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TMI Blog2014 (5) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... eld – Relying upon COUNCIL FOR THE INDIAN SCHOOL CERTIFICATE EXAMINATIONS Versus DIRECTOR GENERAL OF INCOME TAX [2012 (3) TMI 289 - DELHI HIGH COURT] - assessee though being only in conducting examinations is still to be regarded as educational institution. Also in Assam State Text Book Production and Publication Corporation Limited Versus Commissioner of Income Tax, Gauhati-I [2009 (10) TMI 60 - SUPREME COURT] it has been held that board though being only in the publication of books falls within the meaning of educational institution - It is not necessary to hold regular classes to be regarded as an educational institution – in AMERICAN HOTEL & LODGING ASSOCIATION EDUCATIONAL INSTITUTE Versus CBDT & OTHERS [2008 (5) TMI 17 - SUPREME COURT OF INDIA] publication of curriculum, reproduction of text books, faculty development programmes are to be held as educational activities. There was no merit in the order of AO to give a restricted meaning to the scope of meaning of term educational activities - AO's necessity of holding of regular classes or wholesome educational activities to be only eligible to be called educational activities eligible for benefits u/s 11 cannot be sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prepared by the foundation is imparted to the students through the teaching staff of the respective schools. Thereafter an examination is conducted across India through these schools only and to the successful students, certificate of participation is awarded. The fees collected from the students is partly retained by the each schools and balance is remitted to the assessee foundation. Thus, the foundation s income is received not directly from students but CBSE affiliated and other schools through their principals all over India. The foundation has developed a centre at Gurgaon to help, organize, develop and promote these unique science educational programmes for desirous students of school level in the various disciplines of science such as mathematics, physics, chemistry, biology and computer sciences. In addition the assesse activities, assessee organizes Olympiads to search the best students and best teachers in these science strdeams. The methodology is promoted with Kendriya Vidalaya Sangathan, for participation in the programmes, the fee structure in consultations with schools is kept relatively much lower. The assessee foundation has educational collaboration with Englis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee are contradictory in it self. No charity seems to be carried on by the assessee as per records/documents furnished by the assessee during the survey/ assessment proceedings. Further, as per information furnished no faculty/teaching facilities has been ever provided by the assessee company. Merely conducting of examination is not imparting of education activity until unless the whole system of education i.e. to provide educational facility at the first level and than conducting the examination is provided in toto. Again there is no direct/indirect nexus in between the students and teachers which is a must for carrying on educational activity. The assessee company is only being reimbursed the cost of printing and stationary/ cost of conducting the examination from the students, which does not have any linkage with increasing the talent of the students by the assessee company. Therefore, the activities carried out by the company are not within the ambit of charitable purpose as per the u/s 2(15) of the Act. 8. The assessee company is not recognized by the any directorate of education/ any university or any other Govt. body. The results of examinations are also not being re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption as educational institution that the institution should provide whole education. The Assessing Officer in the assessment order has admitted this fact that the appellant institution is engaged in conducting examinations. Firstly, as stated hereinabove, this is not so but still in view of the above of the judgment of the various High Courts conducting examination will also make it eligible for exemption as charitable institution. In the cases of Secondary Board of Education vs. ITO 36 ITR 408 (Orissa) the High Court has held that the secondary Board of Education which is conducting examination only will be an educational institution within the meaning of section 2(15) of the Act. Similarly publication of text books has been held by the Court to be education eligible u/s 2(15) of the Act. In the case of Assam State Text Book Production and Publication Corporation Ltd. vs. CIT 319 ITR 317 (Sc) the allegation the assessee was that it was engaged in the publication of text books and as such it is not engaged in conducting teaching classes or directly imparting education through teaching. The Supreme Court did not agree with the contention of the department and held that the Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities. In terms of the approval granted by the Govt. of India it has been specifically provided in the Memorandum that the institution will be a nonprofit organization and if upon winding up or dissolution there remains any surplus the same shall not be distributed but will be given or transferred to such other institution having similar object. Further in terms of the approval granted by the Govt. of India no alteration can be made to the objects of the institution without a previous approval of the Govt. of India. The institution is duly registered u/s 12A of the Act and accordingly it fulfills all the conditions to be eligible for claiming exemption u/s 11 of the Act. 4.13 The Assessing Officer has referred to the survey report carried out at the premises of the appellant institution u/s 13A of the Act. In this regard he has referred to the survey report dated 13th January,2011. On the basis of this survey report has drawn adverse inference against the appellant institution. The observations made in the survey report are as under: i. During the course of survey the assessee has not produced salary register, vouchers, regarding salary of Rs.24,97,225/- paid in the F. Y. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vii. Assessee is not engaged in whole system of education and conducting only examination does not amount to education. viii. The assessee is not recognized by any Directorate of Education/ any university or any other Government body and hence it cannot be equated with any other body which conduct examination since all other bodies are recognized by the Government or through any legislation. 4. Ld. counsel for the assessee in reply reiterated the facts and contends that ld. AO ignored the history of past assessments framed u/s 143(3) wherein after proper verification of record, its activities were held to be educational as well as charitable in nature nd benefits of sec 11 were allowed. 4.1. It is pleaded that appellant is a company incorporated under Section 25 of the Companies Act, 1956 in terms of the exemption granted by the Ministry of Company Affairs vide letter dated 29th December, 1999. The assessee was granted registration under Section 12A of the Income Tax Act vide registration dated 22nd December, 2000. 4.2. Assessee is registered u/s 12A with objects to pursue educational activities i.e. establish, run and operate on non-profit basis schools, regional ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y relates to education, the same will be considered to be a charitable purpose within the meaning of Section 2(15) eligible for exemption under Section 11. 4.6. The applicant foundation has developed the expertise in imparting education in the science by course resource material . All those students who are interested in learning and getting this education are required to get registered with the institution. This registration is done through recognized schools and colleges spread across India. These schools includes by and large all Kendriya Vidyalaya, Jawahar Navodaya Vidyalaya, Government schools, DAV schools and other recognized schools across India. The total number of schools from which these students have been registered are more than 7,400. For the purpose of imparting this education and learning each school carries out the registration of the student on behalf of the appellant foundation. The course resource material (CRM) is imparted to the students through respective school teachers, spread across India through the course resource material provided by the appellant foundation. Thereafter an examination is conducted across India and the certificate of participating in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer has made certain observations which in view of the above explanations are factually incorrect. It has been erroneously stated by the Assessing Officer that the assessee has failed to submit any supporting evidence in support of charitable activities. 4.12. It is pleaded that despite denial of benefits of sec 11. assessee s registration u/s 12A still continues on the same objecs and activities. There is no change in the assesses objects, activities, methodology, CRM, fee structure and affiliations with Govt. recognized boards and schools. Thus though the objects, activities and facts remained same as compared to earlier years, ld. AO changed his opinion without there being any variation in the facts and circumstances. 4.12. The assessee s activities are erroneously held by AO to be neither educational nor charitable in nature by general and untenable observations. It has been alleged that assessee is not engaged in wholesome imparting of education by holding classes on regular basis. Merely offering course material and conducting examinations does not amount to educational activity . While giving these findings ld. AO has conveniently ignored the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll fall within the meaning of Educational institution. Thus an institution only publishing educational books has been held to be educational institution. 4.16. Hon ble Orissa High Court in the case of Secondary Board of Education vs. ITO 36 ITR 408 (Orissa). In this case the Secondary Board of Education which was conducting examination only and question was arisen whether it was an educational institution or not. It was held that the activities of conducting examinations undertaken by the Board will qualify for the purpose of education. 4.17. Hon ble Rajasthan High Court in the case of CIT vs. Rajasthan Text Books Board 2444 ITR 667 (Raj.) whereby it was held that the State Text Book though not imparting education by teaching students or holding classes but publication of text book will qualify for exemption. 4.18. Hon ble Supreme Court in the case of American Hotel Lodging Associating 301 ITR 86 (SC) where an issue has arisen where the appellant institute which is providing services in the form of curriculum to reproduction of text book and faculty development programme can be said to be engaged in educational purposes and therefore eligible for exemption. The Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een withdrawn. It has been demonstrated by the assessee s counsel that nature of its educational activities, modalities of working, methodology of affiliation with CBSE and other Boards, fee structure, examination pattern remain same as in earlier year. 5.1. Ld AO has taken a divergent view on the assessee educational activities by holding that they are no more educational activities as regular classes are not held. AO's objections have been listed above. Hon ble Delhi High court in the case of Council for Indian schools certificate examination has sqarely held that assessee though being only in conducting examinations is still to be regarded as educational institution. 5.2. Hon ble Supreme court in Assam Book Production case (supra) held that board though being only in the publication of books falls within the meaning of educational institution. It is not necessary to hold regular classes to be regarded as an educational institution. Hon bleSupreme court in American Hotels and lodging association case (supra) has squarely held that publication of curriculum, reproduction of text books, faculty development programmes are to be held as educational activities. 5.3. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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