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TMI Blog2018 (4) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... ‘advancement of any other object of general public utility’ contained in Sec. 2(15) of the Act, even then, from Assessment Year 2009-10 onwards, the insertion of proviso does not take away the benefits of Sections 11 & 12 of the Act from the assessee inasmuch as the proviso does not disentitle the assessee’s activities from being considered as for charitable purpose because of the above discussion. - Decided in favour of assessee. - ITA NOS. 2913 & 2914/MUM/2016, ITA NO. 2915/MUM/2016, ITA NO. 2506/MUM/2014 And CO NO. 182/MUM/2015 - - - Dated:- 25-1-2018 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER For The Assessee : Shri S. Ananthan And Mrs. Lalitha Rameswaran For The Revenue : Shri Suman Kumar ORDER PER G.S. PANNU, AM : The captioned are five appeals; one by the Revenue and four by the assessee, pertaining to Assessment Years 2009-10, 2010-11, 2011-12 and 2012-13. In all the appeals, issues involved are common, which primarily arise from the exemption claimed by the assessee on the ground that it is a charitable institution as it is engaged in the activity of imparting education. For Assessment Year 2009-10, Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ield of banking and finance management and has an all-India character. The assessee-society has its members, the Reserve Bank of India, State Bank of India, other subsidiaries of State Bank of India and 19 nationalised banks. The members also include other similar institutions, including co-operative banks, etc. From the material placed in the Paper Book, it is seen that the assessee is managed and controlled by the Government of India through the Reserve Bank of India inasmuch as it has one nominee from the Ministry of Education, Government of India and two nominees of the Reserve Bank of India, apart from others, on its Governing Board. In fact, the first Object clause reads as under :- to establish and to carry on the administration and management of the National Institute of Bank Management. The other main objects of the assessee-society are enumerated as under :- a. to plan, promote and provide for education and training in operations and management of banking and financial institutions and to undertake, organize and facilitate Conferences, Seminars, Study Courses, Lectures and similar activities for the purpose; b. promote and conduct research in matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Assessment Year 2009-10 in view of the insertion of proviso to Sec. 2(15) of the Act. In Assessment Year 2009-10, the Assessing Officer took the view that the assessee was not an educational institution so as to be covered by the expression education contained in Sec. 2(15) of the Act because it was holding banking coaching classes, seminars and training programmes against collection of fees, etc. The Assessing Officer noted from the Income Expenditure account that assessee had earned income from the organisation of training, seminar, post graduate training by collection of fees, etc. Further, as per the Assessing Officer, even otherwise assessee fell within the scope of Sec. 2(15) of the Act only in the category of advancement of any other object of general public utility and, therefore, having regard to proviso to Sec. 2(15) of the Act, introduced w.e.f. 01.04.2009, its activities could not be considered as for charitable purpose since it was collecting fees, etc. At this stage, we may also refer to another observation made by the Assessing Officer in the assessment order for Assessment Year 2010-11 to the effect that assessee was a mutual association and non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s activities are carried out without any profit motive and, therefore, in any case, proviso to Sec. 2(15) of the Act is not attracted. At the time of hearing, the learned representative has also referred to and relied upon the ratio of various judicial pronouncements, which we shall deal with in the subsequent part of this order. In sum and substance, the case sought to be made out by the assessee is that it is a body which exists solely for the purpose of education, research and training in the field of banking and finance and, therefore, it should be seen as an institution existing solely for education purposes and thus, eligible for the benefit of Sections 11 12 of the Act. By referring to the Paper Book, wherein is placed the Annual Accounts of the previous year relevant to the captioned assessment year, it is sought to be pointed out that the stream of incomes clearly show that there is no profit motive involved and, therefore, the Assessing Officer clearly erred in holding that there was a commercial intent. 7. On the other hand, the ld. DR appearing for the Revenue has reiterated the stand of the Assessing Officer, which we have already noted in the earlier paras and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and provide training in operation and management of banking and financial institutions, besides organising and facilitating seminars, study courses, lectures and similar other activities for the said purpose. Considering the stated objects, we are not inclined to accept the plea of the Revenue that the main objects of the assessee is not education . Besides the stated objects, the written submissions which have been filed by the assessee before the lower authorities also give an insight to the activities being actually pursued by the assessee. It emerges that the assessee is recognised by the University of Pune as an approved centre for post-graduate research and also by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India. It is pointed out that assessee is conducting post-graduate Diploma courses and many Ph.D students are also registered with it for their Doctorial dissertation under the supervision of assessee s faculty members. It has also been pointed out that assessee has thirty full-time faculty of academicians from a wide range of disciplines, viz., Economics, Finance, Commerce, Business Management, Computer Scien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the fact-situation that the surplus, if any, is being applied only in furtherance of its stated objects. 11. The learned representative before us referred to the judgment of the Hon'ble Supreme Court in the case of Assam Text Book Production and Publication Corporation vs CIT, 319 ITR 317 (SC) , wherein the activity in the field of publication of text books was also held to be an activity falling within the scope of education . Similarly, the judgment of the Hon'ble Gujarat High Court in the case of Gujarat State Co-operative Union vs CIT, 195 ITR 279 (Guj.) has also been relied upon. In the case of Gujarat State Co-operative Union (supra) , assessee was engaged in conducting courses for Higher Diploma in Co-operation, Diploma in Land Development Banking, Certificate Course in Co-operative Credit and Banking and Specialised Short-term Courses/ Orientation Courses. The assessee therein was also conducting seminars and running training centres for employees of Urban Co-operative Banks, District Co-operative Banks, etc. The Hon'ble Gujarat High Court understood such activities to be falling within the expression education . In coming to such a conclusion, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gramme, Management Development programmes, public talks, seminars, workshops, etc. Such like activities were also held to be in the nature of education eligible for the benefit of Sections 11 12 of the Act. In fact, the Hon'ble Delhi High Court in the case of Council for the Indian School Certificate Examinations vs DGIT(E), 362 ITR 436 (Delhi) was considering the activities of an assessee who was neither conducting any classes and nor was directly engaged in teaching students, but was only affiliating schools, prescribing syllabus and conducting examinations. The institution carrying out such activities was also understood by the Hon ble Court to be an educational institution. 14. When we apply the aforesaid principles to the admitted nature of activities in the present case, we have no hesitation in holding that assessee is an educational institution and, therefore, it falls within the scope of the expression charitable purpose contained in Sec. 2(15) of the Act. 15. Now, we may deal with the reference to proviso to Sec. 2(15) of the Act made by the Assessing Officer. Pertinently, the proviso to Sec. 2(15) of the Act is relevant qua the activity of advancemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to encourage the right attitudes to development of management skills, capabilities and also to impart new technological skills. The Committee appointed by the RBI in this direction made a major recommendation for establishment of the National Institute of Bank Management. This was a precursor to the establishment of the assessee by the RBI in consultation with the Government of India in 1969 as an autonomous non-profit institution in the area of banking and finance. The Committee on Training and Development of Higher Banking Personnel carved out the role of assessee as being an entity to translate national policies relating to the banking sector into meaningful training programmes at the level of individual bank and help the implementation of those policies by creating a climate of intellectual appreciation and emotional dedication . Therefore, looking at the background of the formation of the assessee and its stated objects, which we have reproduced in the earlier part of this order, the assessee-institute was to act as a catalyst for the new banking policy of the Government of India towards evolving appropriate guidelines for banks in the areas of management capabilities and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of American Hotel Lodging Association (supra) noted that it may not be possible to carry on activities in such a way that the expenditure exactly matches the income and there is no resultant profit. As per the Hon'ble Supreme Court, such an objective is not only difficult to achieve for practical considerations, but also reflects unsound principles of management. To reiterate what we have noted earlier, in such a situation, the test to examine the existence or otherwise of profit motive is to find out the purpose for which the resultant surplus is being applied for. Factually speaking, in the present case, there is no allegation, much less any evidence, brought out by the Revenue to say that any amount has been applied by the assessee for purposes other than its stated objects, which ostensibly is in the field of education. Pertinently, upto Assessment Year 2008-09, assessee was accepted to be an entity engaged in education and in even in the captioned years there is no charge against the assessee that any of its activities have undergone any change. Therefore, merely because of insertion of the proviso, the nature of activities do not undergo a change unless it can be m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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