TaxTMI 
TaxTMI 
2011 (9) TMI 1059
X X X X Extracts X X X X
X X X X Extracts X X X X
....er directions of Director General of Shipping, Government of India." 2. Briefly stated the facts are as under. The assessee is registered Trust. It is claimed by the assessee that it is imparting training to merchant navy cadets at subsidized rates with an object to make no material surplus (service). It is further claimed by the assessee that the assessee is conducting the activity of imparting training as per the directions of Director General of Shipping, Government of India vide his order dated 11.09.2002. The assessee claims that as the assessee's activities are charitable in nature and hence, it's income is exempt u/s.11 of the I.T. Act. The assessee filed an application for registration as a Charitable Trust/institution on 17.12.2008 u/s.12AA of the I.T. Act, 1961 before the DI (Exmpt.), the assessee stated that it is conducting short-programmes for passenger-ship familiarisation and the assessee also submitted the details of the courses and its company structure which is reproduced in the impugned order by the DI (Exmpt.) the same are as under:- Course Days Schedule Fees in Rs. 1 P.S.T. (DGS Approved) 3 Days Thu 1500/- 2 PSSR (D....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perusal of the Balance-sheet of the assessee for the financial year 2007-08, page no.25 of P/B, we find that there is no infrastructure or any asset and only advances of cash and bank balances are shown. Though it is argued that the charitable activities are carried out by the Trust and Trust is created as per requirement of the Ministry of Shipping, Govt. of India. But, in our opinion, mere entity as a Trust is not eligible to claim the exemption of sec. 11. Relevant part of Sec. 11 reads as under:- "(1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income- [(a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of [fifteen] per cent of the income from such property; (b) income derived from property held under trust in part only for such purposes, the tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of the person in receipt of the income (such option to be exercised in writing before the expiry of the time allowed under sub-section (1) of section 139 [* * *] for furnishing the return of income) be deemed to be income applied to such purposes during the previous year in which the income was derived; and the income so deemed to have been applied shall not be taken into account in calculating the amount of income applied to such purposes, in the case referred to in sub-clause (i), during the previous year in which the income is received or during the previous year immediately following, as the case may be, and, in the case referred to in sub-clause (ii), during the previous year immediately following the previous year in which the income was derived. (1A) For the purposes of sub-section (1),- (a) where a capital asset, being property held under trust wholly for charitable or religious purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring another capital asset to be so held, then, the capital gain arising from the transfer shall be deemed to have been applied to charitable or religious purposes to the extent spec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e property which is held wholly for charitable or religious purposes and income is also to be applied for the religious or charitable purpose in India and if the income is accumulated the same is permissible to the extent of the 15%; and (ii) there should not be any commerciality in the object of the Trust. 7. We find that the trustees are taking remuneration from the assessee-trust,( page no.26 of the paper-book) and which is reflected in the Income and Expenditure A/C. for the financial year 2007-08. In the case of Sole Trustee, Loka Shikshana Trust vs. CIT, Mysore 101 ITR 234, while interpreting the word "education" appearing in subsection (15) of sec.2 of the Act the Hon'ble Supreme Court held as under:- "The sense in which the word "education" has been used in section 2(15) in 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 se....