2026 (5) TMI 1561

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....hat Assessee Trust filed its return of income on 09.10.2018 disclosing NIL income after claiming deduction u/s. 11. The case of the Assessee was selected for scrutiny on limited issue that the Assessee has accumulated substantial surplus u/s. 11(2) vis-a-vis gross receipts. The notice u/s. 143(2) of the Act was issued. The Assessee is already granted registration u/s. 12AA, by the Commissioner of Income Tax (Exemption), Karnataka on 08.07.1987. 3. The object of the Assessee as per trust deed was printing and publication of books of educative value for the benefit of people and rendering educational activities. The Ld. Assessing Officer was of the view that the printing and publication of books, the Assessee was having total receipt of Rs. 8,40,28,752/- and has arisen surplus of Rs. 1,49,15,806/-. Thus, according to the Ld. Assessing officer, the activity carried out is falling in the category of "advancement of the object of general public utility". Therefore, the notice was issued to the Assessee to show cause as to why the exemption claimed by the Assessee u/s. 11 of the Act should not be disallowed. The main reason for issue of show cause notice was that the receipts of the A....

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....without following the proper provisions under the faceless assessment scheme was also dismissed. Accordingly, the Appeal was dismissed. 7. The Ld. Authorized Representative submitted that the case of the Assessee was selected for a limited scrutiny as stated at para no. 1 of the Assessment Order for verification of substantial surplus u/s. 11(2) vis-a-vis gross receipts. The Ld. Assessing Officer has exceeded his jurisdiction by invoking other issues involved in the Appeal which were not part of limited scrutiny. 8. He further submitted that in this case the Ld. Assessing Officer has disputed that Assessee is not eligible for exemption u/s. 11(2) of the Act holding that Assessee is engaged in the object of any other general public utility. In fact, according to him, the Assessee is engaged in educational activity. On identical facts and circumstances, the Ld. Assessing Officer for Assessment Year 2016-17, in 143(3) proceedings as per order dated 13.12.2018 has allowed the Assessee the benefit of section 11 and 12 of the Act wherein the Assessee's gross receipt was Rs. 5,87,62,034/-. Further for Assessment Year 2022-23, the Ld. Assessing Officer in 143(3) r.w.s. 144B of the In....

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...., World Institution Development Programme v. ITO, where it was held that the development of study material constitutes an educational activity and qualifies for exemption under sections 11 and 12 of the Act. He also pointed out that, in that case, the trust had earned course material fees of Rs. 4.11 crores. Accordingly, he argued that the Assessee's claim for exemption under section 11(2) cannot be denied. He further relied on the decisions of the Hon'ble Delhi High Court in DIT v. Delhi Public School and CIT v. SPIC MACAY, which hold that mere receipt of consideration does not by itself mean that the Assessee is engaged in trade or business. He therefore contended that the Assessee's object is education, not advancement of general public utility, and that, if the activity is held to be educational, the proviso to section 2(15) has no application. 11. He also submitted that facts of this case are identical to the faces of the case decided by the Honourable Delhi high court in case of Delhi Text book Bureau ITA 807/2015 dt 03.05.2017Delhi Bureau of Text Books vs. Director of Income-tax (E) [2017] 81 taxmann.com 412 (Delhi)/[2017] 248 Taxman 272 (Delhi)/[2017] 394 ITR 387 (Delhi)....

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....k of the public administration. 14. Further honourable Delhi High court in Delhi Bureau of Text Books vs. Director of Income-tax (E) [2017] 81 taxmann.com 412 (Delhi)/[2017] 248 Taxman 272 (Delhi)/[2017] 394 ITR 387 (Delhi)/[2018] 300 CTR 195 (Delhi)[03-05-2017] has held that The Court first considers the question of the interpretation placed on the word education occurring in section 2(15). The exclusive activity of the assessee is the publication and printing of textbooks and their distribution to Government schools and schools of the MCD, NDMC, etc. This activity has continued uninterruptedly since the time of its inception. The fact that the assessee is a non-profit organization is not in dispute. Its essential activities are administered by the Board of Directors comprising of officers of the Government of India as well as Directorate of Education, GNCTD, in its ex officio capacity. The textbooks are provided by the assessee to the students at subsidized rates. Even the textbooks, reading materials and school bags are being distributed free to deserving students. The essential activity of the assessee is connected with 'education' and nothing else.The preparation an....