AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1444
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....g so, further erred in rejecting the grant of registration u/s. 12AB of the Act which is otherwise valid till AY 2026-27. 1.2. The Id. CTT(E) failed to appreciate and ought to have considered that: a. Rejection of registration of modification of the approved objects of the Appellant based on the alleged violations are beyond his powers granted u/s. 12AB(1)(b) of the Act. b. Even otherwise, the activities carried out by the Appellant are wholly undertaken within India and any collaboration with international institutions is solely to support and promote advancement of education in India and therefore, entering into such collaborations does not constitute a violation of section 11 of the Act. c. The payments made to overseas institutions are exclusively towards activities in connection with educational and charitable activities carried out in India and therefore, the same do not amount to application of funds outside India. Accordingly, it does not constitute violation of section 11 nor can it be considered as specified violation as defined in clause (e)(ii) of explanation to section 12AB(4) of the Act. d. The Trust Deed merely pr....
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....hich supports menstrual health awareness. 3.1 The trust was formed on dated January 16, 2009. It had obtained certificate u/s. 12AA of the Act on November 11, 2009. The said trust deed was modified in 2013 and the same was approved by the Charity Commissioner on September 07, 2013. Pursuant to the change in the Income Tax Act, the trust applied for reregistration u/s. 12A(1)(ac)(i) on April 22, 2021. The registration in respect thereof was granted for a period of five years up to AY 2026-27 as per order of the DIT dated May 28, 2021. On January 28, 2022, the Trustees of the trust passed a resolution for modification of the trust deed mainly with a view to clearly provide for specific objects relating to medical relief. The activities of medical relief were being carried out hitherto under the omnibus object of general public utility in the original trust deed. The revised trust deed was approved the Charity Commissioner on September 02, 2024. 3.2 In view of the modification of the object clause of the trust deed, the assessee made an application before the Ld. CIT(E) for approval of the modified objects as required u/s. 12A(1)(ac)(v) on December 24, 2024. The Ld. CIT(E) has b....
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....in Cambridge and IB board curriculum from its very inception. The 2009 Trust deed was subject matter of approval by the Ld. CIT at that time. This aspect was reiterated in the 2013 amendment in clause 6(i) thereof. This amended trust deed was also a subject matter of approval in 2021. Therefore, the observation made by the Ld. CIT(E) in para 4.5 of the impugned order which is reproduced as below: - "Thus, the applicant carried out expenditure out of India prior to such amendment of the Trust deed, when no such enabling clause was specified in the old trust deed.", 7. It is further submitted that the assessee has claimed exemption u/s. 11(1)(a) of the Act and not u/s. 11(1)(c) of the Act as sought to be made out by the Ld. CIT(E) in para 4.4. Section 11(1)(a) of the Act requires that the income should be applied for charitable purposes in India. The Ld. CIT(E) noted in the order that the assessee had paid 6.5 crore outside India. The Ld. AR argued that this does not mean that the payment for expenses towards the charitable activities carried out in India cannot be made outside India. If such an interpretation is taken, then, no charitable hospital will be able to import ....
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.... ... 12.8. ...Furthermore, research collaboration and student exchanges between Indian institutions and global institutions will be promoted through special efforts. Credits acquired in foreign universities will be permitted, where appropriate as per the requirements of each HEI, to be counted for the award of a degree. (FPB Pg 2856) ... 16.8. The National Skills Qualifications Framework will be detailed further for each discipline vocation and profession. Further, Indian standards will be aligned with the International Standard Classification of Occupations maintained by the International Labour Organization. This Framework will provide the basis for Recognition of Prior Learning. Through this, dropouts from the formal system will be reintegrated by aligning their practical experience with the relevant level of the Framework. The credit-based Framework will also facilitate mobility across 'general' and vocational education. (FPB Pg 2861) ... 23.4. To remain relevant in the fast-changing field of educational technology, the NETF will maintain a regular inflow of authentic data from multiple sources including educational technology ....
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....n support of certain legal propositions as under: a. Proposition 1: Application of income 'for the purposes in India' is relevant and not 'expenditure incurred within or outside India'. CIT(E) v. Ohio University Christ College [2018] 408 ITR 352 (Karnataka HC). In this case, the question before the Hon'ble Karnataka High Court was as follows: "(1) Whether on the facts and in circumstances of the case, the Tribunal is right in deleting faculty teaching charges to Ohio University towards academic expenses by holding that merely because the payments are made outside India, it cannot be said that the charitable activities were also conducted outside India even when the assessee has applied its income for charitable activities outside India and not within which is an essential condition as set out in section 11 of the Act and the assessee has not been granted such exemption by CBDT vide a special order?" After considering the factual findings rendered by the Tribunal reproduced in para 4 of the said decision, the Hon'ble High Court held that where teaching services were rendered to assessee educational trust by faculty members of a foreign u....
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....de India for carrying out its objects would not fall under any categories of 'specified violation' as mentioned in Explanation to section 12AB(4) and, thus, Commissioner (Exemption) could not deny registration under section 12AB on said ground. 12. Assessee's submissions as regards "Marwari" community The Ld. AR argued that the trust deed dated September 07, 2013, which was subject matter of approval in 2021, provides in its object, inter alia, in clause 6(ii) which is reproduced as below:- "To pay or utilize the balance of such interest dividends and income of the Trust Fund (hereinafter called "the net income of the Trust Fund" and in the discretion of the Trustees the corpus of the Trust Fund or any part of the corpus) for all or any one or more of the following charitable purposes in such shares and proportions and in such manner in all respects as the Trustees shall in their absolute discretion think fit whilst giving appropriate preference to deserving cases of Hindi Speaking students and/or students from Marwari community and otherwise without reference to caste, creed or religion...". 13. This object has been reiterated in clause 7(iii) of the 2022....
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....ywhere indicates that the trust is established for the benefit of any particular religious community or caste. It was submitted to the Ld. CIT(E) in the course of proceedings that Marwari is not a religious community but primarily an ethnolinguistic/regional group. Even the Ld. CIT(E) is the said para has acknowledged that "Marwari does not represent any religious community,...". Ld.AR argued that "Marwari" is itself is not a religion. Though majority Marwari's may follow Hinduism, they also belong to other religions like Islam, Jainism, Christianity, Buddhism. Having regard to the above, application of section 13(1)(b) by the Ld. CIT(E) is grossly misplaced. It may not be out of place to mention that in the notice issued by the Ld. CIT(E) on dated 13/06/2025, FPB Pg 2172, a reference is made to Parsi and Irani Zoroastrians community in para 2 thereof. This indicates a possibility of the Ld. CIT(E) being coloured by some other case handled by him where Zoroastrianism is indeed a religion, but Marwari is not. 17. It is submitted that the ld. CIT(E) has completely ignored the words "otherwise without reference to caste, creed or religion" appearing in clause 6(ii) of the 2013 trus....
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....ndividuals) would be a charitable purpose. Applying this test, can it be said that the purposes set out in sub-clauses (4) and (5) of clause 3 and sub-clause (4) of clause 8 are charitable purposes. Are they purposes which are useful and beneficial to the Rana community or which promote the welfare of the Rana community? If they are, they would be objects of general public utility and would be covered by the statutory definition. So far as sub-clause (4) of clause 3 is concerned, there can be no doubt that it embodies an object of general public utility. It speaks of acts useful to the community and by its very terms, falls within the definition. When the object is to do acts beneficial to the community, it is plainly an object of general public utility." ii. The above decision of the Hon'ble Gujarat High Court was affirmed by the Hon'ble Supreme Court in CIT v. Ahmedabad Rana Caste Association [1983] 140 ITR 1 iii. CIT v. Dawoodi Bohara Jamat [2014] 364 ITR 31 (SC). The relevant extract of the decision is reproduced as under: - "49. In the present case, the objects of the respondent-trust are based on religious tenets under Quran according to religious f....
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....gistration u/s. 12AB of the assessee's modified objects. Gohilwad Vankar Samaj Seva Trust v. CIT [2025] 173 taxmann.com 263 (Ahmedabad - Trib.). Held that ".................... 7. In view of the findings recorded by the Tribunal, supported by decision of this Court in case of Commissioner of Income-tax (Exemptions) v. Bayath Kutchhi Dasha Oswal Jain Mahajan Trust (2017) 8 IRT-OL 493 (GUJ)/[2016] 74 taxmann.com 199/243 Taxman 60 (Gujarat) that the objects of the trust are not holly for the benefit of a particular religious community, but are largely charitable in character for general public at large and for the purpose of granting registration under 12A of the Act, the provision of section 13(1)(b) cannot be referred to. Section 13(1)(b) is to be applied while granting exemption to the trust. In view above finding, we do not find any question of law much less any substantial question of law arises for consideration." 5. The above judgments will hold good to a Trust created before 01-04-2021. Since the assessee has to first cross the hurdle of being eligible to exemption under section 11 by obtaining a certificate of registration under section....
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.... 11 which permits various other charitable purposes including general public utility. The decision of the Hon'ble Supreme Court in New Noble Education Society (supra) was with reference to exemption u/s. 10(23C) which applies only in case of trust engaged "solely" for educational purposes. The Ld. AR stated that for both the above reasons, reliance of the ld. CIT(E) on the decision of Supreme Court in para 4.2 is misplaced. 20. Assuming without admitting that training and development of employees of various companies is not regarded as incidental to educational activities or to mental health or other medical relief activities of the trust, there is no doubt or dispute that it is an activity in the nature of general public utility. In fact, the assessee has received letters of appreciation/ certificates/ testimonials from various government and semi government organizations for its impactful contribution to their employees/ personnel in the areas of training related to mental health awareness and allied matters. The Ld. AR prayed for allowing the appeal and direction should be made for granting the registration u/s 12A of the Act. 21. The Ld. DR stands in favour of the order o....
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....for a particular community or caste (students from the Marwari community). This is in violation of section 13(1)(b) of the Act and is also defined as specified violation as per clause (d) of Explanation to section 12AB(4) of the Act. In view of this, a show cause notice was issued to the applicant vide DIN & Notice No. ITBA/EXM/F/EXM43/2025 -26/1077008067(1) dated 13.06.2025 and explanations were called for regarding the above-mentioned violations. Additionally, information regarding proof of expenses, copy of bank statements etc were called for vide the same notice dated submissionon20.06.2025 on 13.06.2025 in response, the applicant made subr TAX DEPA 25.06.2025. 3.1. The submission made by the applicant Trust is carefully perused. The relevant portion of applicant's reply dated 20.06.2025 with respect to violation of section 11 of the Act is reproduced in summarized as below: "..................... 2.1.2 At the outset, the Assessee humbly states that it carries on various education programmes through its verticals / units as mentioned above. The said education programmes are carried in India. As such, the charitable activities are confined....
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....on. 4.2 Further, the object7(II)(A)(k) and 7(II)(A)(I) also include objectives of- i) training and development of employees of various companies, Trusts, Societies and other institutions and ii) developmental programs, workshops, seminars and webinars for the benefit of companies, organizations. Now, the training and development of employees of companies or other institutions and development programs for the benefit of companies cannot be categorized as Education in Scholastic sense. In fact, the Hon'ble Supreme Court in the case of Sole Trustee Lok Shikshana Trust, reported in 101 ITR 234 has clearly laid down that the scope of education within the meaning of section 2(15) is confined to formal education only, and does not extend to any wider connotation. The relevant findings of Hon'ble Supreme Court are as under 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 normal schooling. 4.2.1 Further, the Hon....
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....idered the rival submissions, the paper book filed, and the impugned order of the Ld. CIT(E). The rejection of registration is due to modification of object of the trust deed in object clause 7(II)(A)(k), 7(II)(A)(I) and 7(iii). The Ld. CIT(E) has taken this as gross violation of section 11 & 13 of the Act in result the application for registration is rejected. Here, the following findings emerge: On Expenditure Outside India: 22.1. The assessee trust is imparting Cambridge and IB curriculum in India, and the foreign remittances are essentially for exam fees, subscriptions, and training of educators. all for the purpose of imparting education within India. Reliance placed by the Ld. CIT(E) on Section 11(1)(c) of the Act is misplaced, since the assessee claims exemption u/s 11(1)(a) of the Act. The Ld. DR specifically relied on the fact that the assessee paid foreign remittance Rs. 6.5 crore to university outside India which gross violation of the Section 11 of the Act. We note that the assessee promotes advancement of educational institutional activities in all its branches such as kindergarten, primary, secondary and high school and colleges, both of Indian and international....