TaxTMI 
TaxTMI 
2023 (5) TMI 792
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...., as a matter of convenience, these appeals were heard together and are being disposed off by way of this consolidated order. With the consent of the parties, the assessee's appeal for the assessment year 2017-18 is taken up as a lead case and the decision rendered therein shall apply mutatis mutandis to other appeals. 3. For reference, the grounds raised by the assessee in its appeal for the assessment year 2017-18 are reproduced as under:- "Based on the facts and circumstances of the case, Indian Institute of Banking & Finance (hereinafter referred to as the "Appellant') craves leave to prefer an appeal against the order passed by the learned Commissioner of Income-tax (Exemptions), Mumbai [hereinafter referred to as the learned CIT") under section 10(23C)(v) of the Income-tax Act, 1961 (hereinafter referred to as the 'Act'), on the following grounds, each of which are without prejudice to one another. Non-grant of exemption under Section 10(23C)(vi): On the facts and circumstances of the case and in law, the learned CIT, has erred in: 1. holding that the Appellant does not exist solely for educational purpose and is involved in ....
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....entral/ State Government and since IIBF does not have any approval from AICTE, the activities cannot be considered as educational in nature. The Appellant craves, to consider each of the above grounds of appeal without prejudice to each other and craves leave to add, alter, delete or modify all or any of the above grounds of appeal." 4. The brief facts of the case as emanating from the record are: The assessee is an Indian company incorporated under section 26 of the Indian Companies Act, 1913 on 30/04/1928. Initially, the company was an association called the Indian Institute of Bankers and subsequently, the assessee's name was changed to the Indian Institute of Banking and Finance from 28/08/2003. The assessee claiming itself to be an educational institution existing solely for educational purposes and not for the purpose of profit filed an application dated 24/10/2017 seeking exemption under section 10(23C)(vi) of the Act for the assessment year 2017-18. Upon perusal of the aforesaid application and the details filed by the assessee, it was observed that the object of the assessee prima facie shows that the entire work of the institution is related to developing prof....
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....ed for the first time by the Revenue. However, the Tribunal after referring to the objects of the assessee granted exemption under section 10(22) of the Act. The said order was followed in assessment years 1997-98 and 1998-99. The learned AR submitted that the objects of the assessee continued to remain the same without any change. For assessment years 1999-2000 to 2007-08, assessee's applications for grant of exemption under section 10(23C)(vi) of the Act are still pending disposal. For the assessment years 2008-09 to 2014-15, the assessee's claim for grant of approval was rejected by the prescribed authority which orders have been the subject matter of challenge before the Hon'ble jurisdictional High Court by way of the writ petition, wherein the Hon'ble Court has admitted the petitions and same are pending for final disposal. For the assessment year 2016-17, the coordinate bench of the Tribunal restored the assessee's application for de novo consideration, which has again been rejected by the learned CIT(E) and the assessee is in appeal before the Tribunal in the present batch. The learned AR by referring to the list of activities conducted by the assessee and the details of cou....
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....s further submitted that the assessee charges a one-time fee of Rs.1500 which is initially taken to the balance sheet and then annually proportionately credited to the income and expenditure account over a period of 35 years. Thus, it was submitted that the assessee was existing solely for the purpose of education and therefore it is entitled to exemption under section 10(23C)(vi) of the Act. 6. On the contrary, the learned Departmental Representative ("learned DR") by vehemently relying upon the impugned order submitted that the RBI never approved the assessee and only the committee of RBI recommended that one of the courses may be offered by the assessee. The learned DR submitted that the assessee is only involved in the capacity building of existing employees of the bank and its membership is only for skill upgradation. By referring to the compilation, the learned DR submitted that out of 50 courses, the e-learning facility is only available in 13 courses. Further, the main source of income of the assessee is from examination, and even for more than one attempts the assessee is charging the examination fees. By referring to para 7.2 of the impugned order, the learned DR submi....
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....f the Act. The coordinate bench also referred to the decision of the Hon'ble Supreme Court in Sole Trustee Lok Shikshana Trust vs CIT, [1975] 101 ITR 234, which has also been relied upon by the learned CIT(E) in the present case, and held there is nothing in the judgment to suggest that the court meant to convey that educational activities could be pursued only in a formal atmosphere such as a school or college in the sense in which we know them. The coordinate bench after referring to the decision of the Hon'ble Supreme Court in ADIT vs Surat Art Silk Cloth Manufacturers‟ Association [1978] 121 ITR 1 (SC) held that the law does not place an embargo on profit-making or surplus resulting, and what is prohibited is profiteering or the profit motive. The coordinate bench further held that the assessee has collected subscriptions from its members including institutional members (banks) which are substantial, which in part have gone to subsidise the expenses of conducting tutorial classes and examinations and the supply of study material. Accordingly, the coordinate bench directed the Assessing Officer to grant exemption to the assessee under section 10(22) of the Act. 9. We fi....
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....rm "solely" in section 10(23C)(vi) of the Act, it becomes necessary to examine the objects of the assessee in light of the aforesaid decision of the Hon'ble Supreme Court. In any case, the Hon'ble Supreme Court in Aditanar Educational Institution vs ACIT, [1997] 224 ITR 310 (SC) held that availability of exemption should be evaluated each year to find out whether the institution existed during the relevant year solely for educational purposes and not for purposes of profit. 12. We find that the following objectives of the assessee are enumerated on page 107 of the paper book:- "3(c)(i) To facilitate the study of the theory and practice of banking and finance and for that purpose to institute a scheme of certificates, scholarships, and prizes. (ii) To develop professionally qualified and competent bankers and finance professionals primarily through a process of education, training, examination, consultancy, counseling and continuing professional development programs. (iii) To test and certify attainment of competence in the profession of banking and finance. (iv) To collect, analyse and provide information needed by professionals in banking and....
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.... a question about sharing the same information specifically with its members on a daily/monthly/quarterly basis. Even by following the accounting treatment of initially taking the membership fees to the balance sheet and then annually proportionately crediting to the income and expenditure account over a period of 35 years, the assessee in the year ending 31/03/2017 has still declared lifetime membership fees of Rs.4,85,04,165 in its profit and loss account as compared to Rs.2,92,53,302 in the preceding year. Further, it is undisputed that the membership is available only to employees of the bank and financial institutions. Therefore, from the above, we are of the considered opinion that all the objects of the assessee are not for the purpose of education but the same also include the dissemination of information helpful to professionals in the banking and finance industry for their professional development. Thus, from the above, it is evident that all the objects are not aimed at or related to imparting education or in relation to educational activities. In this regard, the observation of the Hon'ble Supreme Court in Sole Trustee Lok Shikshana Trust (supra) becomes relevant wherei....
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.... of New Noble Educational Society (supra). Further, though the books are recommended for a particular certificate course, there is no restriction on their purchase from the bookstore by a person, who is not pursuing the said certificate course and is only interested in the subject. It cannot be denied that payment of Royalty generally depends on the amount of sale. Therefore, we are of the considered opinion that the decision of the assessee, to provide copyright in the course material to the publishing houses and earn royalty from them, is to earn more profit and is not solely for the purpose of education. 15. Therefore, from all the above findings, it is evident that even if the objects of the assessee, as claimed, have remained the same since the preceding years, the assessee has modified the way of its functioning and thus cannot be said to be existing "solely" for the purpose of education. It is pertinent to note that in section 10(23C)(vi) of the Act, before the term "solely for educational purposes and not for purposes of profit", the word "existing" is used. Therefore, even if for any year the taxpayer is found to be existing solely for educational purposes and not for p....