TaxTMI 
TaxTMI 
2013 (9) TMI 333
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....ucation. (3) The learned CIT(A) ought to have appreciated the fact that the objects of the society includes non-educational purposes which will bar the assessee from claiming the exemption u/s. 10(23C)(iiiad) of the Act. (4) The learned CIT(A) failed to see that the assessee has likelihood and the capacity to engage in different activities other than solely for the purpose of education as empowered by the Aims and Objectives. (5) ..." 3. At the very outset, the learned counsel for the assessee mentioned that the issue involved in this appeal has to be set aside to the file of the assessing officer in tune with the consistent view taken by the Tribunal in similar matters, as in Asst. Director of Income tax (Exemption), Hyderabad V/s. Agarwal Siksha Samithi, Hyderabad (ITA No.279/Hyd/2007), vide order dated 7.3.2012, wherein the coordinate benches of this Tribunal have been setting aside the issue in dispute to the file of the assessing officer with certain directions, relying on the still earlier order of the Tribunal dated 29.1.2009 in the case of Vasavi Academy of Education in ITA No.1120/Hyd/2009, a copy of which has been filed b....
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....f it is the former the purpose would not be charitable purpose but if it is the latter the charitable character of the purpose could not be lost. If we apply this test in the present case it is clear that the activity of obtaining licences for import of foreign yarn and quotas for the purpose of indigenous yarn which was carried out by the assessee was not an activity for profit. The pre-dominant object of this activity was promotion of commerce and trade in art silk, raw silk, cotton yarn, art silk cloth, silk cloth and cotton cloth which was clearly was an object of general public utility and profit was merely a by-product which resulted incidentally in the process of carrying 'out the charitable purpose. After discussing several legal .. aspects connected to this case the Honourable Supreme Court has held that purpose for which the assessee was established was a charitable purpose within the meaning of section 2 clause (15) of the Act and the income of the assessee was exempt from tax. In the case of CIT Vs Federation of Indian Chamber of Commerce & Industry 130 ITR 186 (SC) the Honourable Supreme Court has again noticed the first objective of the assessee as men....
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....nt was to serve in the field of education which is strengthened by the fifth objective. This objective of the appellant has to be treated as the primary or dominant purpose for which' the appellant was formed. It is to effectuate this objective the appellant has set up a pharmaceutical college after obtaining the necessary approvals from the concerned Government Departments. In the year of account under appeal the appellant has admitted the students selected by the Government for undergoing Pharmacy course. This is a four year course after which the students are allowed to take examination conducted by the Government for awarding a degree as a Pharmacist to the successful students. For conducting this course on regular basis, the appellant has set up necessary infrastructure by way of class rooms, laboratories alongwith teaching and non-teaching staff. In doing so the appellant has fully complied with the norms laid down by the Honourable Supreme Court with regard to the sense in which the word "education" has been used in section 2(15) of the Act in the case of Sole Trustee Loka Shikshana Trust Vs CIT (1975) 101 ITR 234 (SC). Under the circumstances it may be seen that the appella....
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....bjective is to serve in the filed of education. As ruled out by the Honourable Supreme Court in the aforesaid three cases the primary or the dominant objective of the appellant society is to carry on the educational activities. To carryout this object the appellant has set up a pharmaceutical college, acquired necessary infrastructure, admitted the students selected by the Government for admission into pharmaceutical course, conducted regular classes and laboratory experiments over a period of four years. In this manner the appellant has prepared the students for taking the examination conducted by the Government and get a degree as pharmacist. Apart from this the appellant has not done any other work in the year of account. In this connection reliance is placed on the decision of Honourable Supreme Court in the case of Aditanar Educational 'Institution Vs Additional CIT (1997) 224 ITR 310 (SC) (Supra) wherein it was held that the availability of exemption should be evaluated each year to find out whether institution existed during the relevant year solely for educational purposes and not for the purpose of profit. Thus the activities of the appellant in the year of....
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.... monies of the trust to other objectives which are not solely education in nature, it is submitted that in the. year of account the appellant has carried out the educational activities and utilized its funds for educational purposes exclusively. The surplus left out at the end of the accounting year was utilized for the acquisition of further infrastructure for the development of educational activities. Kindly refer to the annexure 5. Under circumstances the conclusion of the Assessing Officer with regard to the utilization of the funds of the appellant has no basis. For the reasons given above, the appellant may kindly be granted exemption." 4. On the other hand, the Learned Departmental Representative, relied on the order of the assessing officer. 5. We heard both the parties and perused the material on record. We find that the issue in dispute is covered by the decision of the this Tribunal in the case of Vasavi Academy of Education (supra) wherein the coordinate Bench of this Tribunal vide is order dated 29.1.2009, has held as follows:- "3. We have heard both the parties and perused the material on record. The learned Author....