TaxTMI 
TaxTMI 
2016 (10) TMI 985
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....d in the order),grossly erred in holding that the activities of the Trust do not fall under the definition of education and the Trust is not imparting education. 3. That the Learned Director of Income Tax (Exemptions) erred in holding that the MOU between R K Convent School Educational Society and the applicant Trust is in the nature of division of assets of a family unit. 3.1 That the above and other observations of the Learned Director of Income Tax (Exemptions), in the order dated 30.04.2014, are not only erroneous and vague but are also not supported with any finding to the effect that the activities of the Trust are in the nature of family business. 4. That the observations of the Learned Director of Income Tax (Exemptions) that R K Convent School Educational Society was not legally entitled to part with its assets without seeking necessary approvals! sanctions from the Competent Authority, without citing the exact default, if any, is not relevant in disposing the applicant Trusts' request for registration u/s 12A of the Income-tax Act, 1961. 5. That the observations of the Learned Director of Income Tax (Exemptions) are contradictory, based on surmises and conject....
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....e President of the Society, R. K. Convent School Educational Society, Shri N. C. Bansal. The said society is registered u/s. 12AA of the Income Tax Act, 1961 and has been carrying out its educational activities since many years. The society has parted with its some of the activities since many years. The society has parted with its some of the activities - R.K. Films and Media Academy and R. K. College of Systems and Management and authorized the applicant trust to carry out the same. Further, some of the assets of the society too have been transferred to the trust at its book value. In this regard, a reference is made to a document submitted by the applicant during the course of proceedings which states as under: "The Secretary submitted that Mr. Deepak Bansal, the Administrative In-charge of the Society's unit 'R. K. Films & Media Academy' at New Delhi, has conveyed to him that he is inclined to start an Educational Trust by himself AND as he has been long associated with the society in a successful & responsible administrative capacity to manage the affairs of the Society's unit viz. R. K. Films & Media Academy at New Delhi, is willing to take over the entire ....
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....ettle his son in business as happens in any other business family. 5.3. It needs to be noted that Shri Deepak Bansal is already Administrative In-charge of society's unit which has been transferred to the trust settled by him. Thus the society has not apparent gain of better management or control by passing/ transferring the control of some of the activities to another trust which happens to be settled by the same person i.e. Sh. Deepak Bansal, who is already running the same while being in the society." ii) Ld. DIT(E) held that the whole arrangement not being genuine, it was in the interest of Revenue that such transactions are not allowed to be passed off as genuine charitable activities so that the tax benefit meant for true charitable institute is not usurped by scheming / opportunist entrepreneurs iii) The Ld. DIT(E) held that R.K. Convent School Education Society being registered under Societies Registration Act and also under section 12AA of I.T. Act was not legally allowed to part with its assets (to the applicant trust) without seeking necessary approvals / sanctions from competent authority in terms of societies registration act and also from Directorate of Income T....
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....onal Society (2012) 206 Taxman 131 (P &H) (HC) (MAg.), CIT vs. Red Rose School (2007) 162 Taxman 19 (All.), Prayer for India v. ITO (2011) 7 ITR (Trib.) 201 (Chennai), Director of Income Tax v. Foundation of Opthalmic & Optometry Research Education Centre (2013) 355 ITR 361 (Delhi), CIT (E) v. Sai Ashish Charitable Trust , Jaipal Singh Sharma Trust vs. CIT Ghaziabad I.T. No. 6475/Del/2014 , Shriram Education Foundation vs. DIT(E) ITA No. 1399/Del/2011 & ITA No. , Jaipal Singh Sharma Trust vs. CIT Ghaziabad I.T. No. 6475/Del/2014 and Shriram Education Foundation vs. DIT(E) ITA No. 1399/Del/2011 & ITA No. 3011/Del/2011. The Ld. AR of the appellant further argued that the observation of the Ld. DIT(E) that the transfer of the activities of R.K. Convent School Education Society Appellant trust amounted to transfer of family assets was totally unconceivable and beyond imagination. Ld. AR of the appellant also contended that the observation of Ld. DIT(E) that the activities carried out by the appellant trust did not amount to education was contradictory in itself ; the Ld. DIT(E) having herself stated in paragraph 3 of her order that the activities of R.K. Convent School Education societ....
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....nd was engaged in running of the aforesaid educational units of R.K. Convent School Education Society while these units were being run by R.K. Convent School Education Society. The appellant trust, through the aforesaid educational units taken over from R.K. Convent School Education Society is imparting professional education and training through certain courses in the fields of Mass Communication & Journal ism(6 months course), Mass Communication and Journalism (1 year courses), Acting (2 months course), Acting (3 months course), Acting (6 months course) Radio Jockey and News Reading & Anchoring (Hindi) (3 months course), Radio Jockey and News Reading & Anchoring (English) (3 months course) and Advertising and Public Relations (6 months course). Ld. DIT(E) has noted the details of these courses in paragraph 4.2 of her order. She also had specifically asked the appellant trust whether it was affiliated to any university / Govt. Body / local body / education board , etc. for carrying out such courses ; to which, as noted by Ld. DIT(E) in her order ; the appellant trust, replied as under :- "Our activities primarily consists of providing vocational education on 'no profit no loss ba....
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....d a portion of the relevant para of the aforesaid decision, it will be useful to peruse the entire paragraph of the Supreme Court decision. When the entire paragraph is reproduced, we find that in this case the Hon'ble Supreme Court has observed 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 sense, travelling is education, because as a result of travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge. Again, when you grow up and have dealings with the 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....
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.... appellant trust we are of the view that the activities of the appellant trust are to be regarded as "education" ; and, decision of Hon'ble Supreme Court in the case of Sole Trustee vs. Lok Shikshana Trust vs. CIT(Supra) to not accept the activities as charitable was appl icable to the facts of that case alone. The ratio of that case, when applied to the facts of the case before us advances the case of the appellant. Ld. DIT(E), by not referring to the entire paragraph from the order of Hon'ble Supreme Court in the case of Sole Trustee, Lok Shikshana Trust vs. CIT (supra) ; and by referring to only part of the paragraph, may have rendered herself prone to misinterpreting the ratio of Supreme Court decision in the case of Sole Trustee, Lok Shikshana Trust vs. CIT(supra). We further find that the Delhi Bench of ITAT in the case of Divya Yog Mandir Trust v. Jt. CIT (2013) 37 taxmann.com 227 / 60 SOT 154 (URO) Delhi has held that any form of educational activity involving imparting of systematic training in order to develop the knowledge, skill, mind and character of student is to be regarded as education and concluded that imparting of yoga yoga training through well structured yoga s....
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....es or programmes are part of regular curriculum of any university / education programme. Even if these are just skill development/ enhancement courses / programs, it meets the requirements for being regarded as "education". The view of Ld. DIT(E), expressed in para 5.7 of her impugned order, that courses / programs run by the appellant cannot be termed as "education" is based on entirely irrelevant considerations. In any case, as per para 4.3 of impugned order of Ld. DIT(E), the courses run by appellant trust were imparted in association with University of Delhi and Shyam Lal College. The Ld. DIT(E) has not refuted this. She has neither highlighted any relevant consideration nor brought out any adverse material on the basis of which it can be reasonably held that the activities of the appellant trust cannot be termed as "education" considering that we have already held, after considering judicial precedents that the word "education" is to be interpreted widely and liberal ly. In the case before us, we have already noted earlier in paragraphs 4 and 6.1 of this order that the appellant trust is providing professional education and training through courses in the fields of mass commun....
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....te parties (such as those who apply for registration u/s 12A / 12AA of I.T. Act) wish to carry out charitable activities for the larger benefit of society i.e. in public interest; there is l ittle confl ict between private interest and public interest. In situations when there is l ittle conflict between private interest and public interest, law should be interpreted liberally, subject to reasonable limits, in a way which advances public interest through charitable activities of private parties. The decision of Hon'ble Supreme Court in the case of Sole Trustee, lok Shikshana Trust vs. CIT (supra) provides us with a sense of reasonable limits of liberal interpretations in such situations, though ; and the words should not be so widely and liberally interpreted as to result in farfetched exaggeration. 10. In view of the foregoing discussion and in the facts and circumstances of the appellant's case it is held that the activities of the appellant trust are to be regarded as "education". 11. As far as genuineness of activities is concerned Ld. DIT(E) has once again taken an adverse view against the appellant trust on the basis of inadequate/irrelevant facts. For the purposes of regis....
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....required to be taken by R.K. Convent School Education Society before transfer of assets to the appellant trust and under which provisions of section 12AA / 12A of I.T. Act registration must be denied to the appellant trust based on the unsubstantiated and vague consideration that R.K. Convent School Education Society had indeed not taken such approvals / sanctions. Ld. DIT(E) has also not specified in her impugned order whether any action has been taken against R.K. Convent School Education Society for the alleged failure of the said society to obtain necessary approvals / sanctions from the competent authority in terms of Societies Registration Act and from Directorate of Income Tax (Exemptions). Further even if R.K. Convent School Education Society transferred the assets without necessary approvals / sanctions from competent authority in terms of Societies Registration Act and from Directorate of Income Tax (Exemptions) as alleged, there is nothing in section 12AA / 12A of I.T. Act that makes the appellant, the transferee, liable to rejection of registration. Perusal of paragraph 5.4 of impugned order of Ld. DIT(E) where she opined that it was in the interest of Revenue that such....