27-4-2016 - Shri H. S. Sidhu, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Petitioner : Sh. Niren Gupta, CA For the Respondent : Sh. D.K. Mishra, CIT(DR) ORDER Per H. S. Sidhu : JM This appeal by the Assessee is directed against the Order dated 30.9.2013 of the Ld. Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 and the Applicant is not eligible for registration u/s. 12 of the Act. As its gross receipts are more than the income as stipulated in 2nd proviso to section 2(15), the applicant s application for registration u/s. 12A is liable to be rejected. Accordingly, the Ld. DIT(E) rejected the Application for registration u/s. 12A vide impugned order dated 30.9.2013 passed u/s. 12AA(1)(b) r.w.s. 12A of the I.T. Act, 1961. For the sake of clarity, the operative portion of the Ld. DIT(E) s order dated 30.9.2013 vide para no. 3 to 7 at pages 1 to 7 is reproduced hereunder:- 3. The applicant society was created on 4th day March, 2002 various aims and objects. Some of them are given below :- i) To promote the advancement of welding/ cutting Hard facing and related technologies and allied sciences while the society may decided/ from time to time. ii) To facilitate exchange of ideas/ information/ development/ etc. amongst members/ by organising lecture workshops/ seminars/ symposia; conferences and development programme/ publish periodicals, books, journals, and magazines/ and develop software and educational proqrammes, video films and training packages relating to the obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asstt. Year 2013-14 1. Structured Course Subscription - - 10,71,086/- 2. Delegation / participation subscription 24,21,279 26,59,880/- 9,07,205/- 3. Support / sponsorship 24,22,692/- 10,50,650/- 22,24,300/- 4. Advertisement 1,62,000/- 4,65,200/- 8,10,000/- 5. Share income from collaboration 3,43,607/- 1,16,748/- 5,95,665/- 5.1 After going through the details filed by the applicant, it was noted that the applicants activities fall within the ambit of Advancement of any other object of general public utility and the applicant is charging fees for its services. As the nature of the activities carried out by the applicant were found to be in the nature of business, the applicant was giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court of India in the case of Sole Trustee Lok Shiksha Trust vs. CIT (1975) 10 ITR 234 (SC) wherein the Apex Court has explained the meaning of the word education as defined in section 2(15) of the Income Tax Act, 1961 by lying down as follows: The sense in which the word education has been used in section 2(15) is the systematic instruction, schooling or training given to young in 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 know/edge constitutes education. Similarly, Gujarat High Court in the case of Sorabji Nusserwanji Parekh 66 Taxman 411 held that the element of imparting education to the students or element of normal schooling where there are teachers and taught must be present and as to fall within the meaning of education. 6. The activity of the applicant on the contrary falls in the last limb i.e. advancement of any other object of general public utility, In this regard, a reference is made to the definition of 'charitable purpose' as given in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrying on what otherwise would be a business may say that he did not carrying on business because it was not his intention to make any income out of it. The Supreme Court followed the 1888 British decision in the case of Incorporated Council of Law (3 Tax - Cas 105) wherein it was held that it was not essential to carrying on of trade that the people carrying it on should make profit nor is it necessary that the people carrying it on should desire or wish to make a profit. In the case of Customs and Excise Commissioner vs. Lord Fissur (1981 STC 238), it was held that lack of pursuit of profit or earning did not prevent an activity from being a business if if in any other respect it plainly was. 6.3 Keeping in view the facts of the case, the activity being carried out by the applicant is held to be in the nature of 'business' as the applicant. 6.4 Thus, it is held that the activities of .the applicant fall under the category of GPU and are in the nature of business. The receipts of the applicant for the period ending as on 31/03/2013 are ₹ 56,08,255/-, the break-up of which is (i) Structured course subscription of ₹ 10,71,085/-; (ii) Seminar and dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... room training, distance learning programmes, discussions, seminars and field trips etc. for all sections of society. It was further submitted by him that Ld DIT(E) while admitting the fact that the society does engage in educational activity has also stated that it is engaged in skill enhancement activity and therefore not considered to be imparting education. She has rejected the application based on wrong presumptions and contradiction in own arguments and wrongly inferred the activity to be General Public Utility (GPU) and is therefore the order is bad both on facts and in law. It was further submitted that the Ld DIT(E) has admitted the fact that the activities of the appellant intends to upgrade the skills of the interested people in trade and students in the field of welding for which it is running regular courses, distance learning courses and entered into MOU with various Universities. The Ld DIT(E) has drawn inference from the fact that a certain fee is charged for such activity which is in the nature of business and therefore does not merit status of charitable activity. The conclusion drawn by the Ld DIT(E) is entirely misplaced, incorrect and not based on complete fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ams, video films and training packages relating to the objectives of the Society. iii. To offer flexible class room/distance learning programs in various aspects of welding related technology that suit the requirement of various levels. iv. To promote professional exchange of information, experience and advanced training within and among various countries across the globe. v. To enter into arrangements for providing members of the Society with advice and assistance on all matters connected with the objects covered by this Memorandum. vi. To admit any person(s) to be Honorary Member(s) of the Society on such terms, and to confer on them such rights and privileges, as may seem expedient. vii. To approach, negotiate, confer with and/or act in any advisory capacity Government, Municipal and Local Authorities, and various economic segments/industries with respect To the objects covered by this Memorandum with a view to offer consultancy / advice to industry and other segments of the country's economy. viii. To give awards, scholarships, fellowships, and grants to individuals/teams of professionals and organisations in regard to specific projects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, lease or otherwise land and buildings and any other property real or personal, and dispose off such property or any rights and privileges which the Society for the purposes thereof may from time to time think proper to acquire or dispose in the interest and objects of the society. g) pay out of the funds of the society or any particular part of such funds all expenses or incidental to the formation of the society and management and administration of any of the foregoing objects. h) establish for the purpose aforesaid, no office at Delhi and engage such staff as may be necessary. i) to sign, execute, and deliver for the purpose aforesaid, such assurances and deeds as may be necessary. j) do all such lawful acts, deeds or things as are incidental or conducive to attainment of the objects. 7.1 We also reproduce the relevant portion of the Rules Regulations of the Society relating to source of income and utilization of funds. i) The main sources of income of the Society will be membership fee, donations, royalties, government grants, savings from conferences / workshops, seminars, course fees, sale of publication etc. ii) The income and prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endees to meet the cost of food, printing materials, venue rent, honorariums to speaker's and trainers etc. There are programmes which are conducted free or at concessional amounts also depending on the type of people attending the education programmes. Another head of income is through advertisement and sponsorship contributions received from entities who wish to participate in the programmes. These entities derive the benefit of showcasing themselves to the trained people that go through the programmes and also providing a window to the people regarding the latest In technology and the linkages in the field of welding between the people, technology and equipment. 7.4 We find that the meaning of charitable' purpose has been discussed at length by various courts. The Hon'ble Supreme Court in the case of Sole Trustee LOka Shikshana Trust 101 ITR 234 has held as under:- . charitable purpose which is only indicated but not defined by section 2(15) of the Act? It is true that charity does not necessarily exclude carrying on an activity which yields profit, provided that profit has to be used up for what is recognized as charity. The very concept of charity den ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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. What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by normal schooling. On going through the aforesaid contents of the judgment, it is crystal clear that the applicant-society is actively engaged in the above activity through its systematic class room / distance learning programmes symposiums, seminars etc. However, it also maintains linkages with universities and other educational institutions to collaborate in imparting education on the specialized subject relate to welding and issue certificates to candidates for completion of the course. After perusing the copies of the agreement with various recognized universities such as Annamalai University for Distance Learning programmes, Sri Ram ..... X X X X Extracts X X X X X X X X Extracts X X X X
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