TMI Blog2020 (1) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... at effect was taken by the assessee. The contention of the assessee regarding applicability of the proviso to section 2(15) of the Act requires examination keeping in view the decision of DIT (E.) v/s Lala Lajpatrai, [ 2016 (4) TMI 641 - BOMBAY HIGH COURT] wherein has held that the test to determine as to what would be a charitable purpose within the meaning of section 2(15) of the Act is to ascertain what is the dominant object/activity. The Court has observed that if the dominant object is the activity of providing education, it will be charitable purpose under section 2(15) of the Act, even though, some profit arises from such activity. Therefore, assessee s contention regarding applicability of proviso to section 2(15) of the Act requires examination. Further, assessee s claim of exemption u/ 10(23C)(iiiab) or 10(23C)(vi) of the Act also requires examination keeping in view the orders passed by the learned Chief Commissioner of Income Tax, Mumbai, under section 10(23C)(vi) of the Act and also considering the fact that the assessee has been recognized as a deemed university and receiving substantial grant from the Government. Since the aforesaid claim of the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h all the provisions of UGC for funding and support as a State owned deemed University. When the assessee was a part of Mumbai University, the income earned by it formed part of income of Mumbai University, and was exempt under section 10(23C) of the Act. For the impugned assessment years, the assessee filed its return of income under section 139 of the Act declared nil income after claiming exemption under section 11 of the Act. The Assessing Officer, in the course of assessment proceedings, noticed that during the year under consideration the assessee received consultancy fee. Noticing this, the Assessing Officer called upon the assessee to explain why the consultancy fee received should not be treated as business income and brought to tax. In reply, it was submitted that certain projects were undertaken with a view to carry out research and help the students/fellows of the Institution to gain actual working experience in live projects in the subject during the course of their studies. The training session helps in imparting the results of the research to the Industry, hence, serves as a practical experience and at the same time it helps the Institute in giving research in new pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the Assessing Officer. 4. The learned Authorised Representative, reiterating the stand taken before the Revenue authorities, submitted that the assessee is a purely educational institution and is a deemed university. He submitted, assessee is not only granted deemed university status by the Ministry of Human Resources Development, but it received grant from the Government under UGC regulations. He submitted, the assessee is also approved as an educational Institution for providing chemical engineering course by AICTE which is the competent authority to grant approval to technical institutions. The learned Authorised Representative submitted, the aforesaid facts clearly establish that the assessee is an Institution created for providing education, hence, is covered under the definition of charitable purpose as per section 2(15) of the Act. He submitted, the consultancy service provided for different projects is part of its research and educational activity involving the faculty and students, therefore, ancillary and incidental to its main object of providing education. That being the case, the consultancy activity cannot be considered as a separate activity di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing solely for education purpose and not for the purpose of profit. He submitted, subsequently, learned Chief Commissioner of Income Tax, Mumbai, has granted approval under section 10(23C)(vi) of the Act to the assessee for the assessment year 2014 15, thereby, recognising the assessee as a university/other educational institution existing solely for the purpose of education and not for the purpose of profit. To support the aforesaid submissions, the learned Authorised Representative sought permission of the Bench to furnish the relevant orders of learned Chief Commissioner of Income Tax, Mumbai, and few more documents as additional evidences. Thus, he submitted, assessee is otherwise eligible for exemption either under section 10(23C)(iiiab) or under section 10(23C)(vi) of the Act as not only it is a University/other educational institution existing solely for the purpose of education and not for profit but has received substantial fund from the Government. He submitted, assessee s alternative claim of exemption under section 10(23C)(iiiab) or under section 10(23C)(vi) of the Act, though, was raised before the Assessing Officer and learned Commissioner (Appeals), however, they hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a perusal of the additional evidences filed before us, prima facie, we are of the view that the assessee has been recognized as a deemed university, hence, falls within the category of university/other educational institution covered under section 10(23C)(iiib) or 10(23C)(vi) of the Act. Further, it has been recognized as an educational institution by competent authorities of the Government. Now it is fairly well settled that the proviso to section 2(15) of the Act applies only to the activity of the advancement of any other object of general public utility as per the definition of charitable purpose under section 2(15) of the Act. It is the contention of the assessee that since it is engaged in the activity of providing education, the proviso to section 2(15) of the Act is not applicable. The aforesaid aspect has not been examined or dealt with by the Tribunal in assessment year 2010 11 probably because no pleading to that effect was taken by the assessee. Be that as it may, in our considered opinion, the contention of the assessee regarding applicability of the proviso to section 2(15) of the Act requires examination keeping in view the decision of the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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