TaxTMI 
TaxTMI 
2018 (6) TMI 607
X X X X Extracts X X X X
X X X X Extracts X X X X
....mmissioner of Income Tax (Exemption) ought to have appreciated that the main objects of the Appellant is educating and dissemination of knowledge. 5.The Commissioner of Income Tax (Exemption) ought to have appreciated that when the object of Trust is for educational purposes the registration cannot rejected on the basis of first proviso to Section 2(15). 6.Without prejudice, assuming but not conceding that proviso to Section 2(15) is applicable the same would have to considered in the light of Section 13(8) in the course of assessment of the Trust and not for determining the charitable nature of the Trust. 7.The Commissioner of Income Tax ought to have appreciated that for granting registration under section 12AA only the charitable nature of the trust and genuineness of the activities, have to be examined. 8.The Appellant craves leave to adduce additional grounds at the time of hearing. 3. Ld. Counsel for the assessee submitted that main object of the assessee was to impart financial education and awareness amongst the investor community. As per the ld. Authorised Representative, ld. CIT erroneously concluded that assessee's activity would fall only under "education'....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... since it was registered u/s.25 of the Companies Act, 1956. As per the ld. Authorised Representative, there was a clause in its Memorandum of Association, which mandated utilization of its income and property solely for the promotion of its objects. Ld. Authorised Representative also pointed out that similar institutions which were imparting financial education to general public like Vijaya Financial Literacy Trust, Jnana Jyothi Financial Literacy and Credit Counseling Trust, Indian Institute of Financial Services, Insurance Research and Education Foundation, National Insurance Academy, and ITM University were given registration u/s.12A of the Act and assessee could not be singled out for a different treatment. Reliance was placed on Government's policy, strategy and road map for financial literacy. Submission of the ld. Authorised Representative was that assessee was pursuing objects of general public utility, and was eligible for registration u/s.12AA of the Act. According to the ld. Authorised Representative, question of applying proviso to Section 2(15) of the Act was something which was to be considered by the ld. Assessing Officer at the time of assessment and not relevant wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e last limb which is "advancement of any other object of general public utility''. Main objects of the assessee as it appear in its MOA is reproduced hereunder;- "1.To integrate Financial Learning, Education & Protection and propagate the need for financial planning, investment products and services, the policies and procedures, its strength and pitfalls in India or abroad either on its own or in alliance with any other person/ body in India or abroad under any arrangement 2. To collect, research, process, disseminate, distribute supply, furnish, give, send, part with, dispose of, publish, promulgate, proclaim, declare and do all such acts and deeds to make public any kind of technical, industrial, financial, economic or commercial information data, knowledge, details and the like of or relating to matters of interest to investors, organizations, associations, chambers, companies, banks or other entities including information about persons and entities who have been declared defaulters by any government, regulatory or any other body, or who are non compliant with any laws/ policies/ guidelines of the government, regulatory or any other body, or about business/companies in dist....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot 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 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 cl. (15) of s. 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''. In relation to the main object of Loka Shikshana Trust, what was held by their lordships at page 39 of the judgment is reproduced hereunder:- "39. The ITO sent a communication to the Trust on 27th April, 1963, to the effect that since the only activity of the trust was printing, publication and sale of newspaper, weekly and monthly journal, the trust carried on an activity for profit and was not entitled to exemption. In reply to that notice the sole trustee stated that the above-mentioned activities ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tegory of "advancement of any other object of general public utility". Once the object of the appellant- trust is held to be education, the trust would, according to Mr. Palkhivala, be held to be for a public purpose as defined in s. 2(15) of the Act. In such an event, it would be immaterial whether the object of the trust involves or does not involve the carrying on of any activity for profit. As against that, Mr. Sharma has controverted the submission that the concluding words of the definition, viz., "not involving the carrying on of any activity for profit" qualify only the forth category of "advancement of any other object of general public utility". According to Mr. Sharma, the concluding words qualify the first three categories of relief of the poor, education and medical relief also. In any case, submits Mr. Sharma, the object of the appellant-trust falls in the fourth category of the defination, namely, "any other object of general public utility". It is, in our opinion, not necessary to express an opinion in this case on the question as to whether the words "not involving the carrying on of any activity for profit" qualify the fourth object, viz., the advancement of any o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....harges for money or property received by them or any one of them in the course of business carried on by the Trust; (c) to buy or sell paper, ink, machines, books and materials required for the purposes of the business of the Trust; (d) to enter into contracts with agents, dealers and others in the course of the business of the Trust; (e) to employ or remove subordinates and workers necessary for the work; (f) and generally to do all things necessary and expedient in carrying out the business entrusted to him or them. 16. The original trustee or trustees shall not take any remuneration for discharging his or their duties as a trustee or trustees provided that this provision shall not preclude a trustee or trustees from being paid out of the Trust fund, such remuneration as may be deemed proper for carrying out any work and duty in connection with the conduct or management of institutions of the Trust, or with the business of printing, publishing or other activities carried on by the Trust. A trustee shall be entitled to be paid all expenses that may be incurred by him in connection with his duties as a trustee including travelling and other expenses. 18. The origi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....activities truly charitable and mentioned in the earlier categories. The ratio- decidendi of the above judgment when applied to the object of the assessee before us which admittedly is imparting financial education to the general public through programmes sponsored by Goldman Sachs, ICICI, Tata, Reliance Life etc, will clearly show that pursuing such object would not come within the meaning of "education''. In fact none of the objects as contained in the main object clauses of the MOA, will fall within the meaning of "education''. 9. This brings us to the question whether assessee's activity will fall within the last limb of "charitable purpose'' which is advancement of general public utility. The type of programmes conducted by the assessee as it appear in the documents filed before the Director of Income Tax (Exemptions) to give a bird's eye view of the nature of its activities. This is reproduced hereunder:- IFEA has been conducting Investor Awareness Programs across cities for targeted audience with the support of Various Market players. IFEA has conducted programs in association with Goldman Sachs Asset Management Company, Reliance Mutual Fund, IClCI Mutual Fund, Reliance....