2015 (9) TMI 947 - AT - Income Tax

Denial of deduction u/s.80E - AO denied the deduction on the ground that the same is allowably only in case of Indian Educational Institutes which are authorised in India and naturally not for Abroad or Foreign education institutes - Held that - We find merit in the submission of assessee that there is no such stipulation u/s.80E of the I.T. Act that the education should be in India only. Had there been such an intention by the legislature it would have been definitely and specifically mentioned as had been mentioned in section 11 of the I.T. Act which provides that any income or property held for charitable purposes is exempt from tax u/s.11(1)(a) only to the extent it is applied in India. Therefore, if the legislature wanted education in India itself for availing of the deduction, the legislature would have specifically stated so in the section itself. Since the son of the assessee is pursuing his MS Electrical Engineering in Washington, United States of America after completing his Secondary Education examination or its equivalent and since the interest expenditure is not in dispute, therefore, we do not find any reason as to why the assessee shall not get the benefit of deduction u/s.80E of the I.T. Act. In this view of the matter, we set aside the order of the CIT(A) and direct the Assessing Officer to allow the deduction u/s.80E of the I.T. Act. - Decided in favour of assessee.

Summary

Issues:
Denial of deduction under section 80E of the Income Tax Act for higher education pursued abroad.

Analysis:
The appeal pertains to the denial of deduction of Rs. 73,125 under section 80E of the Income Tax Act for higher education pursued abroad by the assessee's son. The Assessing Officer disallowed the deduction as the education was not pursued in Indian Educational Institutes duly authorized in India. The CIT(A) upheld this disallowance, citing the lack of evidence that the university where the son was studying was approved by the Central Government or any other authorized authority, and the absence of details about the higher education pursued. The CIT(A) referred to section 80E(3)(c) which defines higher education as a course pursued from a recognized institution authorized by the government. The assessee contended that there is no requirement in the Act for education to be in India only, and presented certificates from the university in the USA. The Tribunal noted that the son was pursuing MS Electrical Engineering in the USA after completing his secondary education, and since the interest expenditure was not in dispute, allowed the deduction under section 80E, emphasizing that the Act does not specify education to be limited to India only.

The Tribunal observed that the Assessing Officer had acknowledged that the son was pursuing higher education in the USA, and the certificates provided by the assessee confirmed the nature of the course and its completion after secondary education. The Tribunal emphasized that the Act does not impose a condition that higher education must be pursued only in India, contrasting it with other sections like section 11 which specify conditions related to India. Since the son was pursuing education in the USA after completing secondary education, the Tribunal found no reason to deny the deduction under section 80E. The Tribunal set aside the CIT(A)'s order and directed the Assessing Officer to allow the deduction under section 80E. The appeal filed by the assessee was allowed, granting the deduction for higher education pursued abroad.

In conclusion, the Tribunal's decision focused on the interpretation of section 80E of the Income Tax Act regarding the deduction for higher education expenses. The Tribunal emphasized that the Act does not restrict higher education to be pursued only in India, and since the son was pursuing education in the USA after completing secondary education, the deduction under section 80E was allowed. The decision highlights the importance of fulfilling the statutory requirements for deductions and the need for proper evidence to support claims under the Income Tax Act.