9911796707
TMI Blog2019 (7) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... ds urged on merits. However, the orders of the Tribunal were reversed by Hon'ble High Court of Karnataka and hence the appeals were restored back to the Tribunal for adjudicating the grounds urged on merits. Consequently, a common order on merits was passed by the SMC bench on 26-10-2016 for both the years. Since the SMC bench did not adjudicate certain grounds, the assessee moved miscellaneous applications seeking recall of orders and consequent thereto, vide order dated 13-04-2017 passed in M.A. No.715 & 716/Bang/2017, the SMC bench recalled the common order passed for both the years for the limited purpose of adjudicating ground nos.3 & 4 relating to claim of exemption u/s 10(23C) and ground Nos. 6 to 8 relating to disallowance made u/s 40(a)(ia) for non-deduction of tax at source u/s 194C of the Act. Accordingly, these appeals were heard now for adjudicating above said issues. 3. The first issue relates to the claim of exemption u/s 10(23C) of the Act. The Ld A.R submitted that the assessee is running educational institution and it is substantially financed by the Government. Accordingly he submitted that the assessee is eligible for exemption u/s 10(23C)(iiiab) of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal by not challenging it before the Hon'ble High Court. Accordingly, the Ld D.R submitted that the assessee's contention cannot be accepted by the Tribunal, lest it should be contrary to the decision already rendered. Accordingly he submitted that the activities of the assessee cannot be considered to be activities of an "Educational institution" in terms of sec.10(23C) of the Act. Accordingly he submitted that the assessee is not entitled for exemption u/s 10(23C) of the Act. 5. In the rejoinder, the Ld A.R submitted that the case laws relied upon by Ld D.R has explained the meaning of the word "education". However, sec.10(23C) uses the expression "other educational institution". Hence the assessee should be falling under the category of "other educational institution". The Ld D.R placed his reliance on the decision rendered in the case of Mudra Foundation for Communications Research & Education vs. CCIT (2016)(237 Taxman 139) by Hon'ble Gujarat High Court in support of his contentions. 6. We have heard rival contentions on this issue and perused the record. We notice that the provisions of sec. 10(23C) uses the expression "University or other educational institutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... education". connotes in section 2(15) is the processing of training and developing the knowledge, skill, mind and character of students by normal schooling. In fact, the Apex Court has observed as follows at page 241 of the ITR: "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 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 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, traveling is education, because as a traveling 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 pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitute is not, in our opinion, an imparting of education which can be said to be a process of training and developing knowledge and character of students by normal schooling. A coaching institute cannot be said to be an institution where normal schooling is done. The definition of "charitable purpose" is inclusive and not exhaustive." 7. It is further seen that the Gujarat High Court also had an occasion to consider identical issue in the case of Saurashtra Education Foundation v. CIT [2005] 273 ITR 139 (Guj). The Gujarat High Court found that all kinds of education would not fall within the meaning of section 2(15) of the Act. The training, instruction, etc. would result in grant of a diploma or degree by a university or a governmental agency. In the case before us, admittedly, the taxpayer is conducting coaching classes. Therefore, it cannot be treated as a charitable institution as provided in section 2(15) of the Act. This Tribunal is of the opinion that the taxpayer is not eligible for registration u/s 12AA of the Act. Accordingly, the order of the lower authority is confirmed." 9. In the instant case, we have noticed that the assessee has been awarded a contract to cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is a "trust" and the trusts have been included long back in sec.194C of the Act. He submitted that the amendment inserted with effect from 1st June, 2008 was intended to cover Special purpose vehicles formed as Association of persons. 13 We heard the parties on this issue. The explanatory memorandum makes it clear that the scope of sec.194C was extended to cover Association of Persons from 1st June 2008, since a large number of works contracts are executed by a number of Special Purpose Vehicles (SPVs) structured as Joint Ventures/Consortiums in the nature of Association of Persons. However, the provisions of sec.194C is clear that the "trusts" are liable to deduct tax at source. There is no dispute that the assessee is a trust and hence, in view of specific provisions of sec.194C, it shall be liable to deduct tax at source. It may be pertinent to note that the Trusts file their return of income under the category of "Association of Persons" only, meaning thereby, the category "Association of Persons" would encompass different forms of association, of which SPVs and Trusts are one of the forms of association. Since the provisions of sec.194C specifically include "Tru ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
