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Income Tax Officer (E) , Ward-1 (24 New Delhi Versus M/s Katha

2016 (11) TMI 1421 - ITAT DELHI

Benefit of exemption u/s 11 - proof of charitable activities - activities of education - Held that:- As carefully gone through the material available on the record. In the present case, it is an admitted fact that the assessee was engaged in the activities of education and to achieve the objects, the assessee was engaged in publication and sales of books. The profits from the said activities were used in order to feed the charitable activities of imparting the education and relief to poor. The l .....

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l across centres across Delhi reflecting the beneficiaries. The aforesaid observations of the ld. CIT(A) were not rebutted. - Decided against revenue - ITA No. 4244/Del/2016 - Dated:- 28-11-2016 - Sh. N. K. Saini, Accountant Member Assessee by : Mrs. Lalitha Krishnamurthy, CA Revenue by : Sh. Rajesh Kumar, Sr. DR ORDER This is an appeal by the department against the order dated 30.05.2016 of ld. CIT(A)-36, New Delhi. 2. The only effective ground raised in this appeal reads as under: 1. On the fa .....

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ering of any knowledge in the great school of life. 3. From the above ground, it is gathered that the grievance of the department relates to the deletion of disallowance made by the AO by denying the exemption claimed by the assessee u/s 11 of the Income Tax Act, 1961 (hereinafter referred to as the Act). 4. Facts of the case in brief are that the assessee filed its return of income on 15.10.2010 declaring net surplus of ₹ 34,51,895/- which was claimed as exempt u/s 11 of the Act. The said .....

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submission and stated that its publication mainly help children and adults discovered the joy of reading and books are mainly distributed to schools and libraries, it was also submitted that main object of the society are as under: (i) To manage & run schools for children to discover the joy of reading and the world of books, (ii) To stimulate, support and applaud individuality, spontaneity and creativity, kindly the holy curiosity in adults and children; enhance and support the natural int .....

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erwise manage libraries, reading rooms, documentation centres, non-formal education centres and other institutions of similar nature. 5. However, the AO did not find merit in the submissions of the assessee and denied the exemption claimed u/s 11 of the Act by observing that the case of the society is covered in the proviso inserted in Clause 15 of Section 2 of the Act w.e.f. 01.04.2009 and hence prima facie it is not existing for charitable. The AO determined the total income of the assessee at .....

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t ineligible for exemption u/s. 11 of the Act. Had the legislature thought of providing this, then it would not have made provisos to Section 2(15) just for the fourth limb of the definition of "Charitable purpose" i.e., the advancement of any other object of general public utility. In the present case, assessee is engaged in the charitable purpose of Education & relief of the poor. And for the attainment of the main object of the Society, it is carrying on the business of publicat .....

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chools and programs which are recognized and approved by National Open School (Deptt. Of Education, MHRD, Govt. of India). The copy of letter authorizing MOU between Katha and National Open School was also submitted to the AO. There are various categories of schools and vocational courses which are being run by the assessee. A list of 96 such schools was submitted. All the schools being run by assessee are meant for the poor kids living in slums and lowincome group housing colonies like Tuglakab .....

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ch is jurisdictional High Court and whose decision are binding on all. In the instant case, the assessee has been running schools, offering class 1-12 education to children of various age groups besides offering various vocational courses, at the end of which students are awarded certificates of "National Open School" a body of Govt. of India. Based on the above, it is beyond doubt that the assessee is fully engaged in imparting of "Education" as envisaged in the scheme of se .....

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that are linked with the syllabus and only after that to give it to their teachers for using them in the classroom to teach Hindi/Maths/History/Geography syllabus The sole object of producing stories teaching material/module and introducing them into the Katha classroom and distributed to MCD schools and other classroom, is to make the whole education process fun for children, and hence sustainable in the long run. It was argued that the AO has nowhere disputed the educational activities of Kath .....

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learning in the class room. Making of profit was never Katha's objective. In the relevant year, Katha had employe 81 teachers who were trained by Katha to manage their 98 schools (5 Formal Schools and 93 Pre-Schools). More than 9300 poor & under privileged were schooled. The activity of sale and publication of such books should not be seen in isolation. It has to be seen harmoniously with Katha's objective of engaging an underserved child to hold and read such books (well illustrate .....

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on' cannot be restricted to formal schooling or college and it must be understood in a broad sense where knowledge is passed on through any means to the ultimate recipient. Therefore, the activity carried on by the assessee cannot be said to be beyond its main aims and objects. The appellant placed reliance on various decisions like Science Olympiad Foundation 33 ITR 451 (Delhi ITAT) and Delhi Music Society (2012) 17 taxmann.com 49 Delhi(HC). 7. The ld. CIT(A) after considering the submissio .....

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rrying on "objects of General Public Utility". The proviso to Section 2(15) comes into play only if a society is pursuing objects of General Public Utility and as per Section 2(15), if the assessee is carrying out the activities of education or relief to poor or medical relief there is no such restriction of not being engaged in trade/commerce/business activities (in the nature of) to claim the deduction. As seen from the assessment order, the AO notes that the assessee has submitted a .....

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submission made by the assessee where in it has been given in detail about the Curriculum and Pedagogy of the society. The society is catering to children coming from under privileged families and providing education in such a manner as to merge them into main stream education by awarding certificates, recognized and approved by the National Open School. A list of schools was also submitted which includes schools in slums of Delhi, traffic lights and remedial centres across Delhi reflecting the .....

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