TMI Blog2019 (8) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... er authorities that the distance learning provided by the assessee to the students in its capacity as a learning centre of PTU would not fall within the realm of the definition of the term education as envisaged in Sec. 2(15). As per the literal meaning education is a process for facilitating learning or the acquisition of knowledge, skills, values and habits. Insofar the activities of the assessee society in its status as that of a learning centre are concerned, we find that the assessee in order to facilitate delivery of education provides the infrastructure along with the faculty as specified by the university; carries out timely completion of the courses; maintains records of the students; designs presentations, projects, assignments; conducts internal exams and provide internal assessment; conduct seminars and open house discussions from time to time and does all necessary acts as required by the university, therein rendering it responsible for delivery of education to the students. I mpact of deduction of TDS u/s 194H by PTU - agreement between centre and university that centre will get 45% of semester fee paid to University - HELD THAT:- Now when as per the PTU di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied to uphold the action of the Ld. Assessing Officer in restricting the claim with regard to donations to 50% of the gross total income 2. That the Ld. CIT(A) was not justified to uphold the action of the Ld. Assessing Officer in coming to the conclusion that the appellant had not been granted exemption u/s 80G. Further, the assessee has also raised before us the following Additional Ground of appeal: 1. That the Ld. Assessing Officer having not made any addition on account of the facts as stated in the reasons so recorded for the purpose of issuing notice u/s 148 of the Income Tax act, 1961 and therefore, the Assessing Officer could not have the jurisdiction to make other additions, having not made the addition on the basis of which, the reopening had been done. Hence the assessment as framed by the Ld. Assessing Officer is bad in law. As the assessee has assailed the validity of the assessment by way of raising the aforementioned additional ground of appeal, which involves purely a legal issue based on the facts available on record, therefore, the same is being admitted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lely for educational purposes, therefore, it was not eligible for claim of exemption under Sec. 10(23C)(iiiad). In order to fortify his aforesaid conviction, it was observed by the A.O that as per the aims and objects of the assessee society it was proposed to carry out other activities other than education, therefore, it could safely be concluded that it was not existing solely for education purposes which was the basic requirement for claim of exemption under Sec. 10(23C)(iiiad). On the basis of his aforesaid deliberations the A.O was of the view that the activities of the assessee were in the nature of business with a profit motive and not for a charitable purpose as defined in Sec. 2(15) of the IT Act. In the backdrop of his aforesaid observations the A.O declined to allow the claim of exemption raised by the assessee under Sec. 10(23C)(iiiad) and brought the amount of surplus of ₹ 12,66,771/- to tax as its business income . 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating at length on the contentions advanced by the assessee as regards its entitlement towards claim of exemption under Sec. 10(23C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttress his aforesaid contention that the assessee as a learning centre was providing education, the Ld. A.R drew our attention to the infrastructure details which was essentially to be provided by every learning centre as per the requirement of PTU. The Ld. A.R submitted that all semester and exam fee were to be collected from the students only in the name of Registrar, PTU payable at Jalandhar, except for the library fee of ₹ 1,000/- (refundable security). The ld. A.R submitted that from the semester fee collected PTU would pay 45% towards the share of the learning centre after separating the exam fee. Apart there from, it was submitted by the Ld. A.R that the lab charges for the applied technology courses could be charged by the learning centre from the students provided the same was approved by the university. In sum and substance, it was the contention of the Ld. A.R that the assessee as a learning centre of PTU was running a distance learning education programme, and had provided for the specified infrastructure as per the requirements of the university, as well as was responsible for the education delivery to the students by appointing a faculty as specified by the univ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to carry out educational programmes as prescribed by the university and make necessary provisions viz. (i) infrastructure as specified by the university; (ii) faculty as specified by the university; (iii) local marketing for promotion of courses as specified by the regional centre; (iv) timely course completion; (v) maintenance of records of students and MIS; (vi) designing of presentations, projects, assignments and exams; (vii) conducting internal exams and providing internal assessment; (viii) conducting seminars and open house discussions from time to time; (ix) follow guidelines, format and instruction issued by PTU and regional centre from time to time; (x) maintain the viability of PTU project at the learning centre; and (xi) responsibility for education delivery. The assessee society being an authorized learning centre has to honour the obligations set out by PTU for providing education to enrolled students and has to employ teachers for taking classes of enrolled students. In fact, the assessee which is an educational institution is imparting education through distance learning route in the society by running a learning centre affiliated to PTU. We have given a thoughtf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. However, we are of the considered view that now when as per the PTU distance education programme/arrangement between PTU and the assessee learning centre, it has been specifically stated that the assessee would be entitled to the share of 45% of the semester fee collected by the university (after separating exam fee), therefore, the mere fact that PTU had deducted TDS under Sec. 194H while making the said payment to the assessee would in no way lead to recharacterization of the said amount in the hands of the assessee. In sum and substance, the nature of receipt/amount in the hands of the assessee learning centre would continue to be governed and regulated as per its arrangement with the university, and not by the nomenclature given by the university i.e. PTU while making the said payment. We may herein observe that a similar issue was involved in the case before a coordinate bench of the Tribunal i.e. ITAT, Chennai Bench B in Soorya Educational Trust Vs. ITO [ITA No. 579 (Mds) of 2012; dated 31.05.2012]. As in the case before us, in the aforementioned case also the assessee was entitled for a share of fees collected by the university i.e. Annamalai University. The assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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