TMI Blog2022 (10) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... y claiming benefit of exemption u/s 11 and 12 of the 1961 Act for all these years , on strength of registration u/s 12A , 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 case of Commissioner of Customs(Imports) , Mumbai v. Dilip Kumar Co. [ 2018 (7) TMI 1826 - SUPREME COURT ] 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 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) 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 CCIT , and then adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in absence of normal schooling and therefore the appellant cannot be treated to be educational institution for educational purpose as for actual imparting of the education in school and college to the student are mandatorily is wholly misconceived and uncalled for and therefore the same is liable to be quashed. 4. That in any view of the matter the order of the Chief Commissioner of Income Tax, Allahabad rejecting the exemption application under Section 10(23C)(vi) of the IT Act by relying on the decision in the case of SOLE TRUSTEE LOK SHIKHSAN SANSTHAN Vs. CIT reported in (1975) 101 ITR 234 (SC) is wholly misconceived and liable to be set aside as the said decision is prior to insertion of section 10(23C)(vi) of the Act by Finance (2) Act 1998 as such the same cannot be basis for rejecting of exemption application. 5. That in any view of the matter Lower authority failed to consider that the appellant Society is printing and publishing educational books, magazine, other literatures and also maintaining big Hindi library and museum/manuscripts having more than lacs books hence the order dated 03.08.2015 is misconceived, unjustified and illegal therefore the same is liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to consider the issue fairly in the light of cited decision which is injustice. 10. That in any view of the matter exemption had been granted to the appellant Society section 11 and 12 of the IT Act in earlier years and during the year also in question hence there was no change in the circumstances/ consistency and in its activity, hence there was no justification to warrant a different approach during the assessment years in question. 11. That in any view of the matter in the appellant s own case the jurisdictional High Court in the writ petition in various cases connected with labour matter under the Bonus Act held that the appellant society is an educational institution and not a commercial establishment hence the order dated 03/08/2015 is bad in law contrary to the said decision. 12. That in any view of the matter observations and findings of the chief Commissioner of Income Tax, Allahabad in his order dated 03/08/2015 for rejecting the appellant s genuine claim are quite misleading unjustified, wrong and contrary to the actual facts of the case therefore the same deserves to be sponged of and the claim of the appellant be allowed in interest of justice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. These six appeals filed by assessee for assessment year s 2000-01 to 2003-04 , 2006-07 and 2007-08, are all against common order dated 3rd August, 2015 passed by Learned Chief Commissioner of Income Tax, Allahabad, 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 ay s : 2000-01 to 2003-04 , 2006-07 and 2007-08. 4. The ld. Counsel for the assessee opened arguments before the tribunal and submitted that in all these six appeals filed by assessee for ay s: 2000-01 to 2003-04, 2006-07 and 2007-08, the only question which has arisen for adjudication before the Division Bench is as to whether the assessee is entitled for exemption under Section 10(23C)(vi) of the 1961 Act or not , keeping in view facts and circumstances of the case. The learned counsel for the assessee drew our attention to Paper Book-1 filed by the assessee / page no. 1-42 , wherein written submission of the assessee before tribunal are filed. The ld. Counsel for the assessee also drew our attention to Page no.48 to 50 of the Paper Book-1 filed by the assessee and it was submitted that the assessee is prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Das Tandon. The Society is engaged in various types of educational activities from the date of its inception such as popularising national language 'Hindi' in public at large. It is conducting various types of examination based on own syllabus and to award various degrees to qualified candidates, also maintains a big library which is running in a big compound. It also published the books and other literature. It has about thousand centres at various places in India and having about a lakh students on its role. The books of account were properly maintained and were audited. No defect was found by the A.O. in the books of accounts. However, for the assessment year under consideration, the A.O. has declined to extend the benefit of Section 11 of Income Tax Act, though the Society is registered under Section 12A of the Act. Finally the A.O. made various additions, which were d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .12.2005 granting application u/s 12A(a) of the 1961 Act effective from 01.04.2005, to be taken as effective from 26.05.1982(PB-1/page127-134). Our attention was also drawn to Page No.98 of the Paper Book-1 , wherein order of the tribunal in ITA No. 193-197/Alld/2013 for ay s: 2000-01, 2001-02, 2004-05, 2005-06 and 2006-07 , vide common order dated 30.09.2016 is placed , wherein tribunal has accepted the claim of the assessee for grant of exemption under Section 11 of the Act for the aforesaid assessment years. Our attention was also drawn by ld. Counsel for the assessee to page No.214 to Page No. 367 of Paper Book-1 filed by the assessee , and it was submitted that there are several centers of the assessee at various place in India and abroad ,wherein teaching is carried out. It was submitted that Ld. CCIT vide order dated 3rd August, 2015 has denied the assessee s claim of exemption under Section 10(23C)(vi) by rejecting its application for grant of exemption u/s 10(23C)(vi) by relying upon decision of Hon'ble Supreme Court in the case of Sole Trustee Lok Shikshan Trust v. CIT (1975) 101 ITR 234(SC) and decision of Hon ble Gujarat High Court in the case of CIT v. Sorabji Nuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Creative Music Designers v. ITO(E) , reported in (2022)443 ITR 173(Calcutta HC) n) Judgment and Order passed by Hon ble Supreme Court in the case of American Hotel Lodging Association , Educational Institute v. CBDT , reported in (2008) 301 ITR 86(SC) o) Order passed by ITAT, Delhi in the case of Haryana State Remote Sensing Application Centre v. CIT(E ) , reported in (2022) 193 ITD 706(Del-trib.) p) Judgment and Order passed by Hon ble Delhi High Court in the case of Director of Income-tax Exemptions v. Escorts Cardiac Diseases Hospital Society , reported in (2008) 300 ITR 75(Del HC) q) Judgment and Order passed by Hon ble Supreme Court in the case of Aditanar Educational Institution v. Additional CIT, reported in (1997) 224 ITR 310(SC) r) Judgment and Order passed by Hon ble Bombay High Court in the case of Tolani Education Society v. Deputy Director of Income-tax(Exemptions) , reported in (2013)351 ITR 184(Bom) s) Judgment and Order passed by Hon ble Delhi High Court in the case of CIT v. Lagan Kala Upvan , reported in (2003) 259 ITR 489(Del HC) t) Judgment and Order passed by Hon ble Delhi High Court in the case of CIT v. Delhi Kannada Education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 2000-01 and 2005-06. (paper book-1/ page 90-92 and 87-89). Our attention was drawn by learned CIT DR to page No. 193-194 of the Paper Book-1 filed by the assessee , wherein Press Note dated 05.05.1988 issued by Education Department, Ministry of Human Resources Development, New Delhi is placed , 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 recognized by any Board /University. By referring to para 5 of the aforesaid Judgment and order of Hon ble Supreme Court in the case of Lata Arun(supra), the ld. CIT-DR submitted that the educational qualification by way of Madhyama Certificate issued by the assessee, was previously recognized as equivalent to a Degree in Hindi, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equent decision in the case of DIT(E) v. Ahmadabad Management Association reported in (2014) 366 ITR 85(Guj) distinguished the decision of Saurashtra Education Foundation(supra) . It was submitted that the assessee is imparting education in Hindi. Our attention was drawn to page No. 177 of the paper book , and in particular to various clauses of Sections 6 of The Hindi Sahitya Sammelan Act, 1962 to submit that the assessee is engaged in imparting education. Our attention was also drawn to page no. 61 of the paper book-V filed by the assessee, wherein Uttama Certificate awarded by the assessee is recognized by Punjabi University, Patiala. Our attention was also drawn to page 1 of PB-V , wherein registration granted by ld. CIT under Section 12AA w.e.f. 01.04.2005 is placed. The Ld. counsel for the assessee relied upon decision of Hon ble Allahabad High Court in the case of J K Bankers v. CIT, reported in (1974) 94 ITR 107(All. HC) , and explained the powers of tribunal , which cannot go beyond the subject matter of appeal. The ld. Counsel for the assessee also relied upon the decision of Hon ble Allahabad High Court in the case of S P Kochhar v. ITO, reported in (1984) 145 ITR 255(Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is continuing but w.e.f. 01.06.2006, the second amendment came into force where fresh application for exemption was required. Only after receiving the notice under Section-148, the society had approached the authorities for the exemption alongwith application for condonation of delay. By the impugned order, the authority concerned has rejected the application for condonation of delay. He further submits that there was no mistake on the part of the society-assessee. On the other hand, Sri Sambhoo Chopra, learned counsel for the department has submitted that there was no genuine hardship as rightly observed in the impugned order, so the application for condonation of delay was rightly rejected. We have heard both the parties at length and gone through the materials available on record. It may be mentioned that the Income Tax Act is most complicated piece of legislation. The assessee-society is exclusively engaged for the promotion of Hindi language, so amendment was not known to assessee. In the instant case, the assessee-society was already enjoying the benefit under Section-10(22) of the Income Tax Act and was under bona-fide belief that exemption is continuing. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng degree named Prathama, Madhyama and Uttama (Sahitya Ratna) and Visharad which are equivalent to High School, Intermediate and B.A. (Honours in Hindi). The total centers in the country for preparing the students to appear in the examinations and other educational activities of the society are about 1,000. Approximate strength of the students appearing in the above examinations is 70,000 to 1,00,000 every year. The degrees conferred by the Hindi Sahitya Sammelan has been recognized by various Universities of the country and various Educational Boards, of the State Government and Indian Medical Council of various Governments. That the Hindi Sahitya Sammelan has a Hindi Library and Museum which has its own international importance and is the biggest Hindi Library in the World. The Hindi Library owns about one lacs books and twenty five rare manuscript of Hindi, Sanskrit, History and other alike and connected matters to the Hindi Literature and some of them are more that thousand years old and the same are valuable property of the nation. The Government of India is actively contemplating to provide grant to this Hindi Library for making it Air-conditioned so that its rare manusc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittee, Prachar Samiti, through these Agencies of these various committees the Society carried on the work of promotion and propagation of Hindi, of spreading the use of Devnagri script, holding examination and of conferring degrees for proficiency in Hindi. The objects of the Society brief are as under:- 5. After careful consideration of the activities of the assessee-society and the submissions made during the proceedings, I find that in the activities of the assessee-society there is no element of normal schooling and also there are no teachers and taught present. The assessee has not setup any school or college for imparting education. It merely conducts exams based on its own syllabus/course and awards degrees named as Prathama, Madhyarna Uttama and Visharad. 6. In the above context, it is pertinent to note that the Hon'ble Supreme Court in the case of Sole Trustee Lok Shikshan Trust Vs. CIT (1975) 101 ITR 234 has ruled the following with regard to the Education for the purpose of clause (15) of section 2 of the IT Act; The sense in which the word education has been used in section 2(15) is the systematic instruction, schooling or training give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be considered as a process, training and development of knowledge, mind and character of students in normal schooling. The aims, objects and the activities of the assessee society could not be held as education as it was not a process of training and development of the students in normal schooling. 9. In view of the above findings and reasons given in the foregoing paragraphs, it is hereby held that the applicant does not qualify to be accorded recognition as a charitable institution for granting exemption U/s 10 (23C) (vi) of the I.T. Act for the assessment years 2000-01, 2001-02, 2002-03, 2003-04, 2006-07 and 2007-08, Thus, the application for the above mentioned years stand rejected. Thus, the Ld. CCIT held that there is no element of normal schooling in the activities of the assessee. The ld. CCIT also observed that there are no teachers and taught. The assessee has not set up any school or college for imparting education. It merely conducts exams based on its own syllabus/courses and awards degrees named as Prathama, Madhayama, Uttama and Visharad. The ld. CCIT relied upon decision of Hon'ble Supreme Court in the case of Sole Trustee Lok Shikshan Trust v. CIT ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 Senior Counsel assisted by Shri Suyash Agarwal learned counsel for the petitioner and Shri Shubham Agarwal learned counsel for respondent no. 1. Shri Shubham Agarwal has raised the preliminary objection that the order impugned in this petition is appealable and therefore the petition is not maintainable or ought not to be entertained unless the petitioner exhausts the remedy of appeal. The order impugned in this appeal is an order passed under Section 10(23C) (vi) of the Income Tax Act 1961, dated 03.08.2015 passed by the Chief Commissioner of Income Tax, Allahabad. Section 253 (1)(f) which was inserted with effect from 01.06.2015 vide Finance Act 2015 provides for an appeal against the order passed by the Prescribed Authority under Section 10(23C) (vi) of the Act. In view of the above provisions, there is a clear statutory remedy of appeal available to the petitioner which has not been availed. Shri R.R. Agarwal learned Senior Counsel has submitted that this petition was filed on 17.11.2015 but no suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 forum to challenge the impugned order dated 03.08.2015 passed by ld. CCIT was by filing an appeal with tribunal . These six appeal(s) were to be filed with tribunal within 60 days of service of the impugned order dated 03.08.2015 passed by ld. CCIT for all the six assessment years viz. ay s : 2000-01 to 2003-04, 2006-07 and 2007-08. The common order dated 03.08.2015 passed by ld. CCIT was served on the assessee on 07.08.2015, as is stated to be in Form No. 36 filed with tribunal. The appeal(s) with tribunal ought to have been filed by assessee latest by 06th October, 2015. The assessee filed Writ Petition with Hon ble High Court on 17.11.2015, which was filed within 102 days of service of impugned order. Although the assessee filed writ petition, the time otherwise available to file appeal u/s 260A with High Court against the order of tribunal is 120 days. Thus, it could not be said that there was delay and latches on part of the assessee, although assessee was pursuing legal remedy at wrong for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 Das Tandon. The Society is engaged in various types of educational activities from the date of its inception such as popularising national language 'Hindi' in public at large. It is conducting various types of examination based on own syllabus and to award various degrees to qualified candidates, also maintains a big library which is running in a big compound. It also published the books and other literature. It has about thousand centres at various places in India and having about a lakh students on its role. The books of account were properly maintained and were audited. No defect was found by the A.O. in the books of accounts. However, for the assessment year under consideration, the A.O. has declined to extend the benefit of Section 11 of Income Tax Act, though the Society is registered under Section 12A of the Act. Finally the A.O. made various additions, which were deleted by the CIT (A) as well as by the Tribunal.Being not satisfied, the Department has filed the present a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffective 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 of Hon ble Allahabad High Court for ay: 2000-01, dismissed the appeal of the Revenue being infructuous. Act .Thus, the assessee is getting the benefit of exemption u/s 11 and 12 of the 1961 Act, being registered u/s 12A. The assessee is now seeking approval u/s 10(23C)(vi) of the 1961 Act for all the impugned assessment years, to claim necessary exemptions, by claiming that the assessee is an educational institution existing solely for education and not for purposes of profits. Section 10(23C)(vi) provides exemption from income on fulfillment of stipulated condition as are provided u/s 10(23C)(vi) read with applicable proviso s. The issue before us for adjudication is limited as to whether the assessee is an educational institution existing solely for education and not for purposes of profits. Section 10(23C)(vi) provides exemption from income to University or other educational institutions existing solely for education and not for the purposes of profits. It is admitted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 expression educational institution when used in conjunction with University , cannot be given a very broader definition, and the above definition gives a very vivid description of educational institution . Further, these educational institutions should exist solely for education purposes and not for the purposes of profits, in order to avail approval u/s 10(23C)(vi) . The word education has been defined in different dictionaries as follows: the act or process of imparting or acquiring knowledge , developing the powers of reasoning and judgment , and generally of preparing oneself or others intellectually for mature life( dictionaryreference.com) the act or process of imparting knowledge or skills to another( Merriam Webster Dictionary) the act or process of imparting or acquiring particular knowledge or skills , as for a profession(dictionary reference.com) the act or process of acquiring knowledge,esp. systematically during childhood and adolescence(Col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 recognized by any Board /University. By referring to para 5 of the aforesaid Judgment and order of Hon ble Supreme Court in the case of Lata Arun(supra), the ld. CIT-DR submitted that the educational qualification by way of Madhyama Certificate issued by the assessee, was previously recognized as equivalent to a Degree in Hindi, but the said recognition ceased to be operative w.e.f. 1.4.1985. The ld. CIT DR further referred to a letter dated 4.12.1991 addressed by Deputy Secretary, Association of Indian Universities, New Delhi written to the Registrar, Rajasthan Nursing Council, Jaipur, in which it was stated Hindi Sahitya Samellan , Prayag, Allahabad is one of the voluntary Hindi Institution set up for promotion of Hindi. Its exams are not equated with the regular examinations of Secondary Boards/Universities. Our attention was drawn to para 14 , wherein Hon ble Supreme Court observed that the Madhayama Certificate from Hindi Sahitya Sammelan Prayag, Allahabad w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
