TaxTMI 
TaxTMI 
2020 (2) TMI 15
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....ee has filed affidavit giving explanation for delay and seeking condonation thereof. The assessee has explained the inadvertent lapse on the part of the tax consultant and thereby the order of the CIT(A) could not be communicated properly. A reading of the consequence of the event is pointed out in the affidavit gives an impression of bonafide lapse. The delay in filing the appeal is thus condoned. 4. For the sake of convenience, the relevant grounds of appeal raised by the assessee in relation to AY 2011-12 in ITA No. 712/Ahd/2017 is reproduced hereunder: "1. The L'd CIT(A)-2 has erred in sustaining / upholding the action of L'd AO to withdraw exemption U/s 11 of the IT Act claimed by the appellant Trust and thereby treating surplus of Rs. 19,86,737/- generated from conducting safety training programme and activities as income from activities in the nature of trade / commerce or business by incorrectly interpreting provisions of Section 2(15) of the Income Tax Act 1961. It is prayed that the exemption U/s 1 1 of Rs. 19,86,737/- be allowed. 2. The L'd CIT(A)-2 has wrongly confirmed disallowance of prior period expenses of Rs. 4,905/-. It is prayed that the....
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....Assessing Officer has disallowed the claim of exemption made u/s. 11 by holding that the activities of the appellant were not in the nature of education as defined in section 2(15) of the Act. The Assessing Officer has mainly relied upon the decision of Hon'ble Supreme Court in the case of Sole Trustee, Lok Shikshna Trust Vs. CIT (1975) 101 ITR 234. I have also gone through the decision of Hon'ble Supreme Court and find that the education as mentioned 2(15) connotes the process of training and developing the knowledge skill, mind and character of students by normal schooling. Undisputedly, the appellant was not engaged in the activity of normal schooling education. This decision of Hon'ble Supreme Court has been relied upon by various judicial authorities and a few of such decisions are as under:- (i) New Elim Charitable & Educational Trust Vs. CIT (2013) 40 taxmann.com 373 (Cochin-Trib.) - Relying upon the decision of Hon'ble Supreme Court in the case of Sole Trustee, Lok Shikshna Trust Vs. CIT (1975) 101 ITR 234, it is held that all modes of acquiring knowledge cannot be considered to be educational activity. Only "education" acquired in the course of normal sc....
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....g in Industries (Industrial safety), for people commuting on roads (road safety) and for the persons working at homes (home safety) etc. 9.1 Having regards to the objects, the learned senior counsel made two fold submissions; firstly, objects of the trust are 'educational' in nature and therefore squarely covered by the main provision of Section 2(15) of the Act and therefore, the activity is to be regarded to be 'for charitable purpose' without any further encumbrance. Secondly and without prejudice, the objects of the assessee would fall in the category of 'advancement of any other object of general public utility' but without any commercial motive and therefore, the proviso to Section 2(15) of the Act has no applicability in the facts of the case. 9.2 To buttress his arguments on facts that the assessee trust is engaged in educational activities contemplated under s.2(15) of the Act, the learned senior counsel placed on record various magazines and booklets published by the assessee trust from time to time viz; Handbook on First Aid; Do's & Don'ts of Industrial Activities; Our Health; Monthly Magazine published by the Trust 'Suraksha'. The learned senior counsel asserted tha....
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....siness should be inferred in the instant case as the assessee is not engaged in sale or purchase of any commodity but is carrying on safety training programmes, seminars, conferences, workshops on safety awareness. For carrying such educational programmes fees are required to be charged for meeting the expenses incurred as conducting such programmes cannot be possibly free. It was thereafter asserted that what is relevant is the utilization of trust funds for determination of true motive. The assessee trust has utilized the funds for acquiring capital assets, for meeting expenses for pursuing objects of the trust etc. and did not divert the surplus funds for any personal use or for any individual benefit. Elaborating further, the learned senior counsel submitted that the Government of Gujarat also recognized the activity of the trust and has provided grants on regular basis. The managing committee of various safety training activities comprises of Government nominees too. Under these circumstances, the learned senior counsel submitted that seen from any angle, there was no justification on the part of the Revenue to deny exemption claimed on surplus received from such charitable ac....
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....l not be a 'charitable purpose', if it involves carrying on of any activity in the nature of trade, commerce or business. This amendment has given rise to the present litigation. It is the case of the assessee that in order to carry on the charitable object, it is necessary to charge certain fee or consideration for the services rendered and such an act of trust cannot give colour of trade, commerce or business to the solemn objects carried out just for the reason that fee or charges are being recovered. 11.3 The courts have stated that if the activities are being carried on as part of charitable object, it cannot be said to be in the nature of trade, commerce or business. The Hon'ble Supreme Court in the case of Queen's Educational Society vs. CIT [2015] 372 ITR 699 (SC) has held that a surplus arising from activities would not necessarily mean that institution is being carried on 'for profit'. The Hon'ble Gujarat High Court in the case of DIT(Exemption) vs. Gujarat Cricket Association Tax Appeal No. 123 of 2014 judgment dated 27.09.2019 inter alia observed that the profits, if any, ploughed back into the very activities of promotion and development of sport of Cricket and there....