TMI Blog2023 (8) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... is also not correct. The Hon. Supreme Court in the case of Dharamposhanam [ 1978 (7) TMI 2 - SUPREME COURT] has held that whether a Trust is for charitable purpose or not is to be determined by reference to all the objects for which the trust has been brought into existence and for considering the claim of exemption, the activities under the provisions of its memorandum of association are relevant and not the activity actually conducted by the assessee. Assessee Trust having multiple objects cannot be said to be existing solely for the purpose of education . It is open to the trust to pursue all or any of the objects of the trust under the garb of education. Therefore in our considered view, the condition of section 10(23C)(vi) i.e the applicant existing solely for educational purposes is not fulfilled in the present case. The case laws relied by the assessee are all from Lower Forums and clearly distinguishable, however we hereby dealt with the judgments of the Hon ble Apex Court only to arrive our conclusion. Thus we have no hesitation in confirming the denial of exemption u/s. 10(23C)(vi) of the Act to the assessee. Decided against assessee. - ITA No. 839/Ahd/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be rejected, as the trust does not comply the statutory requirements of existing solely for educational purpose . 4.1. In reply, the assessee filed written submission stating that the Trust exists solely for education purpose , Medical and other social objects are ancillary and supportive objects to achieve the main educational objects. It is further mentioned that the assessee Trust is a sponsoring body of Parul University which is registered under Gujarat Private University Act, 2009 and is a Deemed University status by UGC on a condition that the institute would be having broad objectives having a greater interface with society through extra mural, extension and field action related objects. It is further submitted the Trust has been approved permission for Medical education to start Medical College provided Trust should have medical objects in its Constitution. Without medical object, Trust would not have got the medical college permission; hence incorporation of medical objects is also a part of education objects. Further running hospitals is a pre-requisite for starting any medical institution in the fields of Medicine, Ayurved, Homeopathy, Nursing or Physi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Parul Institute of Engg. And Technology(MCA 2nd Shift) 2014-15 7,38,095 51,81,000 14.25 Parul Institute of Engg. And Technology(MCA Integrate) 2014-15 71,511 19,47,850 3.68 Parul Institute of Engg. And Technology(Diploma 2nd Shift) 2014-15 66,28,484 5,79,29,350 11.44 -do- 2015-16 98,32,945 4,70,70,130 20.89 -do 2017-18 15,14,382 1,57,53,745 9.61 Parul Polytechnic Institute 2017-18 42,61,944 5,90,20,714 7.22 Parul Polytechnic lnstitute(2nd Shift) 2014-15 7,28,246 2,93,36,800 2.48 -do- 2017-18 25,95,420 1,16,06,889 22.36 -do- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated to be for the purpose of Education. Therefore, the basic condition of the trust existing solely for the purpose of education does not get fulfilled. Few examples of such violations are as under: i. Parul Trust Limda. 1. Clause No. iv relates to medical. 2. Clause v relates to social activities. ii. Shree Hariom Arogya Seva Trust. Vadodara. 1. Clause No. c for medical treatment 2. Clause No. d for public health 3. Clause No. h in respect of upbringing and training for self-reliance to orphan and deserted women and children. iii. Parul Arogya Seva Mandal Trust, Vadodara. 1. Clause No, a, b, c with respect to medical treatment. 2. Clause No. d with respect to public health 3. Clause No. h with respect to upbringing and training for self-reliance to orphan and deserted women and children. 9.3 Considering the above facts of the case, the applicant having multiple objects cannot be said to be existing solely for the purpose of education. It is open to the trustee to pursue all or other objects of the trust under the garb of education. Therefore, the condition of section 10(23C) (vi) ie the applicant existing solely for ed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby add to your knowledge. Again, when you grow up and have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the ways of the world if you are not careful, your wallet is liable to be stolen or you are liable to be cheated by some unscrupulous person. The thief who removes your wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer. If you visit a night club, you get acquainted with and add to your knowledge about some of the not much revealed realities and mysteries of life. All this in a way is education in the great school of life But that is not the sense in which the word 'education' is used in clause (15) of section 2 What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by normal schooling From the aforesaid judgment of the Hon'ble Supreme Court, the word education used in clause (15) of section 2 of the Act of 1961 means the process of training and developing the knowledge, skill, mind and character of the students by normal schooling. In our opinion, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the activities of the applicant came within the definition of income of educational institution . Under section 10(22) one had to closely analyse the activities of the institute, the objects of the institute and its source of income and its utilisation. Even if one of the objects enabled the institute to undertake commercial activity, the institute would not be entitled to approval under section 10(22) The said section inter alia excludes the income of the educational institute from the total income From the aforesaid judgment of the Hon'ble Supreme Court, it is settled law that the sole object of the applicant seeking approval u/s 10(23C)(vi) of the IT Act has to be a educational object. 11. Further, as per the provisions of section 10(23C)(vi) of the Act of 1961, it is obligatory on the part of the authority to examine the record and object of the society objectively and therefore taking into consideration the submission made by the applicant in detail, it is held that the objects particularly 3(c)(viii) of the Applicant Trust are contrary to the object of the educational purpose and therefore, it is concluded that the applicant does not exist solely for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n favour of Shri Samir Parikh, Chartered Accountant, he appeared before this Tribunal on 30-05-2022, wherein he was directed to file revised concise grounds. Thereafter neither the Representative nor the assessee appeared for the above appeal, when the case is re-posted for hearing for 9th times from 07-07-2022 to 13-07-2023. Thus it is presumed that the assessee Trust is not interested in conducting the above appeal, therefore we proceed to decide the appeal with available materials on record and with the assistance of Ld. CITDR. 6.1. The assessee filed a submission on record which reads as under: .7 Hence it is clear that appellant trust is existing solely for educational purpose and is eligible to get exemption under section 10(23C)(vi) of the Income Tax Act, 1961. 8. Without prejudice to above, it is submitted that having multiple objectives along with educational object cannot be said that the institution/trust does not exist solely for educational purpose. In the decision of Hon. High Court of Delhi in case of Jaypee Institute of Information Technology Society Vs. Director General of Income-tax (Exemptions) [2009] 185 Taxman 110 (Delhi), Hon. High court has laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon. Commissioner of Income tax so far as trust has spent more than 85% of its aggregate income including capital expenditure incurred by the trust. 11. Hon. CIT (Exemption) is not correct in holding that applicant trust has earned a huge profit from its educational activities. While giving surplus and total income as per audited income expenditure account, he has only considered revenue expenses and has not considered capital expenses incurred by various educational institutions and by the trust. It is submitted that trust has utilized more than 85% of its total receipts in the A.Y. 2017-2018, details is as under: Detailed application of funds of the trust for A.Y. 2017-2018 towards educational purpose as per return of income is as under: Particulars Amount Rs. A.Y. 2016-2017 Amount Rs. A.Y. 2015-2016 Income of the trust 364506028 468465500 Educational Income including Fees and other educational receipts 566133867 1315531244 Total Income 930639 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Hon. CIT (Exemption) is not understood the provision of section 10(23C)(vi) of the Act in true spirit. As per provision of the said section it is mandatory that Educational Institution must exist 'Solely' for educational purposes. 'Solely' means exclusively and not primarily. It is to be construed that activities of the trust must be solely for educational purpose irrespective of whether constitution of the trust is having ancillary objects other than educational. 15. Appellant trust is submitted that it is existing solely for educational purpose and not for the purpose of profit motive. It is further submitted that if pure education, which is one of the purposes of the trust, is to survive, it will have to be brought into relation with the life of the community as a whole, not only with the refined delight of a few gentlemen of leisure. Real education is one which makes a student socially relevant. It was in that mind that other Social Activities objects are incorporated in the trust deed so that students in the institution were able to get real education. The sole/main purpose therefore remained education . If a trust incorporated the other ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(23C)(vi) is on the word solely for education. Education connotes the process of training and developing the knowledge, etc., of students by normal schooling. The assessee Trust though submitted clarification regarding its medical object but conveniently remained silent on its object of scholarship. The assessee Trust also remain silent regarding its other non-educational objects such to organize Family Planning Centers, undertake activities for upbringing and training for self-reliance to orphan and deserted women and children, etc. Thus it clearly proves that the assessee is not existing solely for the purpose of education . The assessee trust has not submitted documentary evidence, which could establish its contention that such scholarships are in fact been used by those students for the purpose of education. Thus the contention of the assessee that the activities of the Trust are only for education is also not correct. The Hon. Supreme Court in the case of Dharamposhanam 114 ITR 463 has held that whether a Trust is for charitable purpose or not is to be determined by reference to all the objects for which the trust has been brought into existence and for considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plain and grammatical meaning of the term 'sole' or 'solely' however, is 'only' or 'exclusively. [Para 50] In all provisions of section 10(23C)(iiiab), (iiiad) and (vi), the positive condition 'solely for educational purposes' and the negative injunction 'and not for purposes of profit' loom large as compulsive mandates, necessary for exemption. The expression 'solely' is therefore important. Thus, a trust, university or other institution imparting education, as the case may be, should necessarily have all its objects aimed at imparting or facilitating education. Having regard to the plain and unambiguous terms of the statute and the substantive provisions which deal with exemption, there cannot be any other interpretation. [Para 51] The seventh proviso to section 10(23C)(vi) alludes to business and profits (being profits and gains of business, unless the business is incidental to the attainment of its objectives and separate books of account are maintained by it in respect of such business'). The interpretation of section 10(23C), therefore, is that the trust or educational institution must solely exist for the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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