2021 (4) TMI 733 - AT - Income Tax

Exemption under Section 10(23C)(vi) denied - Appellant institution not solely for educational purposes - HELD THAT - As decided in own case 2016 (10) TMI 593 - ITAT BANGALORE Admittedly, the Tribunal in the earlier year for AY 2014-15 only relied on clause (d) (g) of the Memorandum of Association of the assessee college and overlooked clause (a) (b) of the Memorandum of Association. However, at this stage, we are not in a position to take a decision in favour of the assessee, since the decision of the Tribunal is not disturbed by any higher forum. However, in the interests of justice, it is appropriate to remit the issue in dispute to the file of the CIT(Exemptions) for appropriate decision, after the final judgment of the Hon ble High Court of Karnataka in the case of assessee for the AY 2014-15. With these observations, we remit the issue to the file of the CIT(Exemptions). Appeal by the assessee is allowed for statistical purposes

Summary

Issues:
- Exemption u/s.10(23C)(vi) of the Act denied by CIT(A)
- Eligibility of the appellant institution for exemption
- Interpretation of the word 'Education' under the Income-tax Act
- Consideration of previous Tribunal judgments
- Decision on remitting the issue to the file of the CIT(Exemptions)

Analysis:
- The appeals were filed against the common order of CIT(A) denying exemption u/s.10(23C)(vi) of the Act to the appellant. The appellant contended that the institution was solely for educational purposes, fulfilling all conditions required for exemption. The appellant argued that the Commissioner erred in not considering the various activities carried out by the appellant towards educational purposes of the banking staff. The Commissioner's decision was challenged based on the grounds that the appellant primarily existed for educational purposes, as evidenced by the Income and Expenditure Account of the Society for the relevant year. The appellant also cited previous Tribunal judgments and emphasized the broad meaning of the word 'Education' under the Income-tax Act, which was not specifically defined. The appellant urged that the Commissioner failed to grasp the true nature of the educational activities conducted by the society.

- The Tribunal noted that a similar issue had been considered in the appellant's previous case, where the Tribunal had denied exemption u/s. 10(23C)(vi) of the Act. The Tribunal in the earlier case had observed that the appellant's activities did not solely pertain to educational purposes and included consultancy services. However, the appellant argued that the activities were indeed educational and provided training to banking personnel. The appellant presented audited accounts to support their claim and referred to relevant case laws. The Tribunal, in this case, decided to remit the issue to the file of the CIT(Exemptions) for a fresh decision after considering the final judgment of the Hon'ble High Court in the appellant's case for the AY 2014-15. The Tribunal acknowledged that the issue needed further examination in light of the previous Tribunal's decision and the pending appeal before the High Court.

- The Tribunal, after hearing both parties, decided to remit the issue in dispute to the file of the A.O. for appropriate decision after considering the final judgment of the Hon'ble High Court in the appellant's case for the AY 2014-15. The Tribunal emphasized the need for a thorough review of the issue in light of the previous Tribunal's decision and the pending appeal before the High Court. The appeals filed by the assessee were partly allowed for statistical purposes, pending further review and decision by the CIT(Exemptions) based on the final judgment of the High Court.