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TMI Blog2021 (4) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... on . The ratio basically boils down to (i) institutes affiliated to boards and universities providing schooling which resulted in a degree or diploma. (ii) primary education as was a backward integration to normal schooling. The Hon ble Gujarat High Court considered identical issue in the case of Saurashtra Education Foundation v. CIT [ 2004 (2) TMI 11 - GUJARAT HIGH COURT] and held that all kinds of education would not fall within the meaning of section 2(15) of the Act, unless the training, instruction, etc. results in grant of a diploma or degree by a university or a governmental agency. Various Courts have held that institutions allied to educational institutions which were providing normal schooling were also educational in nature. Institution conducting exams for diploma and degree courses were also treated as educational in nature. It has also been held that additional training or courses shall also be held as education provided such courses are conducting some primary educational activity whereas standalone such courses cannot be treated as education for the purpose of Income Tax Act. The society has not been registered or affiliated to any board or university or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Society is to assist in improvement of standard of vocational training and skill development in the country as a whole. (ii) The Society has been formed with the specific aim of up gradation of the Industrial Training Institute (ITI) Dadri into a centre of excellence in such a way that the training provided in the ITI is improved and becomes demand driven leading to better employability of the passing out graduates. (iii) In general the society shall function on no profit-no principle. However its affairs shall be managed in such a way that it becomes self supporting in due course and is able to meet ail its expenses and liabilities on its own. B. The main objects to be pursued by the Society are: (i) To manage affairs of the ITI Dadri according to the terms and conditions set out in a Memorandum of Agreement to be signed among the Central Government, State Government and Industry Partner. The representative of the Industry Partner shall sign this Memorandum of Agreement on behalf of the society also as its chairman. (ii) To development an Institute Development Plan (IDP) for the ITI Dadri. The IDP shall, interlaid, define longs-term goals of the institute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (xv) To undertake measures to achieve target Key Performance Indicators set out the Tripartite Memorandum of Agreement as referred in the Para (i) above. (xvi) To organize skill completions in the ITI, ' take part in other skill competitions including State/National/World Skill competitions. (xvii) To undertake publicity and other measures, like organizing seminars in schools for potential candidates for ITIs, to increase awareness about vocational training and also to create a better image of vocational training courses. (xviii) To promote measures so as to increase the capacity ITI by organizing second third shift in the ITI. (xix) To determine admission in the ITI in the to the extent provided in the Memorandum of Agreement referred to in Para 3B(i) above. B. The objects incidental or ancillary to attainment of Main objects of the Society: (i) To make provision in the ITI, so that any of the services as mentioned in the main objects may be rendered. (ii) To set up suitable mechanism of getting information on long term, medium term and short skill requirement in the region and provide the same to the State and Central / Government. (iii) To institu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank, draw, accept, endorse, discount and negotiate cheques, bills of exchanges, promissory notes and other negotiable instruments. (xvi) To invest funds of the Society in such manner, as proposed by the Society and in accordance with its rules and regulations. (xvii) To create depreciation fund, sinking fund, insurance fund, whether for depreciation or for repairing, improving, replacing, renewing, financing, extending, or maintaining any of the properties of the Society or for any other purpose what so ever deemed beneficial to the society and as per rules and regulations of the society. (xviii) To pay all expenses preliminary or incidental to formation and registration of the Society and for its management and administration out of its fund. (xix) To pay out of the funds of the Society or out of any particular part of such funds all expenses for carrying out any of the objects of the Society including payments of salaries and payments to persons employed or hired, if any. (xx) To impose and recover fees and charges for the services rendered by the Society. (xxi) To meet expenses of the Society out of its funds to buy materials/store that may be required to maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from tax u/ s 10(23C)(iiiab). The said income has been brought to tax by the Assessing Officer on the grounds that the assessee is not eligible for exemption u/ s 10(23C)(iiiab) and also held that the expenses incurred are not for the purpose of the assessee society. 6. The ld. CIT (A) held that as per the bare reading of the provisions of the Act and the affairs of the society, the assessee is not covered under the provisions of Section 10(23C)(iiiab). The ld. CIT (A) held that the assessee is a society engaged in improvement of standard of vocational training under public private partnership scheme but do not fulfill the primary conditions for claim u/ s 10 (23C)(iiiab). 7. The main argument taken before us by the ld. Counsel that imparting education and word education has to be examined in a broader sense consisting of any improvement in the intellectual and analytical abilities. It was argued that the word existing as imparting , the society assists financially the ITI Dadri for the up-gradation process under the Central Government scheme Up- gradation of 1396 Government ITIs through public private partnership . It was argued that the society existing for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit that the IMC of ITI fulfills both the conditions of section 10(23 C)(ii iab). So requested that exemption may be allowed. 8. We have gone through the assessment order, order of the ld. CIT (A) and the paper book filed. We have also gone through the balance sheets, income and expenditure, statement of the assessee wherein the income shown is from interest received on savings, fixed deposits and FDs whereas expenditure is on account of expenses viz. ₹ 2,00,000/- on account of garden expenses, ₹ 4, 92,000/- on faculty salary, ₹ 3,50,000 /- on account of peon and security etc. The expenses are on the similar proportion for the year ending 2016 and 2017. The details furnished by the assessee do not mention anything about the actual work undertaken by the society how and what role has been played by the society in improving the ITIs. 9. In the background of these details, the provisions of the Act are examined vis- -vis their applicability to the assessee before us. 10. Section 10 (23C)(iiiab) of the Income Tax Act reads as under: Incomes not included in total income: 10. In computing the total income of a previous year of any person, any incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of section 2(15) of the Act, unless the training, instruction, etc. results in grant of a diploma or degree by a university or a governmental agency. 16. Various Courts have held that institutions allied to educational institutions which were providing normal schooling were also educational in nature. Institution conducting exams for diploma and degree courses were also treated as educational in nature. It has also been held that additional training or courses shall also be held as education provided such courses are conducting some primary educational activity whereas standalone such courses cannot be treated as education for the purpose of Income Tax Act. 17. We find that the society has not been registered or affiliated to any board or university or any organization imparting education as defined by the Hon ble Supreme Court. There is a sweeping difference in according the any assessee to the provisions of Section 12AA and Section 10(23C)(iiiab). The conditions and requirements of registration under Section 12 AA and the conditions and prerequisites for the claiming the benefit u/ s 10(23C)(iiiab) differs. We also find that the assessee has been granted registration u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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