2015 (4) TMI 668 - AT - Income Tax

Tribunal allows Revenue's appeals despite delay, rules in favor of assessee's educational activities exemption

The tribunal admitted the appeals filed by the Revenue despite a 6-day delay in filing, as the reasons for delay were deemed acceptable. Regarding the ... Charitable activities in the nature of educational activities - It was observed that assessee is not engaged in providing structured education programme - assessee is neither providing formal education nor is instrumental in awarding degrees or certificates from any recognized universities/institutions. - Assessee submitted that, assessee is receiving grants from overseas in order to achieve its objectives. The objects of the assessee-society are to promote research and development of higher education in professional management on scientific lines. - Held that:- It is an undisputed fact that the assessee is enjoying benefit of sec.12A(a) of the Act since 1980. The assessee is carrying on its charitable activities viz. providing education in accordance with its objects. The status of the assessee as charitable organization has been accepted by the Department right from the beginning. For the first time in assessment year 2009-10, activities and the objects of the assessee were questioned. We are in complete agreement with the view taken by the Tribunal that the activities of the assessee are related to education and, therefore, is entitled to exemption under section 11 of the Act. At this stage, it is required to be noted that right from the assessment year 1995-96 till 2008-09 the activities of the assessee has been considered by the Revenue as educational activities. Considering various activities of the assessee as narrated by the Assessing Officer in paragraphs 4 and 5 of the assessment order and considering the decision of the Division Bench of this court in the case of Gujarat State Co-operative Union [1992 (2) TMI 74 - GUJARAT High Court], we confirm the view taken by the Tribunal that the activities of the assessee is related to education and, therefore, is entitled to exemption under section 11 of the Act as claimed. As we have observed earlier that the objects of the assessee are similar to the objects of Ahmedabad Management Association. Thus, we are of considered view that the judgment rendered by the Hon’ble Gujarat High Court in the case of Ahmedabad Management Association [2013 (11) TMI 1332 - ITAT AHMEDABAD] squarely applies to the present case as well. Accordingly, we uphold the findings of the Commissioner of Income-tax(Appeals), - Decided against the revenue. Issues Involved:1. Delay in filing of appeals.2. Determination of the nature of the assessee's activities under Section 2(15) of the Income-tax Act, 1961.3. Eligibility for exemption under Section 11 of the Income-tax Act, 1961.Issue-wise Detailed Analysis:1. Delay in filing of appeals:The appeals were filed by the Revenue with a delay of 6 days. An affidavit citing reasons for the delay was submitted. After reviewing the affidavit, the tribunal found the reasons for the delay to be sufficiently explained and condoned the delay. The appeals were admitted to be heard on merit.2. Determination of the nature of the assessee's activities under Section 2(15) of the Income-tax Act, 1961:The assessee, a trust registered under Section 12A(a) of the Income-tax Act since 1980, was scrutinized by the Assessing Officer (A.O.) for the assessment years 2009-10 and 2010-11. For the year 2009-10, the A.O. held that the assessee was not imparting formal education and thus was not covered by Section 2(15) of the Act. Consequently, the assessee was deemed ineligible for benefits under Section 11. For the year 2010-11, the A.O. classified the assessee's activities under 'general public utility' and invoked the proviso to Section 2(15) due to the receipt of fees in excess of Rs. 10 lakhs for services rendered.The Revenue argued that the assessee was not providing structured education programs and was not awarding degrees or certificates from recognized institutions. The Revenue contended that the assessee was merely organizing seminars, workshops, and short courses for the public, and collecting fees for these activities, which should not qualify as 'education' under Section 2(15).The assessee countered by asserting that its activities, including organizing lectures, conferences, and seminars, were aimed at promoting higher education in professional management on scientific lines. The assessee emphasized its affiliation with the All India Management Association (AIMA) and drew parallels with the Ahmedabad Management Association, whose similar activities were deemed educational by the Gujarat High Court.3. Eligibility for exemption under Section 11 of the Income-tax Act, 1961:The Commissioner of Income-tax(Appeals) examined the objects and activities of the assessee and referenced the Ahmedabad Bench of the Tribunal's decision in the case of Ahmedabad Management Association vs. JDIT, which upheld that such activities fall under 'charitable purpose' as defined in Section 2(15). The Commissioner concluded that the assessee's activities were educational and thus eligible for exemption under Section 11.In support of the assessee, the Tribunal reviewed the Memorandum of Association of both the assessee and the Ahmedabad Management Association, noting their similar objectives. The Tribunal referenced the Gujarat High Court's decision which clarified that 'education' under Section 2(15) includes systematic dissemination of knowledge and training in specialized subjects, not limited to formal schooling. The High Court's interpretation emphasized that educational activities need not be restricted to traditional classroom settings but can encompass various forms of knowledge dissemination.The Tribunal concluded that the assessee's activities were indeed educational and fell within the definition of 'charitable purpose' under Section 2(15). Consequently, the assessee was entitled to exemption under Section 11, and the appeals filed by the Revenue were dismissed.Order pronounced on Friday, the 20th of March, 2015 at Chennai.