1993 (12) TMI 50 - HC - Income Tax

Summary

Issues Involved:
1. Whether the petitioner's institution qualifies as a "charitable institution" u/s 12A of the Income-tax Act, 1961.
2. Whether the activities of the petitioner's institution fall within the definition of "education" as per section 2(15) of the Income-tax Act, 1961.

Summary:

Issue 1: Charitable Institution u/s 12A
The petitioner, a society registered under the Societies Registration Act, applied for registration as a "charitable institution" u/s 12A of the Income-tax Act, 1961. The respondent rejected the application, stating that the petitioner's activities included carrying on business and the object for the promotion of science was too vague. The petitioner argued that its activities were for the advancement of objects of general public utility and thus qualified for registration. The court noted that the amendment to section 12A removed the relevance of profit motive in determining charitable status. However, the court concluded that the petitioner's institution, primarily a coaching center, did not meet the criteria for a charitable institution as it did not engage in normal schooling or systematic instruction.

Issue 2: Definition of Education u/s 2(15)
The court examined whether the petitioner's activities fell within the definition of "education" u/s 2(15) of the Income-tax Act, 1961. The court referred to the Supreme Court's interpretation in Sole Trustee, Loka Shikshana Trust v. CIT, which defined education as systematic instruction, schooling, or training. The court found that the petitioner's institution, which focused on coaching students for specific examinations, did not provide normal schooling or systematic instruction. Therefore, it did not qualify as an educational institution under section 2(15). The court emphasized that a coaching institute does not equate to an institution where normal schooling is conducted.

Conclusion:
The court dismissed the application, ruling that the petitioner's institution did not qualify as a "charitable institution" u/s 12A of the Income-tax Act, 1961, and its activities did not fall within the definition of "education" u/s 2(15) of the Act. The court held that running a private coaching institute for training students to appear in specified examinations did not meet the criteria for exemption under the Act.