2017 (3) TMI 1378 - AT - Income Tax

Registration u/s 12AA rejected - activity of the trust are not charitable nature, as it is running technical course - Held that - One of the object of the assessee s trust is that to establishment of training and schooling development centre and institutions for professional education and training. As per the assessee it has been providing vocational courses which cannot be equated with any coaching institute. The assessee is also imparting professional courses. We notice that, the assessee has also other objectives as per the trust deed. Therefore, after considering the totality of the facts and in the light of the decision of the Co-ordinate Bench rendered in the case of Additional Director of Income Tax(E) vs. Samudra Institute of Maritime Studies Trust 2014 (6) TMI 359 - ITAT MUMBAI where of the view that CIT should reconsidered application of the assessee for registration after considering the case laws as relied by the assessee. In view of the above discussion the application of the asseessee is restored to the file of the ld. CIT for decision afresh. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Rejection of registration u/s 12AA of the Income Tax Act, 1961.
2. Determination of charitable nature of trust activities.

Analysis:
1. The appeal was against the rejection of registration u/s 12AA. The assessee contended that the assessment order was bad in law. The CIT(E) rejected the application stating that the trust's activities were not charitable as they involved running technical courses. The assessee argued that the CIT did not appreciate the facts correctly and cited relevant case laws to support their claim, including a judgment from the Delhi High Court. The Departmental Representative opposed, emphasizing that the trust's activities did not qualify as charitable due to the technical nature of the courses provided.

2. The rejection was based on the trust's income from vocational courses not being considered as "education" within the meaning of section 2(15) of the Act. The CIT(E) referred to a Supreme Court judgment highlighting that education connotes systematic instruction given through normal schooling. The trust's activities were deemed non-charitable as they focused on technical training rather than traditional education. The assessee relied on the Delhi High Court judgment, arguing that coaching centers running for shorter periods with profit motives do not meet the criteria of educational institutions. The Tribunal upheld the CIT(A)'s order from a similar case, emphasizing that as long as the trust imparts education as per its objectives, denial of exemption u/s 11 is unwarranted. The trust's provision of vocational courses was considered distinct from mere coaching institutes.

In conclusion, the Tribunal allowed the appeal for statistical purposes and directed the CIT to reconsider the application for registration, taking into account the case laws cited by the assessee. The judgment highlighted the distinction between systematic education provided through normal schooling and vocational training, emphasizing the need for educational activities to align with the definition of "education" under the Income Tax Act.