TaxTMI 
TaxTMI 
2025 (10) TMI 1399
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....the activities of the Appellant were inherently educational in nature. The seminars and conferences conducted were aimed at disseminating knowledge on the latest advancements in medical treatment and served as Continuing Education Programmes (CEP) for professionals in the medical fraternity. 3. The CIT(A) failed to understand that the activities of the Appellant fall squarely within the scope of "education" as defined under Section 2(15) of the Act, which is an independent limb of the definition of "charitable purpose". However, the CIT(A) erroneously classified the Appellant's activities under "advancement of any other object of general public utility" only with the intent to attract the proviso to Section 2(15) of the Act, thereby unjustly denying the exemption otherwise available under Section 11 of the Act. 4. Without prejudice, even if the activities of the Appellant were to be considered as falling under the limb of "advancement of any other object of general public utility," the CIT(A) has erred in invoking the proviso to Section 2(15) of the Act by incorrectly stating that the fees collected by the Appellant exceeded 20% of the gross receipts. In fact,....
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....of the Act and the benefit of exemption under Section 11 of the Act be restored; c. The additions made to the income of the Appellant amounting to Rs. 61,15,273/- be deleted in full; and d. Any other relief deemed fit in the facts and circumstances of the case be granted. 3. The brief facts of the case emanating from the records are that the assessee is a public charitable trust established on 08.11.2002, registered u/s.12AA of the Act on 29.01.2003. The core object of the assessee is organising seminars, discussions, conferences, and workshops in the field of medicine, specifically neurology, for advancement of education and public awareness, as given in clause 22 of the Trust deed. During the impugned assessment year 2016-17 the assessee conducted the following three major conferences in furtherance of its objects: - Brain and Heart conference on 10-11 October 2015 - MDSICON 2016 on 8-10 January 2016 - International Congress on Child Neurology 22-24 January 2016. 4. The assessee filed its return of income for the A.Y. 2016-17 on 29.03.2017 declaring a gross receipts of Rs. 2,47,49,862/- and NIL income after claiming exemption u/s....
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....sition 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. (b) In the case of Commissioner of Income Tax Vs Oxford University Press 221 ITR 77 the Bombay High Court observed that the assessee was only operating a printing press and thereby engaged in the business activities. The assessee claimed that it was a part of Oxford University of UK and hence engaged in the activity of education and hence exempt us. 10(22). The plea was not favoured since the assessee themselves were not engaged in the activity of education. The income of the assessee was shared with the Oxford University in this case. The assessee claimed application for educational purposes. But the court viewed, "In our opinion, for exemption under section 10(22) of the Act, the University or the educational institution must exist as a University or an educational institution solely for educational purposes in India. In other words, in our opinion, the recipient of the income must have the character of a University or an educational institution in India. Its charac....
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....fore, found not only that there must exist an institution, but that it must be an, educational institution to impart education to students. It must be very close to normal schooling. 7.2 In view of the above, I hold that the activities of the institution cannot be called as "educational". In fact I apprehend whether the activities of the trust can be said charitable at all. It is apprehended that the institution is nothing but a facilitator for conducting conferences on commercial basis. At the most the activity will come under the category of advancement of object of general public utility. 8. In view of the above, I hold that the objects and activities are general public utility in nature and the assessee is receiving commercial receipts to provide service to a rarified set of Medical Practitioners. The total such fees is much more than the threshold limit of 20% of gross receipts for the asst. year 2016-17. Accordingly, the objects and activities of the assessee are no longer charitable in nature. Once the activities are not charitable the activities of the institution cannot be said genuinely charitable Once the object of the institution is no longer charitabl....
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....refully perused the 'Form 35', the grounds of appeal, the Statement of Facts, written submission as well as impugned assessment order. 5.2. Briefly stating the background of the case, the appellant is a public charitable trust (AOP) registered u/s 12AA. It had filed its Return of Income (Rol) for the A.Y. 2016-17 on 29.03.2017 declaring a gross receipts of Rs. 2,47,49,862/- and Nil income after claiming exemption u/s 11. The case was selected for scrutiny under CASS which was finalized with passage of an order u/s 143(3) on 27.12.2018. In such order taxable income of Rs. 61,15,237/- was determined. Aggrieved with such order, the appellant has filed this appeal where ten different grounds have been preferred. 5.3. The appellant has assailed the impugned assessment order on different counts. During the year the appellant has shown following receipts 'Delegate Fees' Rs. 32,28,663/-; 'Sponsorship and Advertisements Rs. 2,20,99,227/-. The appellant has explained that Rs. 1,88,51,537/- out of the receipts were utilized for holding of the conferences on different medical issues. The Appellant also claims donations amounting to Rs. 55,00,000/- to various r....
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.... object of general public utility'. 5.7. From the prism of the proviso to section 2(15), any activity otherwise includible under the umbrella of advancement of any other object of general public utility' would not qualify for inclusion if it is rendered for a cess or a fee etc. irrespective of nature of the use or application or retention of receipts unless such receipts is below the 20% of the total receipts or the eligible activity has been undertaken in the course of actual carrying out of such advancement. 5.8. In the present case, though the clause 22 of objects as given in the trust deed state that conduct of "..seminars, discussions, conferences, workshops and other such activities in all fields of medicine and related matters" would be done by it, the appellant has received fees of Rs. 32,28,883/- from the doctors and pharma companies. Besides such fees the appellant has received 'sponsorships and advertisement of Rs. 2,20,99,227/- from 'outside the organization' which mainly include pharma companies. The AO has also pointed out that the receipt of 'fees' is more than 20% of the gross receipts of the year and also that the parti....
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....e field of neurology. 3. All three conferences featured leading medical professionals and renowned international and national speakers in the field of neurology. Their participation ensured a high academic and professional standard, reinforcing the nature of the events as educational platforms, not commercial exhibitions. This fact is evident in the brochures submitted before the authorities, herewith attached as Annexure 3 (pages 51 to 66) 4. It is evident from the brochures annexed that the conferences are not limited to any specific audience and is open for circulation to the entire medical community. 5. The doctors who come from overseas also visit hospitals in Chennai and discuss live (medical) cases with Indian doctors. Thus, the conferences not only act as a platform for learning but also an event that show cases the advancement of the Indian hospitals/Indian doctors have done in the field of medicine to their overseas doctors which positively projects the perception/s about Indian doctors and Indian hospitals. Due to the discussions on the technical content of the conferences, and interactions that happen in the conferences, the acceptance by the ....
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....he activity of holding conferences was motivated by its educational purpose and that profit was never a motive or the driving force. 10. The Act visualized three kinds of charitable purposes: (a) medical relief; (b) education, and (c) relief for the poor "per se purposes" and by the very nature of our activities, we come under "per se" purposes as Section 2(15) of the Act covers "education" as a distinct charitable purpose. Medical conferences, awareness programs, and dissemination of scientific knowledge through professional events conducted to achieve the objects of the trust have been recognized by various courts as "education". 11. As the primary purpose of the trust is education, it will constitute charitable purpose even if it incidentally involves collection of surplus funds. This has been upheld in various judgments cited below. Such surplus funds are utilised to meet the running costs of the trust and are necessary for the survival and functioning of the trust. 12. The reasoning of the CIT(A) that because the beneficiaries are "a rarified set of medical practitioners, the charitable object is untenable, as the education of professionals is a char....
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....ducts conferences attended by hundreds of medical professionals, delivering training and updates in cutting-edge medical science. These are core educational activities, not passive support. Hence, this decision is also factually inapplicable. 17. The Appellant places reliance on the following cases: a. The decision of the Supreme Court of India in Queen's Educational Society v Commissioner of Income Tax (2015) 372 ITR 699 wherein it was held in Paragraph 19 that "It is clear that when a surplus is ploughed back for educational purposes the educational institution exists solely for educational purposes and not for purposes of profit." (from pages 18 to 20). Thus, the mere generation of surplus shall not result in the main object of the trust being nullified and does not mean there is a profit motive associated to its functioning. (copies of the judgment enclosed in Annexure 4 (pages 67 to 92) b. The decision of the High Court of Rajasthan in CIT (Exemption), Jaipur v. Anesthesia Society [2019] 260 Taxman 375 where it was held in Paragraph 6 that the assessee society has been constituted to bring the doctors dealing in Anesthesia specialty entitled to b....
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....to inculcate safety measures would also be bracketed in the league of 'educational activities' when tested in the light of the decision of the Hon'ble Gujarat High Court in the case of Ahmedabad Management Association." (from pages 3 to 5). Thus, conducting conferences and seminars for advancement of education and public awareness in the field of neurology shall also constitute educational activities. (copies of the judgment enclosed in Annexure 7 (pages (15 to 122). 18. It is submitted that the general public utility limb is a residual category and does not absorb activities that are exclusively educational. When activities can clearly be classified as educational, there is no need to invoke the general public utility clause. Since all receipts and expenditures are towards educational programmes, the activity falls fully within the "education" head. Thus the CIT(A)'s application of the "general public utility limb is erroneous both in law and on facts. The Appellant's activities fall squarely under "education", making them fully charitable and outside the ambit of the Section 2(15) proviso." 9. Further, the ld.AR submitted that the assessee has been....
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....ion from its inception. The basic activity of the trust is conducting seminars in the field neuro medicine for advancement of knowledge. Similarly, during the impugned assessment year also the assessee had conducted 3 seminars for doctors in the field of neurology at Chennai by having a gross receipt of Rs. 2,47,49,862/- and claimed an exemption u/s.11 of the Act. 15. The core question before us is whether such activities constitute "education" within the meaning of section 2(15) of the Act, or whether they are commercial activities falling within the mischief of the proviso. 16. The expression "education" in section 2(15) has been interpreted liberally by various judicial authorities to include not merely formal schooling but also systematic dissemination of knowledge through seminars, workshops, and continuing education programmes. 17. The Hon'ble Gujarat High Court in DIT (Exemption) v. Ahmedabad Management Association (366 ITR 85) held that conducting management development programmes, public talks, and conferences amounts to educational activity. Similarly, in CIT (Exemption) v. Anesthesia Society (260 Taxman 375), the Rajasthan High Court held that organising medical....