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TMI Blog2017 (8) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial/professional association/body. Commissioner of Income-tax (Appeals) has in our view misguided himself to construe the word "education" as occurring in section 2(15) in its widest sense. It is only the actual conduct of educational courses, where accredited, conducted under the auspices of a formal set up, so as to be recognised in the field of education, which would stand to be regarded as so. The assessee's objects and activity thus only fall within the purview of the residuary category of section 2(15), i.e., advancement of any other object of general public utility, so that the first proviso thereto shall apply, clearly debarring the assessee on account of its receipt for the year for being subject to exemption under section 11 of the Act. - Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility : Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity : Provided further that the first proviso shall not apply if the aggregate value of the receipts from the activities referred to therein is twenty-five lakh rupees or less in the previous year ;" (emphasis, by italics, ours) While the Assessing Officer (AO) considers the charitable purpose to be falling under the last limb, the learned Commissioner of Income-tax (Appeals) regards the assessee as pursuing the object of "education", so that, aggrieved, the Revenue is in appeal. 4. 4. We have heard the parties, and perused the material on record. The controversy 4.1 The basis of the denial of the claim f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm and organise a strong professional body of those connected or concerned with fibre reinforced plastics or other composites. C. To institute supervise, advise upon and advance the standards of materials, manufacturing processes, applications, user acceptance standards and related technical and non-technical subjects including education." The home page of its website (copy on record) declares its avowed objective as follows : "The institute was formed with an objective to promote Indian composites industry through collaboration and exchange of information with other likeminded professional societies, Government and non-Government organisations, research and development laboratories and educational institutions operating both in India and abroad." Further, it introduces itself therein as : "FRP Institute is a registered non-profit professional society based in Chennai, India. This organisation was formed in 1999 and has members ranging from a large multinational corporations to small fabricators spread all over the country. The member list include raw material suppliers, fabricators, machinery manufacturers, scientists, composite specialists, consultant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so construed, everything is education in the great school of life. In its words (page 241 of the Reports) : "The sense in which the word 'education' has been used in section 2(15) is the systematic instruction, schooling or training given to the young in 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 been used in that wide and extended sense, according to which every acquisition of further knowledge constitutes education. According to this wide and extended sense, travelling is education, because as a result of travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge. Again, when you grow up and have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the ways of the world. If you are not careful, your wallet is liable to be stolen or you are liable to be cheated by some unscrupulous person. The thief who removes your wallet and the swindler who cheats you teach you a lesson a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt Silk Cloth Manufacturers Association [1980] 121 ITR 1 (SC). Analysis/findings 4.4 The matter is thus no longer res integra, and to fall under the limb of "education" as a charitable purpose as contemplated under section 2(15), the same must necessarily involve an organised activity in the field of education. It may assume different forms, not necessarily confined to class room study, as open universities that have come about in recent times but has to have an element of scholastic education, discipline, and accreditation, i.e., carried out in an organised manner, which stands recognised in the field of education. The reliance by the assessee on its activities to contend that it is engaged in education, i.e., for the purpose of section2(15), is therefore completely misplaced. The assessee-institution to be regarded as an educational institution, which it must be to be considered as imbued with the character of education, its object must be predominantly education, i.e., as explained by the higher courts of law, the element of which we find as completely missing. The institution is in operation since the year 1999, and there is nothing on record to show that it has car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g some assistance in formulating its scope and ambit, as also explore the possibilities for entrepreneurship, being a fast developing technology with varied and growing applications. After all, training and development of manpower is a prerequisite for the propagation and continuous development of the relevant industry and technology. It is these educational institutions, executing and conducting the educational courses, which is an integrated process involving transmission of knowledge in a systematic manner, including providing avenues and facilities for its development, that are engaged in education. That it may, among its several activities, also conduct short-term courses for students, would not alter, much less materially, its character as an institution for the advancement and promotion of the FRP and other composites. As any other professional body, as indeed it claims to be except for the purpose of Income-tax, it aims at working in close association with industries and other institutions to upgrade composites technology and growth of the Indian composites industry. As borne out by the operating statement, the assessee has during the relevant year pursued its objects, car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early specifies the objects for which it is set up. The various public pronouncements and projections by it (through the media), as their reading shows, are also in consonance therewith. It is the objects clause in the constitution with reference to which its character, or the predominant character, i.e., in case of some ambivalence and divergence therein, absent in the present case, shall have to be determined. This is more so in the instant case as it is not disputed that the activities are being carried out only in pursuance of its objects. Reference in this context may be made to the decision in Delhi Stock Exchange Association Ltd. v. CIT [1997] 225 ITR 235 (SC), wherein it stands clarified that what is relevant is the legal obligation cast on the assessee. In the present case, it is the objects as set out in its charter which define the purpose for which it is established. We have already noted that we observe no disagreement between the same (objects) and its activities carried in pursuance thereto. Rather, where so, it would only imply that the said activities are not in pursuance of the assessee's objects, so as to be considered as validly performed, or judge its chara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers with which the assessee engages, so that even a receipt from this activity during the year would have no material impact. In fact, as we observe, the engagement with the educational institutions is on the fringe, though, as it appears, is slated to be expanded in future. Its operations as aforesaid are primarily as that carried out by the industrial/professional association/body. The learned Commissioner of Income-tax (Appeals) has in our view misguided himself to construe the word "education" as occurring in section 2(15) in its widest sense. As explained by the apex court, so considered, any activity would qualify to be education. Any constructive action would, and indeed even a destructive or negative one inasmuch as it entails a learning experience, as explained by the apex court in Sole Trustee, Loka Shikshana Trust (supra), would be education in itself. It is only the actual conduct of educational courses, where accredited, conducted under the auspices of a formal set up, so as to be recognised in the field of education, which would stand to be regarded as so. The assessee's objects and activity thus only fall within the purview of the residuary category of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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