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TMI Blog2011 (12) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... USTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant: Mr.Ramesh Singh with Mrs. Megha Mukherjee, Advocates. For Respondent : Mr. Anupam Tripathi, Advocate R.V. EASWAR, J.: The petitioner is the Delhi Music Society which was registered as a Society in 1953 under the Societies Registration Act, 1860. It was established with the following aims and objects:- (a) To teach, promote and encourage all forms of Music and Dancing, Western, Indian or any other. (b) To establish and run Schools and Colleges of Music and Dancing or to assist such Institutions established by others. (c) To arrange Workshops, Lectures and Demonstrations and to utilize any other methods of teaching. (d) To grant scholarships, stipends or other forms of assistance. (e) To arrange Concerts and Recitals by local or visiting Artists. (f) To own lands and buildings or to rent premises for the Society. (g) To collect and to hold funds and distribute the same for achieving the above purposes. (h) To collaborate with other organizations, Societies. 2. The society was allotted a land measuring 0.422 acres by the Ministry of Works, Housing and Supply, Land D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es lacks the requisite recognition from any statutory body constituted in India. (e) The petitioner cannot be distinguished from any coaching or training institute preparing the students for appearing any examination for obtaining a formal degree by a formally recognized institution. The petitioner is not itself awarding any certificate or degree to the students. 4. The above objections of the prescribed authority were contested by the petitioner and detailed submissions would appear to have been filed before him. However, he rejected those submissions and held that the petitioner was not entitled to be characterized as an educational institution within the meaning of Section 10(23C) (vi) for the assessment year 2010-11 onwards. In support of his decision, the prescribed authority mainly relied on the judgment of the Supreme Court in the case of Sole Trustee, Loka Shikshana Trust vs. CIT (1975) 101 ITR 234 and it was observed that the word education has not been used in Section 2(15) of the Act in a wide sense, that it refers to systematic instruction, schooling or training given to the young in preparation for the work of life and that it connotes the process of traini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner says that the objects of the school are to teach western, classical music, to promote musical knowledge and the appreciation among the students as well as among the interested public by means of workshops, lectures/demonstrations, recitals etc, to acquire and maintain instruments for teaching purposes, to create and update a world class library of music literature both audio and video to add more class rooms and other required facilities for the purpose of musical education and to construct and maintain concert hall/auditorium for the school. Clause (vi) of the memorandum of association declares that the petitioner is not a society for profit and the income and property of the society shall be applied solely towards the promotion of the objectives of the society and no portion thereof shall be paid, directly or indirectly, as dividend or bonus or any other manner to any member of the society or its officer or servant or any other person. It is true that the petitioner is not affiliated to any university in India and is not recognized by any statutory body having anything to do with education. It is also a fact that the petitioner does not have a syllabus of its own an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) also uses the same language as Section 10(22), the same principle should govern the interpretation of that provision also. 11. Even if these tests are applied to the case of the petitioner, the petitioner fulfills them. As has already been noticed, the petitioner is teaching and promoting all forms of music and dance, western, Indian or any other. In accordance with the object, it is running a music school in Delhi, collecting tuition fee and admission fee from the students. Teachers have been employed and they have been paid salaries. Expenditure is also incurred on the maintenance of musical instruments. All these are reflected in the income and expenditure account for the years ended 31st March, 2006 to 31st March, 2010. The petitioner has also filed audited account for these years. In annexure P-5 to the writ petition, the petitioner has annexed a write up of its activities. From this, it is seen that there are 549 students enrolled with the petitioner who are taught western instruments according to their choice such as Piano, Guitar, Electronic Key Board, Wind Instruments, Drums and Vocal. The school faculty comprises of 30 teachers with 25 of them being Grade 8 and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court had occasion to examine the meaning of the word education in a different context. We find therein a reference to a judgment of the Hon ble Supreme Court in S.Azeez Basha v. Union of India [AIR (1968) SC 662] wherein the nature of an educational institution was dealt with. It was held by the Hon ble Supreme Court that there is a good deal in common between educational institutions which are not universities and those which are universities in the sense that both teach students and both have teachers for the purpose. It was further observed by the Hon ble Supreme Court that what distinguishes a university from any other educational institution is that a university grants degrees of its own whereas other educational institutions cannot. These observations of the Hon ble Supreme Court in our opinion support the stand of the petitioner that the fact that it does not conduct its own examination or awards degrees of its own is not decisive of the question whether it is an educational institution or not. It also lends support to the petitioner s stand before the prescribed authority that it is not a mere coaching centre preparing students for competitive examinations. The coaching ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It was thus held that the DIT(E) was not right in denying the benefit of section 10(23C)(iv) to the Institute. 16. Another aspect to be noticed is that normally coaching centres are run for shorter periods and they have no strict rules and regulations as an educational institution. There is no such thing as an academic year. Strict discipline and requirements of attendance are not enforced. Further they are run on commercial lines and with a profit motive. 17. In the petitioner s case, the prescribed authority has not stated that the music school is being run with a profit motive. No objection to the application for approval has been taken by the prescribed authority on this ground. However, such an objection is taken in paragraph F of the preliminary objections in the counter affidavit filed on behalf of the respondents. In this paragraph the respondent has furnished the figures of fee receipts, surplus and what is described by him as percentage of profit in respect of three financial years, namely, 2006-07, 2007-08 and 2008-09. After setting out these figures in the form of a table, it has been stated that the petitioner exists solely for the purpose of profit making a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceiving financial assistance from the government. After referring to the activities of the cooperative union, the High Court observed as under:- As noticed above, from the objects of the assessee, it is conducting training centres and colleges for various courses having a bearing on the field of co-operative movement. It appears to us that the decision of the Tribunal which seeks to rest it on the observations made by the Supreme Court in Loka Shikshana Trust s case [1975] 101 ITR 234 (SC), for holding that, the assessee is not entitled to exemption under section 10(22) of the Act is based on a complete misreading of the observations of the Supreme Court. In Loka Shikshana Trust s case [1975] 101 ITR 234 (SC), the Supreme Court, while dealing with the provisions of section 11 read with section 2(15) of the Act which defines charitable purpose observed as under (at page 241): The sense in which the word `education has been used in section 2(15) in the systematic instruction, schooling or training given to the young is preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word `education has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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