TaxTMI 
TaxTMI 
2016 (3) TMI 545
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....ithout jurisdiction. 3. For that the Commissioner of Income Tax (Appeals) erred in holding that the appellant was not entitled to claim exemption uls.1 1. 4. For that the Commissioner of Income Tax (Appeals) erred in holding that the activities carried on by the appellant fall within the ambit of the amended provisions of section 2(15). 5. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the activities carried on by the appellant are charitable in nature and fall within the ambit of "charitable purpose" as per section 2(15). 6. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the depreciation of Rs. 1,52,1 73/- claimed by the appellant trust was an application of income. 3. The brief facts of the case are that the assessee trust is registered u/s.12A(a) of the Income Tax Act vide proceedings in C.No.2/(100)/2000-01 dated 25.08.2000 and filed its return of income for assessment year 2009-10 on 29.09.2009 admitting 'Nil' income after claiming exemption u/s.11 of the Act. During the course of assessment proceedings, the ld. Assessing Officer found that assessee collected Rs. 5,68,050/- for app....
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.... following decisions. 1.DIT (Exemptions) v The Chartered Accountant Study Circle_[2012]_70 DTR 219_(Mad) 2. The Chartered Accountant Study Circle v ITO in ITA No.l97lIMds/2010 3. The Institute of Chartered Accountants of India and And v DGIT (Exemptions) [2013] 90 DTR 161 (Del) 4.Circular No.11 of 2008 dated 19 December, 2008 5. India Trade Promotion Organization v DOlT (Exemptions) & Others [2015] 374 ITR 333 (Del) 6. DIT (Exemption) v Sabarmati Ashram Gaushala Trust [2014] 362 ITR 539 (Guj) 7. DIT v Vishwa Jagriti Mission [2012] 73 DTR (Del) 195 8. CIT v Market Committee, Pipli [20111 330 ITR 16 (P&H) 9. CIT v Society of Sisters of St.Anne [19841 146 ITR 28(Kar) 10. CIT v Bhoruka Public Welfare Trust [1999] 240 ITR 513 (Cal) 11. CIT v Tiny Tots Education Society [2011] 330 ITR 21 (P&H) 12. CIT v Sheth Manual Rancbhoddas Vishram Bhavan Trust_[1992]_198_ITR 598_(Guj) 13. CIT v Raipur Pallottine Society [1989] 180 ITR 579 14. CIT v Institute of Banking Personnel Selection [2003] 264 ITR_110_(Born) 15. DIT (E) v Framjee Cawasjee Institute [1993] 109 CTR (Born) 463 16. DDIT v La....
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....ss for a cess or fee or any other consideration irrespective of the nature of use or application or retention of the income from such activity." The AO has taken a stand that by virtue of the amendment as above, the assessee is not entitled to exemption u/s.11 of the Act. 5.1. The ld. AR submitted that, the idea and understanding of the AO with regard to the scope of amendment to sec.2(15) is thoroughly wrong and misconceived. There is no trade or business in the activities pursued by the assessee and will not take it outside the purview of charity and hence, that the "proviso" added to sec.2(15) of the Act, is not at attracted to the case in hand. He also submitted that the statute, as it stood earlier, had clarified the charitable purpose mentioned in sec.2(15) of the Act, by the words "not involving the carrying on of any activity for profit". By virtue of the existence of these clarifying words, if there was any element of profit it was enough liable to be reckoned as charitable purpose right from the inception of the Act in 1961 till 1st April, 1984, when the words "not involving the carrying on of any activity for profit" were deleted. Thus the contention is that after ....
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....th limb of the amended sec.2(15) of the Act, where the prohibition of activity in the nature of trade, commerce or business for any activity of rendering service or any other consideration, irrespective of the nature of the use or application or retention of the income of such activity is specified and hence, not entitled to any exemption. 5.4. To analyse the activities carried on by the assessee, we have to go through the nature of activities pursued by the assessee and perusal of that activities carried on by the assessee, cannot be oust the involvement of "trade, commerce or business" or "any service in connection with trade, commerce or business" as contemplated under the statute. Further, we note that there is substantial variation in the statutory position as it existed earlier to 1st April, 2009, where the assessee has been given exemption under section 11 of the Act and the position available after amendment to section 2(15) of the Act, brought into effect from 1st April, 2009. Yet another important aspect to be noted in this context is that, after the amendment by incorporating proviso to section 2(15), the 4th limb as to the advancement of "any other object of general ....
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.... also and those activities cannot be classified under any of the specific activities of relief of the poor; education or medical relief. The correct way to express the nature of the activities carried on by the assessee is to say that the assessee is carrying on 'advancement of any other object of general public utility'. When that is the case, the assessee is hit by the proviso given under section 2(15). The proviso reads that 'advancement of any other object of general public utility' shall not be a charitable purpose, if it involves carrying on any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business for consideration, irrespective of the application of the money. Therefore, the case of the assessee is hit by proviso to section 2(15) and the assessee is not entitled for the benefit of section 11 for that part of income generated in the hands of the assessee from running its activities of trust. Alternatively, one has to look into section 11(4A). Sub-section (4A) provides that exemption shall not apply in relation to any income of a trust or an institution, being profits and ....
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....The sense in which the word "education" has been used in section 2(15) is the systematic instruction, schooling or training given to the young is preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word "education" has not been used in that wide and extended sense, according to which every acquisition of further knowledge constitutes education. According to this wide and extended sense, travelling is education, because as a travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby 6 ITA No.486/Coch/2013 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 know....
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....ser 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 above judgment of the Apex Court it would be abundantly clear that there should be a systematic instruction to the students by way of normal schooling. Mere coaching classes may provide some kind of knowledge to the students. But that kind of acquisition of knowledge through coaching classes cannot fall within the meaning of "education" as provided in section 2(15) of the Act. As the Apex Court observed, one may acquire knowledge in the course of travelling; during the course of reading newspaper; etc. But that kind of knowledge cannot fall within the term "education" as provided in section 2(15) of the Act. There should be a normal schooling by way of regular and systematic instruction. 10 ITA No.486/Coch/2....