TaxTMI 
TaxTMI 
2018 (11) TMI 995
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.... 300(Mad.) which was in favour of the assessee and not applicable to the issue to be decided. 6) Having quoted and relied on an unreported case of the ITAT in Prathima Educational Society vs. DCIT in ITA No.1767/Hyd/2011, the CIT(A) ought to have given a copy of the said judgment he relied on. 7) At any rate the CIT(A) ought to have directed application of tax at rates applicable to individuals and AOP. 8) The CIT(A) went wrong in ignoring Ground No. 8 which was an alternate claim for allowing exemption u/s. 10(23C)(iiiad). 3. The facts of the case are that the assessee is a Trust formed with the object of imparting education. The assessee filed its return of income for the assessment year 2003-04 on 31/10/2003 declaring Nil income after claiming deduction of Rs. 6,60,505/- u/s. 11 of the Act. On going through the activities performed by the Trust, the Assessing Officer observed that the assessee is not a charitable trust but running a parallel college/coaching centre to make profit and the same was distributed to the trustees by way of allowances and interest and therefore, deduction claimed u/s. 11 of the Act was not allowable. Accordingly, he denied exemption claimed unde....
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....rrived after considering the liability of Rs. 141,640/-. The salary paid to teachers comes to Rs. 90,455/- it includes special allowance granted to teachers having administration charges. On going through the decision taken at the G.B. meeting held on 26.10.2003, it is seen that the outstanding liability of Rs. 112,500/- payable to the teachers as allowance is distributed to 19 trustees (16 trustees are teachers) @ Rs. 4500/- and the balance of Rs. 27000/- is earmarked for the purchase of library. Rs. 85,500/- was paid on 31.03.2004 through acquittance. The salary to teachers was calculated on the basis of hours of classes taken by them and the number of students in each class but there is no provision for any other allowance. The assessee has failed to produce any appointment letter or contract made between the teacher and the management to verify the correctness of providing allowance to teachers. They informed though the letter dated 17.01.2006 that there is no appointment letter or written contract entered with the teachers. In addition to the above, the licence fees paid to Shri Babu Premraj (Jt. Secretary) for conducting P.G. Centre is Rs. 16000/- for the F. Y. 2002-03 bu....
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....Rs. 112,500 payable to teachers was distributed to 19 trustees @ Rs. 4500/- each i.e., a fixed allowance and not on hourly basis. Further, Joint Secretary was paid licence fee of Rs. 16000/- for conducting P.G Centre during the F.Y. 2002-03 which was later enhanced to Rs. 40,000/- vide agreement dated 02.06.2003 which, according to the CIT(A), is a direct benefit to trustee. The CIT(A) referred to section 13(l)(c)(ii) of IT Act which reads as follows:- "13(1) Nothing contained in Section 11 (or Section 12) shall operate so as to exclude from the total income of the previous year of the person in receipt thereof- (a) ........... (b).............. (bb)............ (c .............. (i)............... (ii) If any part of such income or any property of the trust or the institution (whenever created or established) is during the previous used or applied, Directly or indirectly for the benefit of any person referred to in subsection Further, sub section (3) of section 13 is as under: (3) The persons referred to clause (c) of sub-section (1) and subsection (2) are the following, namely:- (a) (b) (c) --------- (cc) any trustee of the trust or manager [by whatever na....
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....ion of the Academy for Career Development Vs. Chief Commissioner of Income tax & Ors (2009) 3I5 ITR 382, Hiralal Bhagvati Vs CIT (246 ITR 188) confirmed by SC in ACIT Vs Sitrat City Gymkhana (300 ITR 214). The Ld. AR submitted that the discharging of liability taken over from the Corporate College of Arts and Science could not stand in the way of concluding that the activities of the Trust was charitable. It was submitted that in the return of income, the system of accounting was given as cash, while in the assessment order, it was mentioned as mercantile and the appellate order is silent about this. Accoridng to the Ld. AR, the decisions cited by the CIT(A) were not relevant to the issue on hand and the decision of Sarvodaya Ilakkiya Pannai, cited supra is actually in favour of the assessee. Moreover, it was submitted that in this case Registration under section 12AA was not revoked. Section 12AA(3) is effective only from 01-10-2004, while the assessee was granted registration on 28/05/2003. Therefore, power to revoke has no retrospective operation. It was submitted that even assuming for the sake of argument that the Trust was not entitled to exemption, the rate of tax applicable....
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....matic education to the students. Now the question which arises for our consideration is when the assessee is conducting coaching classes for various examinations conducted by the Board of Examination, University etc., whether such activities of the assessee could be treated as 'education' within the meaning of sec. 2(15) of the I.T. Act. In the case of Sole Trustee, Loka Shikshana Trust vs. CIT (101 ITR 234), the Supreme Court had an occasion to consider this issue and Apex Court found that all kinds of acquiring knowledge may not come within the term "education". The Apex Court held as follows: "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 in 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 eduction. 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 ....
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....e Trustee, Loka Shikshana Trust (1970) (77 ITR 61) (Mys) has observed as follows at page 615 of the ITR: " It is true that by reason of the Finance Act, 1983, the question as to whether any charitable institution is being run with a profit motive or not has lost its relevant. However, the word "charitable" prefixing the word "institution" has to be given its full effect. It appears that one of the principal projects of the petitioner's institution has the object of coaching and preparing the students for appearing in various examinations conducted by the Board of Mining Examination and / or MI(1) section (a)(b) and the said coaching of students in an institute is not, in our opinion, an imparting of education which can be said to be a process of training and developing knowledge and character of students by normal schooling. A coaching institute cannot be said to be an institution where normal schooling is done. The definition of "charitable purpose" is inclusive and not exhaustive." 8. It is further seen that the Gujarat High Court also had an occasion to consider identical issue in the case of Saurashtra Education Foundation vs C.I.T. (2005) 273 ITR 139 (Guj). The Gujarat....