2014 (6) TMI 359 - AT - Income Tax

Entitlement for exemption u/s 11 of the Act Imparting post-sea and pre-sea training Scope of term Charitable purpose u/s 2(15) of the Act Held that - Following Dy. DIT(E) -I(2), Mumbai Versus M/s. Samudra Institute of Maritime Studies Trust 2014 (6) TMI 350 - ITAT MUMBAI - the assessee is giving training in the area of Pre Sea and Post Sea to sea men - merely because the courses are not approved by the DG Shipping or merely because there is huge surplus in the non-approved courses than the approved courses cannot be a ground for denial of exemption u/s.11 as long as the Trust is imparting education as per the objects of the Trust there was no error in the order of the CIT(A) in allowing the exemption u/s 11 of the Act Decided against Revenue.

Summary

Issues:
1. Challenge to the action of the ld. CIT(A) in granting exemption u/s 11 of the Income Tax Act, 1961 to the assessee, a charitable trust.

Analysis:
The appeal by the Revenue against the order of the ld. CIT(A) challenged the assessee's entitlement to exemption u/s 11 of the Income Tax Act, 1961. The Revenue contended that the courses conducted by the assessee, which were not approved and recognized by the Directorate General of Shipping, were akin to private coaching classes conducted for profit rather than charitable purposes. The AO disallowed the exemption claimed by the assessee u/s 11 of the Act, assessing the total income at Rs.38,13,726. The ld. CIT(A), after considering submissions and a previous Tribunal decision, allowed the claim for exemption u/s 11, emphasizing that the Trust's activities were within the meaning of education as contemplated u/s 2(15) of the Act. The Revenue then appealed to the Tribunal.

The Tribunal noted that a previous decision upheld the ld. CIT(A)'s order allowing exemption u/s 11 for the assessee for AY 2007-08. The Tribunal referenced various decisions supporting the assessee's case, distinguishing them from cases where coaching institutions were not considered charitable. The Tribunal emphasized that as long as the Trust was imparting education as per its objects, the mere lack of approval by DG Shipping or higher profits from non-approved courses did not warrant denial of exemption u/s 11. Consequently, the Tribunal upheld the ld. CIT(A)'s order based on the similarity of issues and facts with the previous assessment year.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the ld. CIT(A)'s decision to grant exemption u/s 11 to the assessee. The Tribunal relied on previous decisions and the Trust's educational objectives to support its decision, emphasizing that the mere lack of approval for certain courses did not negate the charitable nature of the Trust's activities.