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TMI Blog1993 (3) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... nd scope of industrial relations inIndiatoday on the basis of research and the perceptions of recognised trade dealers". It transpired that copies of the aforesaid Journal were sold to the subscribing members. On the basis of the aforesaid facts, it was claimed before the ITO that the assessee was an "educational institution" existing solely for educational purposes and not for purposes of profit and hence entitled to exemption under section 10(22). On being asked to justify the aforesaid claim "in view of the regular business activity carried on by the assessee-trust, i.e., running a Journal called ' Social Action ' ", the assessee stated that the activity of the trust was solely educational and brought out in the form of articles by eminent educationists in its publication, viz., "Social Action". It was explained that there were 8 trustees, who were educationists and no remuneration was paid to them. As regards the persons contributing Articles to the Journal, it was pointed out that they were paid nominal amounts of Rs. 50 to Rs. 100 as honorarium and the topics were connected with education and sociology which was a part of the curriculum of education in various universities. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 118 ITR 235(Mad.). 7. On the facts and circumstances of the case and with reference to the aforesaid decisions, the assessee also argued that section 11(4A) was not attracted since the income primarily related to the sale of Journal and which was applied for the sole purpose of education. 8. The DC (Appeals) accepted the view point canvassed on behalf of the assessee and opined that exemption under section 10(22) was available. The relevant observations from his order for the assessment year 1985-86 may be extracted as under :--- " I have carefully considered the submissions. The balance surplus is Rs. 42,549 in the computation of ITO in assessment order. The assessee has published quarterly journals as well as book review which are sent to subscribers who are educational institutions. The object of the society is as stated earlier quoted by the ITO in his order by the publication of this journal, articles of interest or action for universities, research institutions, Government organisations and other academic bodies. This clearly proves that the object is to educate and these institutions are definitely concerned with education. Accordingly, I agree for the claim and direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed reliance on the following decisions:----- (a) Secondary Board of Education's case ; (b) Aditanar Educational Institution's case ; (c) Ecumenical Christian Centre v. CIT [1983] 139 ITR 226 (Kar.); (d)GujaratStateCo-operativeUnionv. CIT [1992] 195 ITR 279 (Guj.); and (e) CIT v. Bimetal Bearings Ltd. [1985] 152 ITR 85 (Mad.). 12. In his short reply, the Learned Departmental Representative stated that the various decisions relied upon by the learned counsel for the assessee were distinguishable since in all those cases, the main objects of the assessees were to run educational institutions and education was, in fact, the primary motive and the activity of printing Journals etc., was only a subsidiary activity related thereto. He concluded his reply by making an impassioned plea for the restoration of the orders passed by the ITO. 13. The learned counsel for the respondent at this stage stated, without prejudice to his main submissions vis-a-vis the exemption under section 10(22) that in case the assessee were to fail on that score then the matter be examined in the light of exemption under section 11, that being an issue raised before the first appellate authority, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t are educational in nature within the meaning of section 10(22). The only basis for raising the aforesaid plea is that the journal/journals printed by it and which are being subscribed to by universities, colleges, schools etc., fall within the category of 'education' although the same is not imparted through the medium of a class room. We are afraid, we cannot subscribe to the aforesaid proposition canvassed on behalf of the assessee. 17. We first of all take up for consideration various decisions relied upon by the assessee's counsel in support of his arguments. In the case of Secondary Board of Education, the matter pertained to the Secondary Board of Education, which was constituted under an Act and the multifarious activities of which pertained entirely to the field of education, since it was required to conduct examinations, grant Diplomas and Certificates, to regulate the teachings in various educational institutions as also to prescribe and recommend text books etc. At pages 411 to 413 of the decision, the objects of the Board have been stated and the same run from the first alphabet to the last viz., (a) to (z. 1). These include the activity of printing and publication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the respondent, but as the facts of each of the cases show, they do not advance the assessee's case, but go to a large extent to support that of the revenue. In all the aforesaid decisions, the primary motive was squarely in the field of education and educational institutions were being run and in which was imparted class room education. This important and relevant fact is absent in the assessee's case. 23. We now come to the decisions relied by the learned Departmental Representative in support of the Revenue's case. At the outset, we would refer to the decision of the Hon'ble Supreme Court in the case of Sole Trustee, Loka Shikshana Trust. The following observations of their lordships are reproduced :----- " The word 'deduction' in section 2(15) of the Income-tax Act, 1961 connotes the process of training and developing the knowledge, skill, mind and character of students by normal schooling and has not been used in the wide and extensive sense according to which every acquisition of further knowledge constitutes education. " " The sense in which the word 'education' has been used in section 2(15) in the systematic instruction, schooling or training given to the yo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paper ceased to function or for any other reason, the surplus of the income could not be applied to the object mentioned above, the same should be applied for the maintenance of a college which had been established out of the funds of another trust created by the same testator. There was surplus income in the hands of the trustees after defraying the expenses of the press and newspaper. Question arose as to whether that income was liable to be assessed in the hands of the trustees. The Judicial Committee held that the object of the settlor was to supply the province of the Punjab with an organ of educated public opinion and this was prima facie an object of general public utility. Their lordships unequivocally express the view that they were not prepared to hold that the property referred to in the various paragraphs of the will was held for the purpose of 'education' in the sense that word was used in section 4 of the Indian Income-tax Act of 1922. The above decision of the Judicial Committee applies directly to the present case and, in view of this decision, we would hold that the object of the appellant trust was the advancement of any other object of general public utility. " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1961. We accept the submissions made on behalf of the learned Departmental Representative and relying upon the various decisions cited by both the parties, we set aside the orders passed by the DC (Appeals) holding in the process that section 10(22) benefit is not available since the assessee during the assessment years under appeal is engaged only in the activity of printing a journal/journals. There is nothing on record to show that it is running an educational institution or it is imparting education through the medium of a class-room. To quote an example, every seller of text books, which are used by school and college students, would stake its claim under section 10(22) on the ground that it is imparting education although not through the medium of a teaching institution. To accept such an argument would be a fallacy. 28. The learned counsel, however, advanced an alternative argument in the course of the hearing of these appeals and which is quite interconnected with the issue which is already before us. He has invited our attention to the fact that in the course of the proceedings before the tax authorities, the assessee's claim was under two separate sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made towards the corpus by Alfred De Souza and which formed a part of the balance in S.B. Account No. 6586 with American Express. A copy of the balance-sheet as on31st August, 1984was also flied drawing attention to the liabilities side, where, under the head "Corpus Fund and Capital Fund", a sum of Rs. 65,000 and Rs. 18,112 had been shown, the total coming to Rs. 83,112. 32. The DC (Appeals) taking note of the aforesaid facts, took the view that the addition of Rs. 23,113 was not warranted. He proceeded to delete the same. 33. We have heard both the parties at some length in respect of the specific ground raised in the Revenue's appeal. The Departmental Representative has placed reliance on the order of the ITO contending in the process that since the assessee had filed a certificate from the donor vis-a-vis a sum of Rs. 60,000 only there was no basis for the DC (A) to hold that the further amount of Rs. 23,113 also represented "Corpus Donation". According to him, the intention of the donor was to be expressed in specific terms and it was only under these circumstances that the entire amount vis-a-vis Rs. 83,113 could be treated as exempt from tax. The learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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