TMI Blog1992 (2) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... ppealed to the Commissioner of Income-tax (Appeals) for some years and to the Appellate Assistant Commissioner for other years and these appeals were allowed on both the counts. The appellate authorities held that the assessee was entitled to carry forward and set off of past losses and further it was also entitled to exemption in respect of its income under section 10(22) of the Act. The Revenue challenged the order of the appellate authorities before the Income-tax Appellate Tribunal and the Tribunal, by its common order dated September 15, 1984, for all the assessment years, held that the assessee was not entitled to carry forward and set off of the past losses in rectification proceedings as it was debatable as to whether the assessee had any business income and such questions could not be gone into in rectification proceedings. The Tribunal, however, held that the past losses were ascertained by the concerned Incometax Officer in their respective years and, therefore, the Income-tax Officer was bound to examine his records for deciding whether previous years' losses were available for being carried forward and set off against the income in subsequent years. The Tribunal also h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , any income of a university or other educational institution existing solely for educational purposes and not for purposes of profit, shall not be included. The objects of the assessee Co-operative Union as also the activities actually carried on by it will throw considerable light on the question whether the assessee-Co-operative Union is existing solely for educational purposes or not. Bye-law 2 of the bye-laws of the assessee-Co-operative Union, a copy of which is placed on record by the consent of both learned counsel for our consideration, enumerates therein eight objects of the assessee-Co-operative Union and they read as under: (i) to impart education to members of co-operative societies and to workers in the co-operative movement ; (ii) to act as a co-ordinating agency on all matters pertaining to co-operative education and function as a body of experts in matters relating to education; (iii) to function as a focusing centre on non-official opinion on various subjects affecting the movement and for representing it in proper quarters ; (iv) to further the spread of the co-operative movement; (v) to promote the study of problems connected with co-operation and carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) of bye-law 2, the object enumerated is that the assessee will function as focusing centre on non-official opinion on various subjects affecting the movement and for representing it in proper quarters. Under clause (iv), its object is to further the spread of the co-operative movement. Clause (vi) refers to the objects of opening circulating libraries, publishing periodicals, books, pamphlets, and literature in general on co-operation, rural development and allied subjects, while clause (viii) refers to running of a printing press. It is difficult to accept the contention of the Revenue that these clauses indicate any object other than educational for which the assessee seems to have been established. On totality of the objects enumerated in bye-law 2, it is clear to us that the assessee-Co-operative Union is existing solely for educational purposes and even the objects which are enumerated in clauses (iii), (iv), (vi) and (viii) are referable to such purposes. It will not be open to read any of these clauses in isolation torn of its context for the purposes of urging that the assessee is not existing solely for educational purposes as envisaged under section 10(22) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f profit. The assessee was publishing two journals : (1) "Sahakar", a weekly journal having a circulation of 6,700 copies, and (2) "Gram Swaraj", a monthly magazine having a circulation of 7,150 copies. Both these journals were published in connection with the activities of the assessee and on the subject of co-operative movement. The assessee was also having an audio-visual unit for exhibiting films on the co-operative movement to educate the masses. It also appears that the assessee maintained a rich library on the subject of co-operation. As noticed above, from the objects of the assessee, it is conducting training centres and colleges for various courses having a bearing on the field of co-operative movement. It appears to us that the decision of the Tribunal which seeks to rest it on the observations made by the Supreme Court in Loka Shikshana Trust's case [1975] 101 ITR 234, for holding that, the assessee is not entitled to exemption under section 10(22) of the Act is based on a complete misreading of the observations of the Supreme Court. In Loka Shikshana Trust's case [1975] 101 ITR 234, the Supreme Court, while dealing with the provisions of section 11 read with section 2( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 of knowledge. The observations of the Supreme Court do not confine the word "education" only to scholastic instructions but other forms of education also are included in the word "education". As noticed above, the word "schooling" also means instructing or educating. It, therefore, cannot be said that the word "education" has been given an unduly restricted meaning by the Supreme Court in the said decision. Though, in the context of the provision of section 10(22), the concept of education need not be given any wide or extended meaning, it surely would encompass systematic dissemination of knowledge and training in specialised subjects as is done by the assessee. The changing times and the ever widening horizons of knowledge may bring in changes in the methodology of teaching and a shift for the better in the institutional set-up. Advancement of knowledge brings within its fold suitable methods of its dissemination and though the primary method of sitting in a classroom may remain ideal for most of the initial ed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure, contemplates income of such institutions which is to be exempted under that provision. It is, therefore, difficult to accept the contention canvassed on behalf of the Revenue by the learned advocate, Mr. Shelat, that because the assessee was having income from its properties, it was not qualified to get exemption under section 10(22) of the Act. Learned counsel for the Revenue, relied upon the decision of the Rajasthan High Court in CIT v. Maharaja Sawai Mansinghji Museum Trust [1988] 169 ITR 379, in support of his contention that the assessee should not be treated as an educational institution. It will be seen from the said decision that the assessee was a public charitable trust having a museum in a portion of the City Palace, Jaipur, for the benefit of the public. Some properties were settled on the trust and it was treated and accepted as a trust for charitable purposes within the meaning of section 2(15) and had enjoyed the exemption from tax under section 11 of the said Act. The assessee later on contended that it was an educational institution within the meaning of section 10(22) of the Act. It is in this context that, drawing upon the observations of the Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
