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Nandadevi Outdoor Leadership School India Versus DIT (Exemptions) , New Delhi

2017 (11) TMI 962 - ITAT DELHI

Rejection of application u/s 12AA - proof of charitable activities - Held that:- In the present case the assessee's activities are prima facie ‘educational activities‟. Further it is for the authority granting registration to give prima facie opinion with reasoning that the activities carried on by the assessee is eligible for registration u/s 12A of the Income Tax Act or not. Furthermore, while granting registration u/s 12A of the Act the registration authority is further required to look .....

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he Hon’ble Supreme Court has been considered. Therefore, we direct the ld CIT(E) to consider the application of the assessee by considering the above decisions and in the light of them needs to examine the object of the trust whether they are falling within the meaning of “education” or not as per section 2(15) of the Act. Appeal filed by the assessee is allowed for statistical purposes. - ITA No. 6616/Del/2013 - Dated:- 15-11-2017 - SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, A .....

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of the company as per Memorandum of Association are imparting the education related to wilderness skills and leadership, which is specialized form of wilderness and leadership education. Despite in being Education field, the required registrations were refused to assessee . All the facts proving the specialized knowledge were presented before the Learned Officer. • In its impugned order, the learned Director (Exemptions) had mentioned that the activities of the applicant would fall under th .....

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services outside India. • Learned Officer has erred in rejecting the registration by mentioning that the company is providing services outside India . • The assessee company provides service to its parent company for teaching the foreign students in India, for which there exists a prior agreement. • The Learned Officer has overlooked all the case laws mentioned and has issued impugned order. • Thus this Appeal. • The appellant begs to leave to amend, add or substitute a .....

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s 12A of the Act and for recognition u/s 80G on 27.09.2012. The assessee was asked to submit certain details, assessee submitted part details and further on 13.03.2013, the assessee was issued show cause notice stated that its application is to be rejected as it was hit provisions of section 2(15) of the Act. The assessee replied to the notice on 15.03.2013 and 18.03.2013. Further the ld DIT(E) rejected the application of the assessee holding that it does not engaged in the activities of educati .....

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rendering services outside India which is not permissible. Hence, he rejected the application of the assessee u/s 12AA and consequently, the application u/s 80G of the Act. Aggrieved the assessee preferred an appeal before the us. 5. The ld AR vehemently submitted that the assessee is carrying on education activities and not the object of general public utility. He made a written submission as under:- 1) The assessee is section 25 Company and engaged in the teaching of wilderness skills and lead .....

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ool India is a section 25 company registered in India as per the Companies Act 1956 and is limited by the shares. As per section 25 of the company Act, the company which intend to be in non profit sector or to be engaged in charitable activities, they may get themselves registered under this section. Once a company is registered under section 25, it has to apply for a license with Central Government and If Central Government is so satisfied as to its objects to be that of non profit or charitabl .....

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The Companies Act, 1956 25. Power to dispense with Limited in name of charitable or other company. (1) Where it is proved to the satisfaction of the Central Government that an association- (a) is about to be formed as a limited company for promoting commerce, art, science, Religion, charity or any other useful object, and (b) intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members, the Central Government may, by .....

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istered under this Act as a limited company are restricted to those specified in clause (a) of sub- section (1); and (b) that by its constitution the company is required to apply its profits, if any, or other income in promoting its objects and is prohibited from paying any dividend to its members, the Central Government may, by licence, authorise the company by a special resolution to change its name, including or consisting of the omission of the word Limited or the words Private Limited ; and .....

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e body to which the licence is granted, and where the grant is under sub- section (1), shall, if the Central Government so directs, be inserted in the memorandum, or in the articles, or partly in the one and partly in the other. 6. It shall not be necessary for a body to which a licence is so granted to use the word Limited or the words Private Limited as any part of its name and, unless its articles otherwise provide such body shall, if the Central Government by general or special, order so dir .....

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al Government shall give notice in writing of its intention to the body, and shall afford it an opportunity of being heard in opposition to the revocation. (8) (a) A body in respect of which a licence under this section is in force shall not alter the provisions of its memorandum with respect to its objects except with the previous approval of the Central Government signified in writing. (b) The Central Government may revoke the licence of such a body if it contravenes the provisions of clause ( .....

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of the things specified in clauses (a) to (g) of sub- section (1) of section 17, the provisions of this subsection shall be in addition to, and not in derogation of, the provisions of that section.] (9) Upon the revocation of a licence granted under this section to a body the name of which contains the words Chamber of Commerce , that body shall, within a period of three months from the date of revocation or such longer period as the Central Government may think fit to allow, change its name to .....

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es for every day during which the default continues. Articles of Association. 5. Further, a bare perusal of the definition of section 25 Companies Act makes it clear that Central Govt, after satisfying about the characteristics of objects and application of income, may grant iicense to these companies and these companies are completely debar from distribution of profits among it‟s members by way of dividend. Hence the Commissioner has erred in overlooking section 25 of the Companies Act. 6 .....

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e it is a charitable organization 9. Assessee seeks to rely on the judgment of Hon‟ble Delhi Bench of the ITAT in the case of Disha Mico credit in ITA NO 1374 of 2010 wherein it has been held approval of Govt vis-a- vis incorporation of the a section 25 Company would prima-facie prove that the objects are charitable in nature. Copy of the judgement is annexed in Decisions Paper Book and also available on the web site of ITAT. 10. It is next submitted that it is the matter of assessment whi .....

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lderness skilled is not falls under the ambit of education and hence assessee case falls under the ambit of proviso to section 2(15) of the Income Tax Act. In this regard the assessee wish to submit as under 13. Wilderness skill is an arm of outdoor education which involves many activities like rock climbing, hiking etc. As per the definition of outdoor education as available on internet it means organised learning that takes place in outdoors. The definition given is reproduced hereunder Outdoo .....

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actices of experiential education and environmental education. Forest School is an approach to outdoor learning which supports the development of self-esteem and confidence using a natural environment. Definitions Outdoor education can be simply defined as experiential learning in, for, or about the outdoors. The term outdoor education , however, is used broadly to refer to a range of organized activities that Outdoor education can be simply defined as experiential learning in, for, or about the .....

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ure recreation, adventure tourism, expeditionary learning, challenge education, experiential education, environmental education, forest schools and wilderness education. Consensus about the meaning of these terms is also difficult to achieve. However, outdoor education often uses or draws upon these related elements and/or informs these areas. The hallmark of outdoor education is its focus on the outdoor side of this education; whereas adventure education would focus on the adventure side and en .....

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bjects of general public utility. 15. It is next submitted that CIT has relied on the decision of Lok Skishan 101 ITR 234(Del) and holds that education means systematic learning through schooling. It is submitted that law has been developed a lot after this decision. And in number of cases it has been held that the decision of Supreme Court has not restricted the meaning of world education. It is submitted that Hon‟ble Gujrat High Court has interpreted the judgment of Hon‟ble Supreme .....

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the provisions of s. 11 r/w s. 2(15) of the Act which defines charitable purposes observed as under: The sense in which the word education has been used in s. 2(15) in the systematic instruction, schooling or training given to the 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 knowledge constitu .....

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the young has only cited an instance in order to indicate as to what the word education appearing in s. 2(15) of the Act which defines charitable purposes 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 then young . The expression schooling also means that schools, instmcts or educates (The Oxford English Dictionary, Vol. IX 217). The Supreme Court has observed that the word education also connotes the .....

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to include acquisition of even such knowledge. The observations of the Supreme Court only indicate proper confines of the word education in the context of the provisions of s. 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 .....

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g cases. Wherein the Hon‟ble Jurisdictional High Court after referring to the decision of Hon‟ble Gujarat High Court as quoted above and the decision of Lok Shikshan (Supra) has held that decisions of the Hon‟ble Apex Court cannot be read in way to restrict the meaning of education only to scholastic instructions but the other form of education also are included in the word education. a. Institute of Chartered Accountant Vs DIT Exemption 347 ITR 99(Del) Hon‟ble High Court .....

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23; appearing in s. 2(15) of the Act which defines charitable purposes 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, Vol. IX, p. 217). The Supreme Court has observed that the word education‟ also connotes the whole course of scholastic instruction which .....

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such knowledge. The observations of the Supreme Court only indicate the proper confines of the word education‟ in the context of the provisions of s. 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 o .....

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c. Delhi Music Society reported in 357 ITR 265 (Del) 17. In view of the above it is prayed that the appeal of the assessee may be allowed. 6. He further submitted a paper book wherein, the balance sheet of the assessee on 31.03.2011 was submitted. In the end he demonstrated by submitting a paper book containing several decisions. 7. The ld CIT DR vehemently submitted that the assessee is engaged in the activities which are not educational activities but are different as it involved etc. He furt .....

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ng and mountaineering, bagpacking, kayaking, sailing and rafting. It says that it is one of the world‟s biggest outdoor skill trainer and its parent is headquartered in the USA. It offered courses in the Himalayan by instructing. It is submitted that it not only teaches the outdoor skills but also keeps the course dynamic with evolving situations used as case studies for exploring leadership. Its course feature both leadership and technical outdoor skills. It has trained more than 280,000 .....

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e assessee falls under the category of education and not general public utility . The ld CIT(E) has heavy relied on the decision of the Hon ble Supreme Court in Lok Shikshana Trust 101 ITR 234. He was of the view that there is no class room teaching as formal schooling and not the activity as education as envisages by the assessee. The Hon ble Delhi High Court had an occasion to consider in 357 ITR 265 that whether a society teaching and promoting form of music and dance, western, Indian or any .....

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minister and maintain technical trading institute for pre sea and post sea training for the ships and maritime industry is an education activity or not. Hon ble High Court held that though courses are not approved it is an educational institute. Further the Hon ble Kolkata High Court in Swar Sangam and other Vs. CIT [ 368 ITR 395] held that teaching in fine arts, Indian music and dance is also educational activities. The activities of the assessee before us are no different than the activities d .....

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