TMI Blog2019 (7) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly we are of the view that the tax authorities are justified in rejecting the claim of exemption u/s 10(23C)(iiiab) and (iiiad). Disallowance u/s 40(a)(ia) - TDS u/s 194C - trust are covered for TDS or not - in earlier round ITAT has held that subcontract given to the franchisees would fall under the category of work defined in sec.194C - scope of provisions of sec.194C has been extended to include Association of persons only from 1st June, 2008 - HELD THAT:- The explanatory memorandum makes it clear that the scope of sec.194C was extended to cover Association of Persons from 1st June 2008, since a large number of works contracts are executed by a number of Special Purpose Vehicles (SPVs) structured as Joint Ventures/Consortiums in the nature of Association of Persons. There is no dispute that the assessee is a trust and hence, in view of specific provisions of sec.194C, it shall be liable to deduct tax at source. It may be pertinent to note that the Trusts file their return of income under the category of Association of Persons only, meaning thereby, the category Association of Persons would encompass different forms of association, of which SPVs and Trusts are o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to the claim of exemption u/s 10(23C) of the Act. The Ld A.R submitted that the assessee is running educational institution and it is substantially financed by the Government. Accordingly he submitted that the assessee is eligible for exemption u/s 10(23C)(iiiab) of the Act. The Ld A.R, in the alternative, submitted that the assessee is also eligible for exemption u/s 10(23C)(iiiad) also, since its gross receipts do not exceed the prescribed limits in both the years under consideration. 4. On the contrary, the Ld D.R submitted that the assessee had obtained works contract from the Office of Commissioner of Social Welfare, Government of Karnataka to implement its scheme of conducting Vocational training courses in the fields of (1) Radio and TV repairs for 6 months; (2) training in electrical wiring for 6 months; (3) Fitter training for 6 months and (4) Training in Vehicle repairs for 6 months to people belonging to Scheduled Caste in various districts of the State of Karnataka. Accordingly, the assessee has appointed franchisees to conduct above cited training programmes on sub-contract basis. Accordingly, the Ld D.R submitted that the assessee cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the case of Mudra Foundation for Communications Research Education vs. CCIT (2016)(237 Taxman 139) by Hon ble Gujarat High Court in support of his contentions. 6. We have heard rival contentions on this issue and perused the record. We notice that the provisions of sec. 10(23C) uses the expression University or other educational institution . Since a University should be managing the education system of the educational institutions registered under it, it was categorised as separate category and the educational institutions have been categorised as other educational institution . If the contention of the assessee that the expression other educational institution should be considered as a third category is accepted as correct for a moment, then the formal educational institutions shall be out of the purview of provisions of se. 10(23C) of the Act. In our view, the such kind of interpretation would defeat the purpose of sec.10(23C) of the Act. Accordingly, we are of the view that the meaning given to the word education used in sec. 2(15) of the Act should be adopted as it is in order to understand the meaning of educational institution . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the ways of the world. If you are not careful, your wallet is liable to be stolen or you are liable to be cheated by some unscrupulous person. The thief who removes your wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer. If you visit a night club, you get acquainted with and add to your knowledge about some of the not much revealed realities and mysteries of life. All this in a way is education in the great school of life. But that is not the sense in which the word education is used in clause (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. 5. From the above judgment of the Apex Court it would be abundantly clear that there should be a systematic instruction to the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, instruction, etc. would result in grant of a diploma or degree by a university or a governmental agency. In the case before us, admittedly, the taxpayer is conducting coaching classes. Therefore, it cannot be treated as a charitable institution as provided in section 2(15) of the Act. This Tribunal is of the opinion that the taxpayer is not eligible for registration u/s 12AA of the Act. Accordingly, the order of the lower authority is confirmed. 9. In the instant case, we have noticed that the assessee has been awarded a contract to conduct short term Vocational training Courses in various districts of State of Karnataka. The assessee has undertaken the Contract and has appointed franchisees on sub-contract basis. Though it is not clear as to whether the assessee itself has conducted training or not, yet the vocational training given by the assessee, if any, and the franchisees can, in our view, fall under the category of Coaching institutes only, since the same would not fall under the category of normal schooling and systematic instruction and education explained by Hon ble Supreme Court and other High Courts. In any case, we have noticed that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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