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2016 (5) TMI 629 - ITAT MUMBAI

2016 (5) TMI 629 - ITAT MUMBAI - TMI - Disallowance of claim of exemption under section 11 - Held that:- Assessee’s claim that it is imparting education or engaged in educational activity requires examination by verifying the entire documentary evidences brought on record. As the Departmental Authorities have not verified or applied their mind to the documentary evidences which according to the assessee demonstrate that it is involved in educational activities, we are inclined to restore the mat .....

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c utility, then he must establish on record that the dominant object of the assessee is to earn profit by engaging itself in business or commercial activity and it is not a charitable institution. - Decided in favour of assessee for statistical purposes. - ITA No. 4762/Mum./2013 - Dated:- 29-4-2016 - Shri Saktijit Dey, Judicial Member And Shri Rajesh Kumar, Accountant Member For the Petitioner : Shri Karthik Natarajan For the Respondent : Shri Rajesh Ojha ORDER Per Saktijit Dey, J. M. Instant ap .....

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t year under dispute, the assessee filed its return of income on 29th September 2009, declaring total income of nil after claiming exemption under section 11 of the Act. In the course of assessment proceedings, the Assessing Officer noticing that as per the income and expenditure account of the impugned assessment year, assessee has shown income amounting to 4,11,41,950, on account of fees received on professional development program, arranging technical meeting and seminar was of the view that .....

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account or other details. Therefore, the Assessing Officer proceeded to complete the assessment on the basis of material on record. On verifying the objects of the assessee and the income claimed to have been earned though education activity and related expenditure, the Assessing Officer was of the view that the assessee is arranging seminar, professional development program and earning income from consultancy, sale of study material. According to the Assessing Officer, the activities carried o .....

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2(15) w.e.f. 1st April 2009, since the assessee is earning income from activities of commercial nature, it is not entitled for exemption under section 11. The Assessing Officer observed, the word education as used in section 2(15) would mean systematic instruction in school or training given to young children in preparation of the work of life. He observed, considered in the context of ratio laid down by the Hon'ble Supreme Court, it cannot be said that the assessee is engaged in the activi .....

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supported by documentary evidences, but the learned Commissioner (Appeals) rejecting the submissions of the assessee confirmed the order of the Assessing Officer rejecting the assessee s claim of exemption under section 11 of the Act. 5. Learned Authorised Representative, reiterating the stand taken before the Departmental Authorities submitted, the assessee a charitable institution is primarily engaged in the activity of imparting education. Referring to the objects of the trust, the learned Au .....

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e assessment years till assessment year 2008-09. Learned Authorised Representative submitted, there being no change either in the object or in the activities carried on by the assessee on the basis of which registration under section 12A, was granted, assessee s claim of exemption under section 11 cannot be rejected merely for the reason that amendment was effected to section 2(15) of the Act by insertion of proviso which puts a restriction that the advancement of any other object of general pub .....

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imparting education, the proviso will not apply. For demonstrating the fact that the assessee is engaged in educational activity, the learned Authorised Representative drew our attention to the registration certificate issued by the Director General of Shipping and approving the assessee as a maritime training institution. Further, learned Authorised Representative referring to the circular dated 29th June 2001 submitted, the assessee was authorised to develop various grades of training and asse .....

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entative submitted, assessee has also conducted professional courses with fixed syllabus and to support such contention sought permission to produce the copies of syllabus by way of additional evidences. Thus, in sum and substance, it was submitted by the learned Authorised Representative that assessee is basically engaged in imparting education, hence, the proviso to section 2(15) will not apply. In support of such contention, learned Authorised Representative relied upon a number of decisions .....

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tence in the year 1997 with certain objects. The learned Commissioner after verifying the objects of the assessee being satisfied that it has been created for charitable purpose granted registration under section 12A of the Act. It is also not disputed that since obtaining registration under section 12A, the assessee had been claiming exemption under section 11 of the Act and which has also been granted to the assessee by the Department till assessment year 2008-09. Perusal of the assessment ord .....

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engaging itself in business / commercial activities. However, it needs to be mentioned, neither the Assessing Officer nor the learned Commissioner (Appeals) has given any categorical finding that there is any change either in the object or in the activities of the assessee in the impugned assessment year. Therefore, merely because the proviso to section 2(15) of the Act, prescribing that a trust or institution existing for the purpose of advancement of any other object of general public utility .....

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ich it was created and granted registration under section 12A of the Act. It has been held in a number of judicial pronouncements that if a trust or institution is created with the object of advancement of any other general public utility and in the process of carrying on such activity, it generates some income from activities of commercial nature but which is incidental and ancillary to its main charitable object, it will not loose its character as a charitable institution. Thus, what logically .....

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e applicable to the assessee. It is the contention of the assessee that it is engaged in educational activity. To demonstrate such fact, the learned Authorised Representative has relied upon a number of documentary evidences, a part of which was sought to be produced by way of additional evidence. On a perusal of the approval granted by the Director General of Shipping, it appears that assessee has been permitted to conduct some courses of maritime engineering as well as training program for whi .....

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on that assessee is not engaged in any educational activity they have totally overlooked these documentary evidences produced by the assessee. At least, the order passed by the authorities did not reveal so. Moreover, certain additional evidences produced by the assessee before this forum viz. syllabus for courses were admittedly not before the Departmental Authorities. Therefore, in our view, the assessee s claim that it is imparting education or engaged in educational activity requires examina .....

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