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Asstt. Director of Income Tax (OSD) (E) , Trust Ward-III, New Delhi Versus Bird Education Society for Travel & Tourism

2016 (5) TMI 875 - ITAT DELHI

Denial of exemption u/s 11 & 12 - activities of the assessee institution questioned - whether activities carried out by the assessee fell outside the purview of charitable purpose as per section 2(15)? - Held that:- AO is found to have referred to the activities in the assessment order. However, he has not cared to factually examine the same. Satisfied by enumerating the activities, he has failed to examine the supporting facts and requirements qua the specific courses; duration of the course; t .....

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am as approved and recognized - A perusal of the finding arrived at by the CIT(A) makes it clear that the details of the various courses conducted by the assessee alongwith rules and regulations adhered to by it depicting its operating procedures were all considered and examined in extenso and neither these findings have been upset in the present proceedings nor anything upsetting these has been referred to by the Revenue in the Remand Report filed by the AO before the CIT(A). - We furth .....

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try standard requirements by way of their Agreements/approvals etc on a year to year basis after due care and diligence, considering the adherence of standards and requirements to be met in the industry specific skill/qualification requirements. - Considering the peculiar facts and circumstances of the case and the position of the law which is further found supported by the decision of the Hon’ble Bombay High Court in the case of DIT vs. Women’s India Trust (2015 (4) TMI 976 - BOMBAY HIGH CO .....

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nue assailing the correctness of the order dated 28.2.2012 of CIT (A) -XII New Delhi pertaining to 2008-09 assessment year on the following grounds :- 1. "On the facts & in the circumstances of the case and in law, the Ld. CIT (A) has erred in allowing exemption u/s 11 & 12 of the Act because the activities carried out by the assessee fell outside the purview of charitable purpose as per section 2(15) of the Act. 2. On the facts & in the circumstances of the case and in law, the .....

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ncome and expenditure account with relevant schedules. 3. The main objects of the society are as under :- "3.1. To impart specialized training in the field travel & tourism to existing Travel & Tourism Industry personnel national & International levels. 3.2. To impart basic and advanced level training in the field of Travel & Tourism to young graduate and undergraduate aspirants to the Travel & Tourism Industry at the National & International Level. 3.3. To create po .....

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dings, the AO required the assessee to justify that the activities were covered within the meaning of education as per the definition of charitable purposes contained in Section 2(15) of the Income Tax Act 1961. The triggering factor for this query was the fact on record that the assessee had provided coaching / training for the period under consideration for which purposes a sum of ₹ 70,36,300/- had been received. The coaching/training was stated to be provided for courses like computer r .....

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ing through all these submissions, it is seen that crux of assessee's submissions are contained in letter dt. 10.12.2010 and relevant portion of such submissions, pertaining to the issue under reference (para-5 above), are extracted below:- "As already explained in our earlier submissions the Society is broadly conducting eight courses / training programmes. All these courses educate the desirous students about the various aspects of the travel industry. These courses have an eligibilit .....

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oma and certificate courses in travel/tourism / aviation / cargo disciplines as a part of distance learning programme through its Authorised Centres. Bird Education Society for Travel & Tourism {BESTT} is one of the authorized centres. Distance learning programme is a career oriented training programme for the aviation '1 learning sector providing students with industry wide knowledge and globally recognized qualifications. Every course being offered by BESTT is highly structured and has .....

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l & Tourism" is a course which is being conducted in conjunction with Miranda House, University of Delhi and has the approval of University Grant Commission .... "Computerized Reservation System" course is recognized by the New Delhi Young Men's Christian Association [YMCA] under its Human Potential development Programme. These courses are being offered to the YMCA sponsored students at a subsidized fee. "Tally" course is being offered by BESTT as an authorized T .....

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se may not be presently approved by a government regulatory authority in the field of education as the same is still to form a part of regular college curriculum as the infrastructure required to conduct these courses is not there but as the demand for professionals in the field of travel and tourism grows this field I will get the due recognition". 3.3. Since the courses admittedly were not accredited by UGC/Secondary Board, etc. in India, the AO concluded that the courses conducted did no .....

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r basis and it was basically a business venture for spreading IATA s Authorized Training Centres. 3.4. In the circumstances, it was hold that equipping the persons with the rules and regulations for ticketing, air ticketing, air travel, cargo etc. could not be considered educating them. Reliance was placed upon in the case of Sole Trustee Lok Shikshan Trust vs. CIT 101 ITR 234 (SC) and Saurashtra Education Foundation vs. CIT (2005) 273 ITR 139 (Guj.). It was concluded that the assessee was only .....

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he provisions of section 2(24)(iia) were held to attract taxability leading to the assessment being concluded at an income of ₹ 2,30,71,122/-. 4. Aggrieved, the assessee travelled in appeal before CIT(A) and submitted that the assessee in the year under consideration carried on the same activities as carried on in the earlier years namely the activities of providing vocational training in the field of travel and tourism by offering short term courses. Some of these short term courses it wa .....

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f shorter duration aimed at providing not only techno managerial knowledge and skills, development of personality but also cross cultural orientation. As an IATA authorized training centre it was submitted it not only was approved by IATA but also Director General of Civil Aviation (DGCA) and it had been imparting training at a very highly subsidized fee, to young men and women in the field of travel and tourism in association with the following:- 1. Delhi Tourism and Transport Development Corpo .....

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sue was supported by Oxford Academy for careers Development vs. Chief CIT reported in 315 ITR 382(All). It was further submitted that the AO has incorrectly interpreted the provision of section 2(15) of the Act and the amendment carried out by the Finance Act 2008 w.e.f 1.4.2009 and the relevant legislative intentions which infact had been explained by the CBDT Instruction No. 1 dated 27th March, 2009 reported in 310 ITR 42(St) relevant at page 52 to 53. Reliance was placed upon the case of Delh .....

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t in the peculiar facts and circumstances of the case, nothing has been placed before us to upset the detailed finding of fact arrived at by the CIT(A). We find that the claim of the assessee made before the CIT(A) that the arguments advanced before the AO are being re-iterated has not been upset. We find that in the facts of the present appeal, the distinction on facts drawn from the decision relied upon by the AO were confronted to the AO in the remand proceedings by the CIT(A) and we have see .....

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as submitted that the registration granted to the assessee till date has not been withdrawn. The assessee it is seen is a society registered under the Societies Registration Act XXI of 1860 vide Registration No. S-33130 of 1998 dated 15th June 1998. It is also a fact that the assessee was granted registration u/s 12A of the Act vide order No. DIT(E)/2001-02/B- 858/131 dated 29th May, 2002 effective from 1st April, 2002. The ld.CIT(A) takes note of the fact that the 12A exemption has not been wit .....

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st and relying upon the judicial precedent as considered by the aforesaid decisions of the Hon ble Allahabad High Court namely Oxford Academy for careers Development and the decision of the Delhi High Court in the case of Delhi Music Society has submitted that there is a pre-defined training program which is strictly adhered to. The requisite information and details have specifically been called for by the First Appellate Authority and have been filed an elaborate mention to these facts at page .....

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has mis-directed himself by envisaging a very narrow scope of the term Education as appearing in section 2(15) of the Income Tax Act. The facts qua the issue which have already been addressed are not being repeated and on the nature of activities conducted by the assessee there is no dispute the dispute is solely on the ground that the education is not recognised by UGC/Board etc. under the aegis of the Government. We find that the narrow meaning with which the education could be considered has .....

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ording to which every acquisition of further knowledge constitutes education. According to this wide and extended sense, travelling is education, because as a result of 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 having dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the .....

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sense in which the word education is used in cl.(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. 9. The import and the context of the above observations of the Hon ble Apex Court came to be considered by the Hon ble Gujarat High Court in the case of Gujarat State Co-operative Union vs. CIT reported in 195 ITR 279 (Guj.) and we shall be referring to these observations in gr .....

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respectively. The activities of conducting of seminars and running four cooperative training centres; conducting special courses for employee of urban cooperative banks, district co-operative banks and market class, and also seminars. The assessee therein also conducted co-operative education program, consumer education programme, women co-operative education programme etc. amongst its list of activities in the context of these aforesaid activities. 10. Considering Section 2(15) and the case of .....

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es" is intended to mean. We are certain that these observations were not intended to keep out of the meaning of the word "education", persons other than "young". The expression "schooling" also means "that schools, instructs or educates" (The Oxford English dictionary, Vo!. IX, p. 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 i .....

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vations of the Supreme Court only indicate the proper confines of the word "education" in the context of the provisions of section 2(15) of the Act. It will not be proper to construe these observations in a manner in which they are construed by the Tribunal when it infers from these observations, in para 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 knowledg .....

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O is found to have referred to the activities in the assessment order. However, he has not cared to factually examine the same. Satisfied by enumerating the activities, he has failed to examine the supporting facts and requirements qua the specific courses; duration of the course; the course fee and the assessee s explanation and instead of examining and considering the same which evidently was filed and made available he has instead jumped to the conclusion based on decisions whose facts also h .....

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cate Course in Travel & Tourism in collaboration with Miranda House Computerized Reservation Systems in collaboration with YMCA lATA/UFTAA Foundation lATA/GDS Fares Ticketing Tally Financial Accounting Programme Soft Skills 12. A perusal of the finding arrived at by the CIT(A) makes it clear that the details of the various courses conducted by the assessee alongwith rules and regulations adhered to by it depicting its operating procedures were all considered and examined in extenso and neith .....

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ed by it along with rules and regulations articulated by it depicting its operating procedures, These details were furnished by the appellant and I have examined the same. It was observed that for each and every course conducted by the appellant there is a pre-defined training program which is strictly adhered to, The training program clearly sets the rules and regulations as regards eligibility criteria for course, registration and fee procedure, course schedule, maintenance of attendance recor .....

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ent/set is prepared by Director General of Civil Aviation (DGCA), education and training i provided by the appellant, examination paper is approved by DGCA, examination is conducted by appellant. and the Diploma Certificate approved by DGCA is awarded by appellant to the successful candidates/students. As regards Certificate Course in Travel & Tourism in collaboration with Miranda House the course content is set Miranda House, education and training is provided by the appellant, examination .....

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ts who have been unsuccessful in the examinations. These students then re-appeared for re-examination with the appellant in the next term of the relevant course. A proper attendance record is being, maintained by the appellant for all the students as well as the teachers and visiting facilit : The appellant has also set operating standards for the various courses conducted by it. These operating standards clearly ear mark for each course the periodicity, examination schedule, duration, eligibili .....

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t;11. Even if these tests are applied to the case of the petitioner, the petitioner fulfils them. As has already been noticed, the petitioner is teaching and promoting all form of music and dance, western, Indian or any other. In accordance with the object, it is running a music school in Delhi, collecting tuition fee and admission fee from the students. Teachers have been employed and they have been paid salaries. Expenditure is also incurred on the maintenance of musical instruments. All these .....

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aculty comprises of 30 teachers with 25 of them being Grade 8 and above in western music. There is reference to scholarships that are open to the students including waiver of fees from 25% to 90%. It has been stated that several students of the school have gone on for higher musical studies to places like Moscow, London, New York, Prague and Rome. The schedule of fees effective from April, 2011 i also made part of the annexure. There are rules and regulations governing the running of the school .....

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om time to time and that attendance in such workshops would be compulsory, that students who report late by more than 20 minutes may be marked absent and so on. There is also a rule that the students; who are irregular in attending the classes or absent them elves frequently for long periods without prior intimation, would be removed from the rolls and if any of the students are found lacking in application or discipline, they are liable to be terminated by the Principal. 12. It is seen from the .....

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normal schooling". It cannot be doubted that, having regard to the manner in which the petitioner runs the music school, that there is imparting of systematic instruction, schooling or training given to the students so that they attain proficiency in the field of their choice - vocal or instrumental in western classical music. .................. 16. Another aspect to be noticed is that normally coaching centres are run for shorter periods and they have no strict rules and regulations as an .....

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n but also considering the approvals/recognition of sector specific competent Authority like DGCA at the national level and IATA at the global level who are presumed to have given their giving approvals as per industry standard requirements by way of their Agreements/approvals etc on a year to year basis after due care and diligence, considering the adherence of standards and requirements to be met in the industry specific skill/qualification requirements. 15. It may also be appropriate to also .....

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the provisions of Section 10(22) of the Act, the High Court observed as under:- "We are also unable to accept the contention of Mr. Maitra that an educational institution to be eligible for exemption under Section 10(22) should be affiliated to any university or any board. Section 10(22) does not impose such a condition. So long as the income is derived from an educational institution existing solely for educational purposes and not for purposes of profit such income is entitled to exempti .....

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the objection of the prescribed authority that the petitioner is not affiliated to, or recognized by any university or board in India and that it merely awards certificates or grades which are issued by the Trinity College and Royal School of Music, London. Since Section 10 (23C)(vi) also uses the same language as Section 10(22), the same principle should govern the interpretation of that provision also. " 16. We further find that the AO in his Remand Report in the face of the claims of th .....

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I for CA Entrance Examination. Apart from that it was also holding refresher courses for teachers teaching in various schools. Further the issue under consideration in the facts of that case was exemption claimed u/s 10(22) of the Act. We find that in the circumstances, reliance on the said decision was misplaced. In fact the Hon ble Gujrat High Court itself has held that there is a difference in the concept of education as envisaged u/s 2(15) with respect to section 11 of the Act vis a vis sect .....

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ng formal education and without being affiliated to or accountable to any authority. Such a trust can certainly be considered as qualifying for exemption under section 11 (1)(a) read with section 2(15), hut the term 'the educational institution' contemplated by section I0 (22) is a narrower concept. Though 'educational institution' and the educational activities are closely interconnected; in section 11 (1)(a), read with section 2(15) it is the activities which are in focus, wher .....

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not been assailed by the Revenue. Accordingly, considering the decision of the ITAT in the case of Surat City Gymkhana vs. ACIT reported in 76 ITD 127 (Ahd.) which has been upheld by the Hon ble Gujarat High Court and stands affirmed by the Hon ble Apex Court in the case of ACIT vs. Surat City Gymkhana (SC), we find that it is also worth referring to at this juncture. Thus, reference to the following discussions from the order of ITAT in the facts of that case would be appropriate in the facts .....

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e institution relating to such prior year or years for which such accounts have been made up. The grant of registration by the CIT under section 12A does not constitute an empty formality which is to be completed in a routine and mechanical fashion by the CIT without any scrutiny regarding the charitable nature of the trust or institution required to be registered under the 1. T. Act. If goes without saying that registration under section 12A is to be granted only if the CIT is satisfied that th .....

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n it is beyond the powers of the Assessing Officer to reject the claim of exemption under section 11 by looking into the objects of the association and holding the same as non-charitable in nature. In support of the view being taken by us here, reliance is placed on the judgment of Calcutta High Court in Ananda Marga Pracharaka Sangh v. CIT [1996J 218 ITR 254.At page 270 of the report their Lordships observed as follows: "It may be mentioned here that the registration of the charitable soci .....

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ion for as far as back as three years to accompany each application. The requirement of obtaining the details as also the copies of the past accounts cannot be said to be a ceremonial one. The purpose is to examine the objects of creation a' well as an empirical study of the past activities of the applicant for three years where the application is made belatedly so that the Commissioner could come to a conclusion on examination of all the factors that the applicant is really a charitable tru .....

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