TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 993
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....0-11 is the challenge to the disallowance made by the Assessing Officer (AO) on the ground that payments made to the Institute of Chartered Shipbrokers (ICS), London, for examination fees, license fees and exemption fees do not constitute an "application of income in India" within the meaning of Section 11 of the Income Tax Act, 1961 (hereinafter "the Act"). 4. The issues in the appeals of assessee for AYs 2012-13 and 2013-14 are with respect to the disallowance of claim of foreign exchange loss incurred on transactions integral to the educational activities of the trust, claim for carry forward under Explanation (2) to Section 11(1) and challenge to the disallowance made by the Assessing Officer (AO) on the ground that payments made to the Institute of Chartered Shipbrokers (ICS), London, do not constitute an "application of income in India" within the meaning of Section 11 of the Income Tax Act, 1961 (hereinafter "the Act"). 5. The brief facts of the case for ITA No.1927/Chny/2025 for AY 2007-08 is that the assessee is registered as a public charitable trust under section 12AA of the Income-tax Act,1961. Registration under section 12AA was granted to the assessee in terms o....
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.... to the said examination, a notice u/s. 148 was issued to the assessee on 06.06.2011. The AO in the assessment order disallowed Rs. 25,21,405/- remitted to ICS, London, being DLC registration fee & exam exemption fees payments as the same does not qualify as application of income in India u/s. 11(1)(a) of the Act. On further appeal to CIT(A), who confirmed the order of the AO. Now assessee is in appeal before us. 6. At the outset, the Ld. Authorized Representative (AR) of the assessee Sh. Y. Sridhar, FCA contended that in similar situation the Hon'ble Karnataka High Court has decided the controversy in favour of the assessee. He has referred the Judgment of the Hon'ble Karnataka High Court in the case of CIT(E), Bangalore Vs. Ohio University Christ College [2018] 408 ITR 352/[2018] 99 taxmann.com 377. He further contended that the order of the coordinate Bench of the Tribunal in assessee's own has held that the assessee continues to enjoy the registration u/s. 12AA, as if there was no interruption. He has filed the order of the coordinate Bench in assessee's own case titled 'The Institute of Chartered Shipbrokers, Madras Branch Vs. The Director of Income Tax (Exemptions), Che....
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....lification achieved is the intangible benefit and final outcome of the process, which serves the educational objects of the charitable trust. The coordinate bench of Tribunal referred supra has already held that the activities of the Assessee Society qualify as "education" under Section 2(15). The matter has only been taken to the High Court at the instance of the Department, and until reversed, the Tribunal's ruling stands binding. Section 11(1)(a) merely requires that the income is applied to charitable or religious purposes in India. In the present case, the expenditure is in furtherance of education (a charitable object) and is made for the benefit of Indian students and results in both tangible (books) and intangible (qualification, skill enhancement) benefits within India. Therefore, the payments clearly qualify as application of income in India. Hence, the ld.AR in light of the facts, circumstances, and legal position discussed above, submitted that the Assessing Officer has erred in disallowing the legitimate application of income by the Assessee Society. The payments made to ICS, London are in conformity with the objectives of the Society, result in tangible and intangible....
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....s of the Chartered Accountants Study Circle and, therefore, the judgment of the jurisdictional High Court squarely applies to the assessee's case. Therefore, the order of the Director of Income-tax(Exemptions) cancelling the registration, passed under section 12AA(3) needs to be quashed 5. Shri Shji P Jacob, the learned commissioner of Income-tax appearing for the Revenue, on the other hand, contended that the assessee is rendering professional and other commercial services and is engaged only in coaching the students preparing for ICS examination and it is not carrying on any charitable activities in the nature of educational activities. The learned Commissioner of Income-tax argued that the assessee Institute is sharing the fees collected from the students with its mother Institute in London and at every stage the income received by the assessee Institute needs to be shared with its counterpart in London. Referring to the Memorandum of association of the assessee trust, the learned Commissioner of Income-tax contended that in the event of dissolution of the assessee institution, all the assets will bestow upon the London Institute and therefore it is necessary to see tha....
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....g or tuition. The Institute at London is an Institute established by a Royal Charter and recognized world- wide as the nodal agency of design, improving and controlling the profession of ship-broking. Ship-broking is recognised world over as the only profession engaged in dealing with all aspects of shipping industry. The examinations conducted by the Institute to enable the registered students to enroll as members of the Institute require continuous study for a period of three to four years. What is imparted by the assessee Institute in India is professional education like chartered accountancy, law, architecture, etc. The syllabus prescribed for the examination covers almost all areas of shipping industry including maritime laws. It includes management of logistics of shipping industry. It is not that the members who qualify the examination are just acting as brokers for good/ships. The members who qualify the examinations are working in different fields of shipping industry including port-trust. Therefore, it is not possible to hold a view that the assessee is running a coaching centre for a particular examination. On the other hand, the assessee is an Institute imparting profes....
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.... present case as well. 12. In the facts and circumstances of the case, we find that the order passed by the Director of Income-tax (Exemptions) at Chennai under section 12AA(3) of the Income-tax Act, 1961 is not sustainable in law. Accordingly, the said order is set aside. The assessee continues to enjoy the registration under section 12AA, as if there was no interruption. 13. In result, this appeal filed by the assessee is allowed." 9. We have also gone through the Judgment of the Hon'ble Karnataka High Court in the case of CIT(E), Bangalore Vs. Ohio University Christ College [2018] 408 ITR 352/[2018] 99 taxmann.com 377. 10. This appeal has been preferred by the assessee Society against the order of the Assessing Officer (AO) and Ld. CIT(A), wherein disallowance was made in respect of payments remitted to the Institute of Chartered Shipbrokers (ICS), London, towards purchase of books, examination and exemption fees, and Distance Learning Centre Licence Fee. During the course of hearing, the ld. Authorised Representative (AR) submitted that the books were physically imported into India for exclusive use by Indian students enrolled in shipping and lo....