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TMI Blog2012 (1) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... ined the income of ICAI at ₹ 33,47,92,000/- in a scrutiny assessment u/s 143(3) of the Act, against NIL income declared by the ICAI( the assessee). While doing so, the AO observed that the assessee, ICAI did not provide any scholastic education, systematic instruction, schooling and training to the enrolled candidates and that consequently, the activity carried out by the ICAI did not fall under the category of "Education" within the provisions of section 2(15) of the Act, which defines "charitable purpose". 3. The learned CIT(A) subverted the order of the AO by holding, inter alia, as follows:- "2.3 I have considered the submissions made by the learned AR of the appellant Institution vis-a-vis the finding of the Assessing Officer made out in the Assessment Order. Parliament enacted Chartered Accountant Act, 1949 with the objective for the regulation of profession of Chartered Accountants and under the said Act. "The Chartered Accountant Regulations Act" was further enacted. The Institute of Chartered Accountants has its Headquarters in New Delhi and there are five regional Councils located in Mumbai, Chennai, Kolkata, Kanpur and New Delhi and 118 Branches spread all ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction, schooling or training given to the young has only cited on instance in order to indicate as to what to word "education" appearing in section-2(15) of the Act which defines "charitable purpose" is intended to mean. We are certain that these observations were not intended to keep out of the meaning of the word "education", persons other than "young". The expression "schooling" also mean "that school instructs or educates". The Supreme Court has observed that the word "education" also connotes the whole course of scholastic instruction which a person has received. This clearly indicates that the observations of the Supreme Court were not intended to give a narrow or pedantic sense to the word"education". The Hon'ble Gujarat High Court while dealing with the arguments of the appellant in the case of Saurashtra Education Foundation. (cited supra) made very important observation for the Institute of Chartered Accountants of India (page No. 146-147 of the Report) which is reproduced herein under:- "As regards the illustrations of the Institute of Chartered Accountants of India, although the Institute was earlier not running formal classes and there was no geographical prox ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee from students for imparting education, cannot be said to have been carrying on business and accordingly it is not required to maintain separate books of accounts as alleged by DIT(E). The income of the coaching classes earned by the assessee Institute is within its objects and its regulations and further these activities are educational activity within the definition of section-2(15) of the Act and consequently therefore cannot be activity of business for which separate books of accounts are required to be maintained. The order of the learned DIT (Exemption) is therefore not sustainable as the income of the Institute is exempt not only u/s -10(23C)(iv) but also u/s-11 of the Act. The Institute is an Educational Institute and hence its income will also be exempt u/s-11 of the Act. As education falls within the meaning of charitable purpose u/s -2(15) of the Act." In view of the above facts and activities carried out by the appellant Institute and after considering the judicial precedents discussed above, I differ with the finding of the Assessing Officer that the appellant does not provide any scholastic education and only conduct examination for Chartered Accountants and regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to earn and is carried out with a profit motive, in some cases the absence of profit motive may not be determinative. The appellant has given no such finding as far as the activities of the Institute are concerned. The appellant without examining the concept of business has held that the Institute was carrying on business as coaching and programmes were held by them and a fee is being charged for the same. On the basis of the findings recorded in the order dated 29th March, 2010, under sec. 263 of the Act, it is not sufficient to hold that the Institute is carrying on business. In these circumstances, we do not think that the order passed by the appellant under sec. 263 of the 1961 Act can be sustained and was, therefore, rightly upset and set aside by the Tribunal." 6. Though the aforesaid decision was rendered by the Hon'ble High Court while dealing with a matter u/s 263 of the Act, the aforesaid observations are squarely applicable to scrutiny assessment also and this position also remains undisputed. 7. The Tribunal (supra) followed its own decision in the assessee's case for assessment year 2005-06, in ITA No. 1853(Del)2010, wherein, it has been observed as follows (as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parable to the said Institute ………………………………………………" 10. The ld. CIT(A) has also taken due notice of the fact that in "Saurashtra Education Foundation" (supra), the Hon'ble Gujarat High Court referred to the observations of the Hon'ble Supreme Court in the case of "Sole Trustee Lok Shikshana Trust", 101 ITR 234 (SC), which are as follows:- "The Supreme Court, in the above observations, by referring tot eh systematic instruction, schooling or training given to the young has only cited on instance in order to indicate as to what to word "education" appearing in section-2(15) of the Act which defines "charitable purpose" is intended to mean. We are certain that these observations were not intended to keep out of the meaning of the word "education", persons other than "young". The expression "schooling" also mean "that school instructs or educates". The Supreme Court has observed that the word "education" also connotes the whole course of scholastic instruction which a person has received. This clearly indicates that the observations of the Supreme Court were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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