TaxTMI 
TaxTMI 
2022 (7) TMI 177
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....er sense and in its widest amplitude and thereby directing the Assessing Officer to treat the activity as "education" in terms of Section 2(15) of the I.T. Act. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the ratio laid down by the Hon'ble Supreme Court in the case of Sole Trustee, Lok Shikshan Trust Vs. CIT (1975) 1010 ITR 234 (SC) , wherein it is held that, "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 education. .................. What "education" connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by formal schooling". Thus, the assessee's act of conducting coaching classes for preparation of UPSC and MPSC examinations etc. by charging huge amount of fees cannot be considered as "Ed....
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....f in this respect." 3. Both the learned representatives invited our attention to the CIT(A)'s detailed discussion treating the assessee as eligible for Section 11 exemption as under: - "(x) I have considered the submission of the appellant carefully and gone through the reasoning's enumerated by A.O. Section 2(15) of l.T. Act defines charitable purpose to include the following (i) Relief of the poor (ii) Education (iii) Medical relief (iv) and advancement of any other object of general public utility An entity with a charitable object of the above nature is eligible for exemption from tax under section 11 or alternatively under section 10(23C) of l.T. Act. However, it was seen that a number of entities who were engaged in commercial activities were also claiming exemption on the ground that such activities were for the advancement of objects of general public utility in terms of the fourth limb of the definition of charitable purpose. Therefore, section 2(15) was amended vide finance Act 2008 by adding a which states that the advancement of any other object of general public utility shall not be charitable purpose, if it ....
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.... students who imbibe knowledge. In this era this process is getting advanced and future will have a different form of education altogether For the purpose of terming education, the fundamental aspect of imbibing knowledge through the process of education has to be considered. The term education occurring in section 2(15) has been used in the wider sense and in it's widest amplitude. In the case of house of lords in IRC vs Mcmullen 54 TC 413 (HL) it was held that it cannot be whittled down by narrow sense. This is for the simple reason that the education takes verity of form and it can not be restricted to a particular form and manner. This expression is not amenable to any fixed or rigid formulae. In the case of D.V. Arur vs CIT 465 H'ble Bombay High Court held it, In my opinion, looking at the definition in the various acts, a charitable purpose which is not of' a religious character must contain the element of benefiting the public, so that a trust, the object and scope of which is limited to the education of the members of the family would not come within the definition of a charitable purpose contained in I.T. Act. H'ble Supreme Court in the case of MCD vs Child....
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....uld be imparted through normal schooling. Further, I.T.A.T Cochin in the case of Kuttukaran Foundation 51 SOT 175 (2012) held that conducting coaching classes for students for various courses appearing for open university. Distance education can not be construed as a charitable activity within the meaning of section 2(15) of I.T. Act. (xiii) Therefore, there are instances, wherein, it is held that running a coaching institute, is not a charitable activity for the purpose of section 2(15) of IT. Act, however, those decisions are based on particular set of facts. In this regard, I find force in the arguments of the A.R of the appellant that the facts involved in relied upon case viz Bihar Institute of Minning and Mine Surveying (Supra) are not identical to the facts of the appellant on the following grounds: (a) The appellant is not running a private coaching class (b) It is registered by the charity commissioner under the Bombay trust Act 1950. The activities of the trust are under the control of and are being regularly monitored by charity commissioner. (c) The CIT has granted registration u/s 12A after considering the objects and activities bein....
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....d experts capable to impart efficiently knowledge in respect of leadership training to political/ social workers, Executives / Managers in the areas such as medical science, technical knowledge, management courses, research work, intellectual and other useful pursuits and to remunerate them. 5.6 To award scholarships, loan scholarships, freeships and prizes at any school or college or other institutions and also to give any award scholarship, loan scholarship, freeships, and prizes, directly to the students studying in any school, college or any other educational institutions. 5.7 To grant or award any, sum by way of donation, scholarship; prize, or otherwise either for the purpose of establishing scholarship, prize, research; grant or otherwise whether without name or carrying particular name including conferring of honour by way of photograph, chair or otherwise. 5.8 To, institute, defend, support and provide assistance to any public interest litigation on or to provide assistance in every form to any person fighting for social cause. To provide consultancy services in the field of engineering, finance, legal, electronics, technical, project management,....
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....rs. 5.15 To establish, conduct, arrange, support, to prepare market survey reports, technical feasibility report, financial viability report and such other reports, information, data base, etc and to provide consultancy services in the field of engineering, finance, legal, electronics, technical, project management; managerial and or such other fields as may be deemed necessary to the corporate sectors and to foreign firms, associations, institutions, individuals, etc, and also to establish and support human resource placement services. 5.16 To establish, maintain, run and support human placement services, and to provide the Job opportunities to various persons. 5.17 To undertake and support any programme of development for promoting literacy, education, medical, cultural facilities and services the social and economic welfare of the public including the programme of construction. of roods, providing of wells and drinking water facilities, public parks, bus shelters, urinals and such other public conveniences and facilities and transfer or donate any funds or property of the Trust to any other trust or organization the objects or purposes whereof are simi....
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....pplied the proviso to section 2(15) of IT. Act considering the charging of fee as commercial activity with profit motive. However, as can be seen from the above, the predominant object of the trust is education and it deserves to be included in the main limb of education within the meaning of section 2(15) of LT. Act. Even it satisfies the condition as laid down by H'ble Supreme Court in the case of Sole Trustee Cited (Supra) where emphasis was given on formal education, which the appellant fulfils in the form of not only conducting coaching classes on regular basis but also carrying out other educational programmes under the guidance of YCMOU, Nashik a Govt. approved University. On careful observation of the fact, it is gathered that collection of fees is not with the intention to earn surplus, and whatever surplus the trust has accumulated over the years has been ploughed back for the educational purpose. It has constructed a new building equipped with modern class rooms and hostel at the cost of Rs.6.94 crores. There are plethora of case laws, wherein, H'ble Courts have held that mere charging of fees and accumulating surplus does not disentitle the trust from the benefi....
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.... that the CIT(A) has erred in law and facts in holding the assessee as eligible for Section 11 exemption thereby failing to consider the clinching fact that its coaching classes do not serve the purpose of education as a charitable activity within the meaning o Section 2(15) of the Act. It quotes the foregoing case law (supra) in support of its arguments. The assessee's case on the other hand derives strong support from the CIT(A)'s detailed discussion as well as the fact that it already enjoys both Section 12AA as well as Section 80G registration. Learned counsel also invited our attention to case law Gemological Institute of India (2019) 105 taxmann.com 180 (SC), Rajaneesh Foundation (Neo-Sannyas Foundation) (2002) 81 ITD 31 (Pune) (TM) as well as Surat City Gymkhana (2008) 300 ITR 214 (SC) that the assessee has been rightly held as entitled for Section 12AA registration. 5. We have given our thoughtful consideration to the foregoing rival arguments and find no force in either party's submission in its entirety. We note first of all from a perusal of the assessee's detailed paper book running into 368 pages that it has been running various study centres as per its agreement wi....