2016 (10) TMI 593 - AT - Income Tax

Grant of exemption u/s 10(23C)(vi) - eligibility of objects - non educational purposes - Held that - In the present case, the objections of the revenue that clause-D & G of the objects clause are not for educational purposes could not be rebutted by the assessee to the satisfaction of the department or to our satisfaction. We find force in the objections of the ld. CCIT as per which clauses D & G of the objects of the assessee society are not in respect of educational purposes because the same amounts to rendering consultancy services and hence, we find no reason to interfere with the order of the ld. CCIT declining grant of exemption u/s 10(23C)(vi) - Decided against assessee.

Summary

Issues:
Appeal against order under section 10(23C)(vi) of the IT Act, 1961.

Detailed Analysis:

1. Grounds Raised by the Assessee:
The assessee raised several grounds challenging the order of the ld. CCIT, including the denial of exemption under section 10(23C)(vi) of the Act. The appellant argued that the activities carried out were towards educational purposes for banking staff, fulfilling conditions for exemption. The appellant contended that the order was opposed to law and principles of natural justice.

2. Contentions of the Parties:
The ld. AR of the assessee argued that the objects in question were for educational purposes, citing judicial pronouncements to support the claim. On the other hand, the ld. DR of the revenue supported the order of the ld. CCIT, emphasizing the distinction between registration under section 12A and exemption under section 10(23C)(vi).

3. Analysis of CCIT's Objections:
The objections raised by the ld. CCIT focused on specific clauses of the society's objects, particularly clauses D and G, related to assisting banking institutions and providing consultancy services. The CCIT argued that these activities did not align with educational purposes, thus disqualifying the society from exemption under section 10(23C)(vi).

4. Evaluation of Judicial Precedents:
The Tribunal examined the applicability of cited judgments by the ld. AR of the assessee. The judgments included cases where the courts considered whether the institutions existed solely for educational purposes. However, the Tribunal found that the facts of the present case did not align with the circumstances of the cited judgments, as the objectionable activities were not rebutted satisfactorily.

5. Final Decision and Dismissal of Appeal:
After thorough consideration of the arguments and relevant legal provisions, the Tribunal upheld the objections raised by the ld. CCIT. The Tribunal concluded that the consultancy services provided by the society did not qualify as educational activities, leading to the dismissal of the appeal filed by the assessee.

In summary, the Tribunal's decision focused on the specific activities of the society in question, determining that certain services provided were not in line with educational purposes as required for exemption under section 10(23C)(vi) of the IT Act, 1961. The Tribunal's analysis of the objections, judicial precedents, and final decision highlighted the importance of aligning organizational activities with the statutory requirements for tax exemptions.