TaxTMI 
TaxTMI 
2016 (11) TMI 1421
X X X X Extracts X X X X
X X X X Extracts X X X X
....the light of decision of the Hon'ble Supreme Court in the case of sole Trustee Lok Shiksha Trust Vs CIT 101 ITR 234 (SC) that 'education' in Section 2(15) connotes the process of training and developing the knowledge, skill, mind and character of students by normal schooling and it does not cannot gathering of any knowledge in the great school of life." 3. From the above ground, it is gathered that the grievance of the department relates to the deletion of disallowance made by the AO by denying the exemption claimed by the assessee u/s 11 of the Income Tax Act, 1961 (hereinafter referred to as the Act). 4. Facts of the case in brief are that the assessee filed its return of income on 15.10.2010 declaring net surplus of Rs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sually attractive - especially those that are meant for the first generation reader, (vi) Start, maintain or otherwise manage libraries, reading rooms, documentation centres, non-formal education centres and other institutions of similar nature." 5. However, the AO did not find merit in the submissions of the assessee and denied the exemption claimed u/s 11 of the Act by observing that the case of the society is covered in the proviso inserted in Clause 15 of Section 2 of the Act w.e.f. 01.04.2009 and hence prima facie it is not existing for charitable. The AO determined the total income of the assessee at Rs. 36,61,756/-. 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) who had incorporated the submission....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f letter authorizing MOU between Katha and National Open School was also submitted to the AO. There are various categories of schools and vocational courses which are being run by the assessee. A list of 96 such schools was submitted. All the schools being run by assessee are meant for the poor kids living in slums and lowincome group housing colonies like Tuglakabad, Govindpuri, Seelampur, Trilokpuri etc. Schools run by the assessee are run like any school or educational institution in a systemic manner with regular classes, vocations, attendance requirements, enforcement of discipline, etc. Examinations are conducted at the end of course duration and results are declared. Running of vocational courses like music courses/safety course/fina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n, and hence sustainable in the long run. It was argued that the AO has nowhere disputed the educational activities of Katha which are its primary and dominant object. He has wrongly concluded that Katha was existing for purpose of "Any Other Objects of General Public Utility" and hence covered under the fourth limb of section 2(15) of IT Act, on the reasoning that the activity of producing and distribution of its publications was a business activity. Though the fact was that production of such publication of Katha were necessary to attain its educational objective because of unique pedagogy of story based learning in the class room. Making of profit was never Katha's objective. In the relevant year, Katha had employe 81 teachers who we....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r: "8. I have considered the assessment order, grounds of appeal and the submissions made by the assessee. In a nutshell, the single issue is whether proviso to Section 2(15) would be applicable on the assessee's case as according to the assessee it is engaged in the activities of education and/or relief to poor whereas the AO has treated the assessee as a society carrying on "objects of General Public Utility". The proviso to Section 2(15) comes into play only if a society is pursuing objects of General Public Utility and as per Section 2(15), if the assessee is carrying out the activities of education or relief to poor or medical relief there is no such restriction of not being engaged in trade/commerce/business activities (i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he proviso to section 2(15) is not applicable to such trusts. The claim of exemption u/s. 11 may therefore be allowed to the assessee alongwith all consequential benefits as it has objects & activities of providing education." 8. Now the department is in appeal. The ld. DR supported the order of the AO and reiterated the observation made in assessment order dated 20.03.2013. 9. In his rival submissions the ld. Counsel for the assessee strongly supported the impugned order passed by the ld. CIT(A) and reiterated the submissions made before him. 10. I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the assessee was en....