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TMI Blog2016 (1) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... r colleges adopt to teach. In the progressive world, it is expected from certain institutions that they educate, teach and train persons so that those persons can compete similar experts worldwide. Therefore, we are not in agreement with the submissions made by Mr Bhatt, learned Senior Counsel that the sole object of the institution is not to impart education. By providing latest information and thereafter training to those persons who are already in the field of advertising communication, etc. and in such process if certain persons become super-specialists in particular field and for which the institution is charging fee, we are of the opinion that the case would not fall under proviso to Section 2(15) as submitted by Mr Bhatt, learned Senior Counsel appearing for the respondent. Considering the object of the petitioner institution, we are of the opinion that the petitioner institution is established for the sole purpose of imparting education in a specialised field. Hence, the petition is allowed. Certificate under Section 10(23C)(vi) to be allowed - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 6086 of 2015 - - - Dated:- 29-7-2015 - MR. A.J.DESAI AND MR. A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions. By two letters dated 28th February 2014 and 13th August 2014 detailed submissions were made before the respondentcommissioner with whom the application was pending for adjudication. By the impugned order dated 29th September 2014, the respondent-commissioner refused to issue the certificate under Section 10(23C)(vi) of the Act on various grounds. Hence, this petition. 5 Mr Bandish Soparkar, learned advocate for the petitioner has vehemently submitted that the respondent Commissioner has grossly erred in rejecting the application on the ground that (i) The applicant does not have education as the sole purpose, (ii) The applicant is engaged in conducting coaching/training courses for and on behalf of industry, trade and commercial organisations; (iii) The applicant is engaged in various social activities of general public and public utility; and (iv) the applicant is not conducting educational courses as charitable activity, but for the purpose of profit. 6 By taking the Court through the objects enumerated in the Memorandum of Association of the petitioner, Mr Soparkar would submit that the petitioner is established solely with the purpose of prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f courses and the students who join the institution have to attend the classes. Renowned Professors from India as well as foreign countries, deliver the lectures and provide material which may help them in educating themselves in their own field. He, therefore, would submit that these observations are required to be brushed aside. He would submit that to organise various training programmes for the students, which might involve or participation of marginalised communities and deprive the society is not correct finding and the finding to the effect that this object can be treated as a general public utility, but not education field is erroneous. Mr Soparkar, while attacking the last observation made by the respondent authority that the applicant is not conducting the educational courses as charitable activity, but for the purpose of profit, would submit that the impugned order itself does not prima facie establish that the income received by the petitioner trust has been used for any other purpose than the objects mentioned in the Memorandum of Association. He would submit that the respondent was aware about the objects of the petitioner institution when the authority has issued the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecialised filed i.e. communication. He, therefore, submits that the petition may be allowed and the order dated 29th September 2014 passed by the Respondent- Chief Commissioner of Income-tax, Ahmedabad-IV by which the application submitted by the petitioner to issue exemption certificate in its favour under Section 10(23C)(vi) of the Act has been refused may be set aside. 10 On the other hand, Mr M.R.Bhatt, learned Senior Advocate assisted by Mrs Mauna Bhatt, learned counsel for the respondent has vehemently opposed the petition and would submit that the respondent authority has dealt with the case of the petitioner institution in detail and has rightly come to all the conclusions which are reflected in the operative portion of the order. He would submit that the petitioner institution is not existing solely for educational purposes since the some of the objects of the petitioner institution would establish that it is not established solely for educational purpose. 11 As far as conclusions arrived at by the respondent authority that the applicant does not have education as the sole purpose of its existence, he would submit that the case of the petitioner would fall under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orandum of Association are concerned, the same are reproduced hereunder for ready reference: 3. The objects for which the Society is established are: (i) to establish and to carry on the administration and management of the Mudra Foundation for Communications Research and Education, Ahmedabad. The functions of the Society shall be: (a) to provide for training in Communication including Advertising and related subjects for persons from industry, institutions and bodies and associations connected with industry and commerce and individuals in such a way as to equip them thoroughly to practice the art and profession of Communication in which they have been trained or, in appropriate cases, to instruct others in the practice of Communication; (b) to select and prepare outstanding and talented mature young persons for careers leading to Communication including Advertising responsibility. (c) to award diplomas, certificates and other distinctions to candidates trained, and to prescribe standards of proficiency before the award of such diplomas, certificates and other distinctions; (d) to institute and award fellowships, scholarships, prizes and medals in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes falling within the objectives mentioned in these precincts shall be used for such specific purpose only. (v) to acquire by gift, purchase, exchange, lease or hire or otherwise any lands, buildings, easements and any other property movable and/or immovable and for any estate or interest for furtherance of ail or any of the objectives of the Society. (vi) to sell, manage, exchange, transfer, mortgage, pledge, hypothecate gift, lease, dispose off or otherwise deal with any property, whatsoever belonging to the Society for the best interest of the Society. (vii) to commence, defend, appear, contest, sue, continue, compromise, submit to arbitration, submit to decree or judgment, abandon civil, criminal, administrative, revenue, municipal arbitration conciliation or other proceedings or inquiry for the benefit or furtherance or in conjunction with the objects of the Society or any of them. (viii) to build, erect, construct, alter or add to extend, buildings and/or structures which are necessary or requisite for all or any of the purposes and objects of the Society and to equip them as may be necessary and to manage and administer the same. (ix) To maintain and repai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, benefactions, bequests or transfers: (a) all monies received by the Society by way of grants, gifts, donations, loans, benefactions, bequests or transfers: (b) all fees and other charges received by the Society: (c) all monies provided by the Central and the State Government: and (d) all monies received by the Society in any other manner or from any other sources; (xvii) to deposit all monies credited to the Fund in such Banks or to invest them in such manner as the Society may decide in conformity with the applicable laws. Any surplus funds out of the funds received u/s 35(1)(iii) of the Income Tax Act, 1961, not needed for immediate research work will be invested by the organization in accordance with the modes specified in the Section 11(2), 11(3) and 11(5) of the Income Tax Act, 1961 as amended from time to time. (xix) To prepare and maintain accounts and other relevant records and to prepare an annual statement of accounts including the balance sheet of the Society in such forms as may be prescribed by the Societies Registration Act of 1860; (xx) To do all such things as may be necessary, incidental or conductive to the attainment of all or any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons can compete similar experts worldwide. Therefore, we are not in agreement with the submissions made by Mr Bhatt, learned Senior Counsel that the sole object of the institution is not to impart education. By providing latest information and thereafter training to those persons who are already in the field of advertising communication, etc. and in such process if certain persons become super-specialists in particular field and for which the institution is charging fee, we are of the opinion that the case would not fall under proviso to Section 2(15) as submitted by Mr Bhatt, learned Senior Counsel appearing for the respondent. 17 In case of Queen's Educational Society v. Commissioner of Income-tax, [2015] 55 taxmann.com 255 (SC) the Honourable Supreme Court has dealt with the similar provisions and more particularly provision of Section 10(23C) (vi), etc. With regard to the case of the respondent authority that the surplus funds of the institution have ever been used for other purpose than the purpose of promoting educational activities including research, etc. by relying upon the case of Aditanar Educational Institution v. Additional Commissioner of Income Tax, (1997) 224 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgments of various High Courts which have relied upon the decision of the Pine Grove International Charitable Trust (supra) and the observations are reflected in paragraph 23 of the judgment. It has also been held by the Honourable Apex Court that the Assessing Authority under the Act can monitor the income and expenditure of the assessee who has been granted the certificate under Section 10(23C)(vi) of the Act. The relevant paragraph viz. paragraph 25 of the aforesaid judgment in the case of Queen's Educational Society (supra) reads as under: 25. We approve the judgments of the Punjab and Haryana, Delhi and Bombay High Courts. Since we have set aside the judgment of the Uttarakhand High Court and since the Chief CIT s orders cancelling exemption which were set aside by the Punjab and Haryana High Court were passed almost solely upon the law declared by the Uttarakhand High Court, it is clear that these orders cannot stand. Consequently, Revenue s appeals from the Punjab and Haryana High Court s judgment dated 29.1.2010 and the judgments following it are dismissed. We reiterate that the correct tests which have been culled out in the three Supreme Court judgments stated ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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