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TMI Blog2004 (1) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... , rehabilitation s healthcare services, development of formal and informal health delivery and education methods. (b) To provide research facilities for carrying out basic and applied researches in connection with bio-medical systems and disciplines of medicines. (c) To establish, operate, promote, run, maintain, manage institutions engaged in providing medical, dental and para-medical education. Advancement of research pertaining to medical and health technology. To establish collaboration with other national and international institutions. To arrange exchange of scientist, research workers, consultants and experts in various fields of medicine with other countries. (d) To conduct experiments and to undertake and carry on research experiments and tests related to the concerned research disciplines. (e) To establish, maintain, provide and conduct or assist research laboratories and experimental institutions for scientific research. (f) To give advice or publish and as otherwise, promote utilisation of research results in the field of medical sciences. (g) To promote, develop and improve scientific exchange of knowledge as well as technical co-operation between research ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laneous charges; Rs. 34,000 For establishment of a Centre for Russian language and preparatory courses inIndia. 6. It was further envisaged that the Federal Government of theUSSRwould depute the teachers for teaching and training of the students in the proposed Centre for Russian language and preparatory courses. Accordingly, the assessee-trust startedschoolofRussianlanguage and preparatory studies in rental premises at 12A, Bharati Colony, Vikas Marg, New Delhi-92, and employed teachers for Russian language and other subjects for the preparatory courses, i.e., physics, chemistry, botany, geology and mathematics. Efforts were also made to acquire a piece of land for construction of permanent building for this institution. In February, 1990, the authority of the Federal Government of the then USSR informed that it would not be possible to exempt the students for their one year study in Russian language and preparatory course in USSR, and requested that the money can be utilised for sending various equipments including teaching aids, etc. to various institutions where sponsored Indian institution students were going to study. Accordingly, the assessee-trust pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 lakhs 2. 6-7-1993 Integrated Education Development Organisation 25 lakhs 3. 9-9-1993 Dalmia Educational Trust 5 lakhs 4. 9-4-1994 Integrated Education Development 5 lakhs 5. 22-4-1994 -do- 15 lakhs 8. All these organisations are duly registered and are engaged in providing education in different fields. The assessee received Rs. 17,000 from 239 selected candidates sponsored in 1989 and the total amount of Rs. 40,63,000 has been directly taken to the liability side of the balance sheet as on31st March, 1990, according to the agreement with the Committee. This money did not belong to the trust who as far as the money was concerned were trustees and were to utilise the money for establishing a Center for Russian language and preparatory course as per MOU. Similarly, Rs. 59,84,000 (received from 176 students @ Rs. 34,000 each student in 1990) were directly taken to the balance sheet as on31st March, 1991. The loss of Rs. 9,79,000 on sale of equipments was also taken directly to balance sheet and adjusted against the credit balance of Rs. 40,63,000. 9. The AO denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the mischief of provision of s. 2(14)(iia) of the Act. 11. It was further contended that the assessee was engaged in educational activities as it entered into an agreement with the USSR Committee. It also startedschoolofRussianlanguage and preparatory studies in rental premises and employed teachers for Russian language and other subjects of the preparatory courses. These teachers taught regular classes of the selected students who were eventually sponsored for higher studies in various institutions inUSSR. The school was run for two years till its activities were frustrated by the political restructuring of the republic of formerUSSR. After this restructuring, the Committee informed the assessee that money collected from the sponsored students in the year 1989-90 for establishment of a Centre for Russian language and preparatory courses inIndiacould not be used for the purpose. The assessee was at liberty to utilise the aforementioned money for carrying out its object. Accordingly, the trustees started a school of para-medical education and training where students were admitted and taught for two years diploma for the sessions 1991-93 and 1992-94. The trustees also took st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption under s. 10(22), it is not necessary that the trust should be registered under s. 12A(a) of the Act, as registration under s. 12A(a) is made only when the exemption under s. 11 is sought. He further held that permission of the RBI or CBDT is only required when the money is required to be sent abroad. He further gave a finding that money collected by the society was to be utilised for setting up of an institution of Russian studies for which assessee hired a building and subsequently tried to acquire a land and purchased a flat. He further observed that the assessee is also running a school of para-medical education and training and when it was not able to get land and start educational institution, it donated its money to leading educational institutions for educational purposes as per its aims and objects and as per the permission given by the USSR Committee. 14. Accordingly, permission under s. 10(22) was granted and AO was also directed in succeeding years to grant exemption under s. 10(22) of the Act. 15. Aggrieved with the orders of the CIT(A) for impugned assessment years, Revenue has preferred an appeal before the Tribunal with the submissions that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Secretaries of Ministries of External Affairs and Finance and the Exchange Control Department of the RBI in which the assessee has stated its objective for supplying technical aids, audio visual aids and computer, etc., whereas as per the bulletin, fund was collected for different purposes. Like-wise, in asst. yr. 1991-92 for academic year 1990, assessee has charged Rs. 50,000 from each prospective candidate as per the MOU dt. 8th Aug., 1990, and even before authorisation, the assessee has started charging Rs. 50,000 from the prospective candidates as is borne out from the bulletin of information published by it before June, 1990. 17. It was further contended that it is not clear from the record how the money for establishing centre for Russian language and preparatory courses was sought to be utilised for buying computers, etc. He further contended that permission to supply 100 computers toUSSRwas sought from the RBI whereas 35 computers were demanded by theUSSRRepublic. This goes to prove that the assessee was never serious about the end use of the funds received from prospective candidates. The permissions being sought by the assessee are merely self-serving. It is also evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requested the trust that the fee payable for the asst. yr. 1990-91 can be utilised for sending equipment for teaching aids including computers, etc. to various institutions where Indian students were studying to enhance teaching skills of the staff and make the training more effective. Accordingly, the trust wrote to the RBI for permission to send the equipments, but it could not obtain the said permission. 20. Learned counsel for the assessee further refuted the contention of the learned Departmental Representative with the submission that learned Departmental Representative s contentions are based on frivolous arguments on the basis of documents of its own suitability without any substance. Learned Departmental Representative failed to appreciate and consider the relevant documents submitted by the trust regarding the details of course, curriculum, syllabus, study material, question paper and details of teachers in the Centre for Russian language and preparatory courses where the prospective students were given training for a period of 6 months before sponsoring them to institutions of higher learning in USSR instead of 1-1/2 months as contended by the learned Departmental Repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rospective students were given comprehensive training in Russian language and also in the other subjects, were simply denied by the Revenue, but they did not bring anything on record to falsify the claim of the assessee by doing necessary investigation. The main issue before us is "whether the assessee is entitled for exemption under s. 10(22) of the IT Act?". Before allowing an exemption, assessee is required to prove that it is engaged in educational activities and imparting education to the students. Assessee has also placed the relevant correspondence exchanged with the State Committee of USSR to prove that the assessee was solely engaged in educational activities and after the cracking of the formerUSSR, assessee started its own school to provide para-medical education and training and students were admitted for training of two years course for the sessions 1991-93 and 1992-94. It is also evident from the record that when the assessee was unable to continue with this educational activity, it provided financial assistance of Rs. 70 lakhs to various educational institutions in the form of capital money and admittedly all the educational institutions are solely engaged in educat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... language and preparatory courses in India which was again an educational purpose and when this purpose was not achieved in subsequent years due to break up of the USSR and the money and equipments could not be sent to the USSR, the trustees in their wisdom thought it fit to donate the amount of Rs. 70 lakhs to leading educational institutions after receiving intimation and permission from the USSR Committee. The trustees cannot be faulted with for the same as the trustees had carried out educational activities as per the aims and objects of the appellant-trust. The ratios of decisions relied upon by the AO are not applicable to the facts of the case. The decision of the Supreme Court in the case of MCD is not applicable to the provisions of IT Act as that has application to the Delhi Municipal Act. Similarly, ratio of decision in the case of Bihar Institute of Mining Office Surveys vs. CIT (1994) 121 CTR (Pat) 312 : (1994) 208 ITR 608 (Pat) is not applicable to the appellant which was not running any coaching centre or holding any tutorial classes. It held regular courses in Russian language as well as in para-medical and training courses. It is not necessary to spend any surplus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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