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TMI Blog2022 (10) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... in memo of appeal(s) filed with Income-tax Appellate Tribunal, Allahabad Bench , Allahabad(hereinafter called " the tribunal") , reads as under:- "1. That in any view of the matter order passed under Section 10(23C)(vi) of the IT Act dated 03.08.2015 by the Chief Commissioner of Income Tax, rejecting the claim of the exemption is highly unjustified/illegal when the Society is actively engaged in education activity from the date of its Inception of 1910 and the entire activity is within the frame work of the bye laws of the Society hence the approach of the lower authorities is not a judicious approach. 2. That in any view of the matter the order passed under Section 10(23C)(vi) of the IT Act dated 03.08.2015 by rejecting the application of the appellant by saying that the Society was conducting examination as prathma, madhyama, uttama and Visharad without holding teaching classes or lecture, hence it does not fall in the category of educational institution and injustice and liable to be set aside in the facts and circumstances of the case. 3. That in any view of the matter the Chief Commissioner of Income Tax recorded a finding that the appellant merely conducting examinatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore the impugned order is illegal and liable to be set aside and the exemption application deserves to be allowed in interest of justice. 8. That in view of the matter the finding of the Chief Commissioner of Income Tax, that the aim, objects and the activities of the appellant Society could not be held as education as it was not in a process of training and development of students in normal school is wholly misconceived and therefore liable to be set aside as the term 'educational purpose' is not restricted merely to holding classes or normal schooling, as the holding of the classes is not mandatory for the institution to qualify and to be treated as educational institution especially when the appellant Society publishes education book, maintaining library and undertakes examination on the basis of its own syllabus. 9. That in any view of the matter with regard to the exemption under Section 10(23C)(vi) of the IT Act, as inserted by Finance (2) Act 1998 with effect from 01.04.1999 it is a settled principle that the exemption provisions are to be examined in liberal manner with judicious approach and this view is duly supported by the decision of the apex court also reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the assessee have been granted registration u/s 12A, the object of the society are of the general public utility as defined u/s 2(15) of the Act, and held that there is no instance of misuse of fund by the trustees hence in the light of such observation of the court claim of the appellant u/s 10(23C)(vi) deserve to be allowed. 3. That in any view of the matter from the year of inception of the society, the claim u/s 10(22) was allowed by holding the society as educational institution hence in the light of Principles of consistency rejection of claim u/s 10(23C)(vi) is unwarranted and not liable to be sustained. 4. That in any view of the matter "educational purpose" was not restricted to holding of teaching classes but educational purpose was equally served with educational text book and the courts have repeatedly held that holding of classes are not necessary hence the decision referred in the impugned order is not applicable. 5. That in any view of the matter the Hon'ble Allahabad High Court in the petitioner matter about the dispute of Labour Law with employees observe that the law is not applicable to the society because the society is the educational insti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as directed that registration granted in favour of the assessee under Section 12A(a) of the Act to be effective from 26th May, 1982. It was submitted that earlier the assessee was getting exemption under Section 10(22) of the 1961 Act. Our attention was also drawn by ld. Counsel for the assessee to Page No. 149 of the Paper Book-1 and it was submitted that vide order dated 4th January, 2005 passed by Hon'ble Allahabad High Court, it is recognized that the assessee is an educational institution although said order was passed in a matter concerning labour laws. Our attention was further drawn by ld. Counsel for the assessee to page 159 of the Paper Book-1 wherein the order dated 05th December, 1995 of Hon'ble Allahabad High Court is placed , and in which the assessee was held to be educational institution in a matter concerning payment of Bonus to employees.Our attention was also drawn by ld. Counsel for the assessee to Page No.87 of the Paper Book-1, wherein order dated 25.07.2014 passed by Hon'ble Allahabad High Court in ITA No. 341 of 2010 for ay: 2000-01 is placed , in which the Hon'ble Allahabad High Court upheld that the assessee is entitled for exemption under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pass a contrary order without following the provisions of Section 12AA(3), but the same was not done in the instant case. When it is so, then by keeping mind the ratio laid down in the case of CIT Vs. Gujarat Maritime Board, 295 ITR 561 SC, as well as C.M.S. Vs. Union of India, 315 ITR 48 Allahabad, we find no reason to interfere with the impugned orders passed by both the Appellate Authorities, the same are hereby sustained alongwith the reasons mentioned therein. No substantial question of law is emerging from the impugned orders. The appeal filed by the department against the judgment and order dated 23.02.2010 passed by the Income Tax Appellate Tribunal, Allahabad in I.T.A.T. No. 49/A/2009 & 09/A/2009 for the Assessment Year 2000- 01 is dismissed at the admission stage." It was submitted by ld. Counsel for the asessee that the above order passed by Hon'ble Allahabad High Court has attained finality. The learned senior counsel for the assessee submitted that registration under Section 12A was granted to the assessee by tribunal with effect from 26th May, 1982.Our attention was drawn to tribunal order dated 09.03.2006 wherein tribunal in ITA No.26(Alld.)/2006 modified the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Hon'ble Gujarat High Court in the case of Director of Income-tax(Exemption) v. Ahmedabad Management Association , reported in (2014) 366 ITR 85(Guj. HC) g) Judgment and Order passed by Hon'ble Delhi High Court in the case of Delhi Bureau of Text Books v. Director of Income-tax (Exemption) , reported in (2017) 394 ITR 387(Del HC) h) Judgment and Order passed by Hon'ble Allahabad High Court in the case of Simpkins School v. Director General Of Income Tax (Investigation) & Ors. , reported in (2014) 367 ITR 335(Alld. HC) i) Judgment and Order passed by Hon'ble Bombay High Court in the case of Director of Income-tax v. National Safety Council, reported in (2008)305 ITR 257(Bom HC) j) Judgment and Order passed by Hon'ble Rajasthan High Court in the case of Agarwal Shiksha Samiti Trust v. CIT , reported in (1988) 168 ITR 751(Raj. HC) k) Judgment and Order passed by Hon'ble Rajasthan High Court in the case of CCIT v. Geetanjali University Trust, reported in (2013) 352 ITR 433(Raj. HC) l) Judgment and Order passed by Hon'ble Delhi High Court in the case of Delhi Music Society v. DGIT , reported in (2013) 357 ITR 265(Del HC) m) Judgment and Order passed by Hon'ble Calcutta Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the assessee drew our attention to the page 57-60 of Paper Book-IV filed by the assessee, which contains specimen degrees awarded by the assessee. The assessee has also filed copy of registration certificate dated 20th December, 2005 granting registration U/S 12AA w.e.f. 01.04.2005(Paper Book -V/Page 1) , as also the assessee has filed certificates regarding recognition of educational institution by various authorities and various Universities , which are placed at page 4-61 in paper book-V filed on 20th July, 2022 by assessee. 4b. The Learned CIT-DR, on the other hand submitted that application filed by the assessee for grant of exemption under section 10(23C)(vi) was rejected by Ld. CCIT, vide common order dated 03.08.2015 for ay's: 2000-01 to 2003-04, 2006-07 and 2007- 08. It was submitted by ld. CIT-DR that the assessee was granted exemption under Section 11 and 12 of the 1961 Act for ay: 2000-01 . It was submitted by ld. CIT-DR that for ay: 2005-06 , the assessee was granted exemption u/s 11 and 12 of the 1961 Act. Our attention was drawn to judgment and orders passed by Hon'ble Allahabad High Court in ITA No. 340 and 341 of 2010, both dated 25.07.2014, for ay: 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon decision of Hon'ble Gujarat High Court in the case of Saurashtra Education Foundation v. CIT , reported in (2005) 273 ITR 139(Guj. HC),and submitted that Educational institution which is recognised by any competent authority and imparts formal education systematically and has control over its trainees, is eligible for exemption under section 10(22) of IT Act . There has to be registration with authority and answerability to the authority. The ld. CIT DR submitted that Section 10(23C) contemplates exemption to institutions existing exclusively and solely for educational purposes. The ld. CIT DR relied upon judgment and order passed by Hon'ble Delhi High Court in the case of Council for the Indian School Certificate Examinations v. DGIT reported in (2014)362 ITR 436(Del HC), it was submitted that the appellant cannot be treated as the educational institution existing solely for educational purposes and it cannot be compared with the ISCE. The Ld. CIT DR prayed that the order of ld. CCIT be confirmed. 4c.In rejoinder, the Ld. counsel for the assessee drew our attention to Page No. 17 of the paper book of case law and submitted that Hon'ble Gujarat High Court in a subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble High Court was pleased to set aside the impugned order's passed by ld. CCIT and condone the delay with a direction to the competent authority to pass afresh order on merit for the above mentioned assessment years 2000- 01 to 2003-04, 2006-07 and 2007-08 at the earliest, preferably within a period of 4 months after receiving certified copy of the order passed in Writ Tax No. 443 of 2011, dated 28th January, 2015 , by holding as under: "By this writ petition, the petitioner has assailed the order dated 9/10 August, 2010 passed by the department of the revenue where the application for relaxation of time in filing the petition under Section- 10(23C) (vi) was rejected for the assessment years 2000-01, 2001-02, 2002-03, 2003-04, 2006-07 & 2007-08. Sri Shakeel Ahmad, learned counsel for the petitioner submits that the petitioner-society was registered under Section-12-A and also exempted under Section-10(22) of the Act till assessment year 1999-2000. For the assessment year under consideration, the assessments were completed and there was no occasion to the petitioner to file any fresh application for exemption. The society was under bona-fide belief that exemption is continuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucation to the students in form of Prathama, Madhyama, Uttama. The subjects of the said courses in brief are as under:- Prathama (Equivalent to High School): 1. Hindi Sahitya 2. History 3. Geography 4. Science 5. Mathematics 6. Home Science for Ladies only. Madhyama (Equivalent to Intermediate): 1. Hindi Sahitya 2. Mathematics 3. Social Studies 4. Psychology 5. Sanskrit 6. Agriculture 7. Commerce. Uttama (Equivalent to B.A. (Honours Hindi): 1. Hindi Sahitya 2. Sanskrit Sahitya 3. History' 4. Political Science 5. Economics 6. Sociology That it is necessary to mention here that there are various centers all over the country through which the Society is providing education of above courses. In this connection main centres situated outside Allahabad and is at Gwalior (Madhya Pradesh) known as "Rajkiya Hindi Vidyapeeth:, Gorakhi Lashkar in which education to the students are provided according to the syllabus of the Society. That the Society is also conducting various examinations based on its own syllabus/courses for awarding degree named Prathama, Madhyama and Uttama (Sahitya Ratna) and Visharad which are equivalent to High School, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution is in big campus of the land, which consists of office, Sangrahalaya, Printing Press, provision for stay of guests/students (Guest House) and big seminar hall, which is used for various seminars and other educational activities including playground etc. In this way the institution is providing the above activities in the own premises for encouraging the moral of student for higher education. That for proper guidance and to keep the control of activities, the Society is bound by the objects mentioned in its memorandum/bye-laws. The above rules and bye-laws of the Societies lay down the object of this Association and the manner of its working. Under the Rules and bye-laws of the Society as mentioned above other bodies could be constituted for carrying on the activities of the Society as mentioned above other bodies could be constituted for carrying on the activities of the Society. These activities were manifold and multifarious including a Governing Body, the working committee a Hind University Council, Literary Council (Sahitya Samiti) Library committee, Prachar Samiti, through these Agencies of these various committees the Society carried on the work of promotion and pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process of training and developing the knowledge, skill, mind and character of students by normal schooling. 7. Further, in the case of CIT VS. Sorabji Nusserwanji Parekh (1993) 201 ITR 939, Hon'ble Gujrat High Court have held that there has to be an activity of normal schooling or actual imparting of education by the institution to claim exemption. 8. In the case of assessee no educational activity in the sense of normal schooling or actual imparting of knowledge or learning to the students is carried out. The assessee society was simply conducting examination as Prathama, Madhayama, Uttama and Visharad without keeping any control over such students or without actually imparting any knowledge to the said students. Therefore, it cannot be said that the assessee society was carrying on educational activities or that it was an educational institution established for educational purposes. Education for the purposes of section 2(15), has a very specific meaning and is not used in a wide and extended sense. Education should normally be considered as a process, training and development of knowledge, mind and character of students in normal schooling. The aims, objects and the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption U/s 10 (23C) (vi) of the 1961 Act for the assessment years 2000-01 to 2003- 04, 2006-07 and 2007-08, and thus, the application filed by the assessee for all these years for grant of exemption u/s 10(23C)(vi) of the 1961 Act stood rejected by ld. CCIT, vide common order dated 03.08.2015 passed by ld. CCIT. The assessee being aggrieved by common order dated 03.08.2015 passed by ld. CCIT for ay's: 2000-01 to 2003-04 , 2006-07 and 2007-08 rejecting application filed by assessee for according recognition as a charitable institution for grant of exemption u/s 10(23C)(vi) , filed writ petition with Hon'ble Allahabad High Court which was listed as Writ Tax No. 891 of 2015. The aforesaid Writ Tax Appeal stood dismissed by Hon'ble Allahabad High Court vide order dated 2nd August, 2017 , wherein Hon'ble High Court observed that alternate remedy against the impugned order dated 3rd August, 2015 passed by Ld. CCIT, Allahabad under Section 10(23C)(vi) lies with Income Tax Appellate Tribunal(ITAT) under the provisions of Section 253 (1)(f) the 1961 Act which was inserted with effect from 01/06/2015 by Finance Act, 2015, by holding as under: "Heard Shri R. R. Agarwal learned S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 1961 Act available to the assessee against the impugned order dated 03.08.2015 passed by ld. CCIT, also observed that it is expected of the tribunal to consider sympathetically condonation of delay application filed by assessee on account of the fact that Writ Petition was incorrectly filed by assessee and was pending with Hon'ble High Court. The Writ Petition was dismissed by Hon'ble Jurisdictional High Court on 02.08.2017. The assessee filed all the six appeal(s) with tribunal on 18th August, 2017 against impugned common order dated 3rd August, 2015 passed by ld. CCIT for ay's : 2000-01 to 2003-04 , 2006-07 and 2007-08 rejecting application filed by assessee for according recognition as a charitable institution for grant of exemption u/s 10(23C)(vi) of the 1961 Act. The assessee has duly filed condonation application(s) dated 17.08.2017 along with affidavit dated 16.08.2017 executed by Shri Vibhuti Narain Mishra , Head of the Society, requesting for condoning delay in filing these six appeal(s) with tribunal wherein it is mainly averred that the assessee under bonafide belief was perusing remedy by filing Writ Petition with Hon'ble Allahabad High Court, while the correct legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted and we shall now proceed to adjudicate these six appeals on merit in accordance with law, after hearing contentions of both the parties. The only question which has arisen before us for adjudication is as to whether the assessee is eligible for getting exemption u/s 10(23C)(vi) of the 1961 Act. The assessee is already registered u/s 12A of the 1961 Act, and we have been informed that the assessee is getting necessary exemptions u/s 11 and 12 of the 1961 Act, over the years. The Hon'ble Allahabad High Court in Income Tax Appeal No. 341 of 2010 for ay: 2000-01 , vide judgment and order dated 25.07.2014 , after considering its objects and activities, observed that the assessee's objects are of general public utilities as defined u/s 2(15) of the 1961 Act and the assessee being registered u/s 12A will be entitled for exemption u/s 11 and 12 of the 1961 Act, by holding as under: "The brief facts of the case are that the assessee-respondent is a society created on 1.5.1910 and registered under the Societies Registration Act, 1860, which was established by the founders of the Society namely, Pandit Madan Mohan Malviya Mahatma Gandhi, Dr. Rajendra Prasad and Rajarshi Purshottam Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d orders passed by both the Appellate Authorities, the same are hereby sustained alongwith the reasons mentioned therein. No substantial question of law is emerging from the impugned orders. The appeal filed by the department against the judgment and order dated 23.02.2010 passed by the Income Tax Appellate Tribunal, Allahabad in I.T.A.T. No. 49/A/2009 & 09/A/2009 for the Assessment Year 2000- 01 is dismissed at the admission stage." The Hon'ble Allahabad High Court in Income Tax Appeal No. 340 of 2010 , vide Judgment and Order dated 25.07.2014, has held that the assessee being registered u/s 12A will be eligible for getting exemption u/s 11 of the 1961 The assesse has also enclosed assessment orders for ay: 2012-13 and 2016-17 , wherein income of the assessee after granting exemption u/s 11 and 12, was assessed at Rs. Nil(Page 135- 139/PB-1). The tribunal vide orders dated 09th March 2006 in ITA No.26/Alld/2006, has directed department to grant registration u/s 12A(a) effective from 26.05.1982(page 127-134/PB-1). The tribunal vide common orders dated 30.09.2016 in ITA No. 193 to 197/Alld/2014 for ay: 2000-01, 2001-02, 2004-05 , 2005-06 and 2006-07, has by following the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erring degrees. See Com. v. Banks, 198 Pa. 397. 48 Atl. 277'. Thus in short, University is an institution of higher learning of study, which confers Degrees. The 'other educational institution' will definitely take its color from the word 'University' . There is no definition of 'educational institution' provided in the 1961 Act, and Hon'ble Courts have interpreted the same through judicial orders . We have observed that there is a definition of 'Educational Institution' provided under the erstwhile Service Tax Law which was implemented by Finance Act, 1994(Section 66D(l)) and now GST(clause 2(y) of the Notification No. 12/2017-Central- Tax (Rate) dated : 28.06.2017) which is implemented through a separate statute (both Service tax and GST are taxing statute) , which provides that : "educational institution" means an institution providing services by way of,- (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course;" We are of the considered view that the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it is promoting Hindi Language . The assessee has also claimed that it is providing education to students by conducting various courses named Prathama, Madhyama and Uttama and claim is made that these courses are duly recognized by various Universities and Boards. It is also claimed by assessee that it is running various centers for providing education in Hindi. While ld. CIT-DR has seriously disputed the same and contended that these courses are not recognized by any University/Board. The ld. CIT DR referred to Press Note dated 05.05.1988 issued by Education Department, Ministry of Human Resources Development, New Delhi, wherein the Ministry clarified that the examination conducted by the assessee are not recognized by Central Government as equivalent to High School, Intermediate or BA. It is clarified in the aforesaid Press Note that the assessee was only granted recognition to conduct examination in Hindi Subject . The ld. CIT-DR relied upon the decision of Hon'ble Supreme Court reported in AIR 2002 Supreme Court 2642, State of Rajasthan v. Lata Arun, dated 17th July, 2002. The Ld. CIT DR submitted that the assessee is a voluntary association for promotion of Hindi and is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A , and accordingly returns were filed by assessee with Revenue for all those years. It is also claimed by assessee that exemption provisions are to be liberally construed , however we draw attention to Constitution Bench Judgment and Order of Hon'ble Apex Court in the case of Commissioner of Customs(Imports) , Mumbai v. Dilip Kumar & Co. (2018) 95 taxmann.com 327(SC) , wherein Hon'ble Supreme Court held that exemption provisions are to be strictly construed. We clarify that we have refrained ourselves from commenting on merits of the issue's in this appeal , so that ld. CCIT can decide the issue unhindered by any of our observations. We are setting aside the common order dated 03rd August, 2015 passed by ld. CCIT u/s 10(23C)(vi) holding that the assessee does not qualify to be accorded recognition as a charitable institution for granting exemption u/s 10(23C) (vi) of the 1961 Act for assessment year's (ay's): 2000-01 to 2003-04 , 2006-07 and 2007-08, for denovo determination of the issue after granting proper and adequate opportunity to the assessee. All the evidences/submissions filed by the assessee in its defense shall be admitted by ld. CCIT , and then adjudicated on merits in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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