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TMI Blog2021 (4) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... n and the decision rendered thereon would apply with equal force for Asst Year 2012-13 also except with variance in figures. 2. The assessee has raised the following grounds of appeal:- "This appeal is against the order of the learned Commissioner of Income tax (Appeals), Mumbai - 1 and relates to the Assessment Year 2011-2012, on the following grounds each of which is without prejudice to any other: 1. The learned CIT (Appeals) erred in holding that the Appellant Trust's activities did not fall within the provisions of sections 11 - 13 of the Act, the said activities being charitable in nature as per section 2(15) of the Act. 2. The learned CIT (Appeals) erred in confirming and the Assessing Officer erred in holding that the activities carried out by the Appellant Trust do not fall within the meaning of the word "education" in section 2(15) of the Act. 3. The learned CIT (Appeals) erred in confirming and the Assessing Officer erred in holding that activities of the Trust are in the nature of "advancement of any other object of general public utility". 4. The CIT (Appeals) erred in holding that the activities of the Appellant Trust are hit by proviso to section 2(15) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the proviso inserted thereon from Asst Year 2009-10 onwards. The ld. AO made the following observations in his assessment order:- i. During the course of assessment proceedings the assessing officer observed that the activities of the assessee are primarily in the nature of "advancement of any other object of general public utility only. Therefore, the assessee was issued show cause notice which is reproduced in para 3 of the assessment order. In response to the said notice the assessee vide letter dated 30.12.2013 submitted reply which is reproduced in para 3.1 of the assessment order. ii. The assessing officer after quoting the provisions of Section 2(15) of the Income Tax Act, 1961 in the assessment order has also reproduced Clause 7 of 'OBJECTS OF THE TRUST of assessee's trust deed in the assessment order However, after analyzing the activity of the assessee, it was noticed that the assessee is primarily engaged in doing publication and selling of the various books and CDs relating to various field. iii. AO also examined the claim of the appellant regarding its educational activities and observed that word of 'education' word education is not defined in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble business without paying the tax on it. Mere making of profit as a consequence or incident of altruistic activity is not decisive of the real purpose or object of the activity, so also the carrying on of a business for profit does not cease to be so merely because losses are actually incurred in certain ms because those who carry it on call it "education". It seems that the educational effects of a publishing business are only indirect, problematical, and quite incidental so that, without imposing any condition or qualification upon the nature of information to be disseminated or material to be published, the mere publication of views cannot be said to serve a purely or even a predominantly educational purpose in its ordinary and usual sense. 3.2. We find that based on the aforesaid parameters concluded that the assessee trust is not engaged in any activity which can be constituted as 'education' and that it is merely engaged in publishing and selling of books and CDs which does not fall within the term 'education'. The ld. AO also observed that the various receipts derived by the assessee trust are as under:- Income Amount % to the Total income By Interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'educational' and accordingly concluded that the activities of the trust falls in the category of 'advancement of any other object of general public utility' u/s. 2(15) of the Act. We find that the ld. AO also observed that the assessee is engaged only in publication and selling of books & CDs of various kinds which is commercial in nature having a profit motive. Accordingly, the ld. AO concluded that the assessee is not entitled for exemption u/s. 11 of the Act in respect of surplus derived by the trust in its income and expenditure account and accordingly sought to bring to tax the sum of Rs. 20,46,825/- as a regular private person engaged in commercial activities. 3.4. We find that the assessee had pleaded that it has the main object of promotion of Education in the field of art, culture and literature by various modes. Education in its general sense is a form of learning in which the knowledge, skills and habits of a group of people are transferred from one generation to the next through teaching, training or research. Education is a process either formal or informal that shapes the potential of a maturing organism. Informal education results from the constant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Indian Art & Culture. It was also stated that the book of Shri Rabindranath Tagore enabled the trust to fetch some marginal surplus due to various grants received for the same because it was a commemorative publication. In certain cases, due to the demand, the assessee trust reprinted the books. Since substantial cost of research and designing was incurred in earlier years, the books reprinted result in marginal surplus in the year of sale of those books. The assessee trust published quarterly magazines/journals during the year, containing serious information about various facets of Indian Art, the cultural events of India etc. This activity of publishing of books was carried out without any commercial motive and is part of its object of imparting education. The proceeds collected from sale of books/magazines etc were utilised towards the objects of the trust. The assessee submitted that it had received contributions aggregating to Rs. 21,71,202/- during the year which represents grants received for publishing specific books. Advertisements are published in the quarterly magazines/journals. The advertisement revenue subsidizes the cost of publishing the magazines/journals. 3.5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial sciences and disciplines with special reference to the Indian subcontinent but more widely to Asia, and in particular the spread of knowledge in the aforesaid fields by publication of magazines, books, papers, brochures, journals, catalogues, calendars, diaries, production of films or promulgation by any other media now known or hereafter devised and by any other means and programmes; 7.2 To work towards educative purposes including but not limited to arrangements for talks, lectures, seminars, courses, assistance to scholars, teachers, universities, colleges, schools or other educational institutions, assistance to museums, starting and establishment of such institutions or museums, establishment of trusts, and grant of fellowships, scholarships, grants, awards and monetary or other assistance to any person, group of persons, institute or any other entity having objects similar to those of the Trust or for the purposes mentioned in the Article 7.1. The Trust shall not exist for purposes of profit; 7.3 To undertake any other activity which is ancillary to and in furtherance of the objects of the Trust; 7.4 To undertake the advancement of any other object of general public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r with picturesque beauty of Delhi with its write up - enclosed in pages 17 to 31 of the paper book dated 18.12.2017. (ii) Book on 'Temple Towns of Tamil Nadu' - enclosed in pages 32 to 33 of the paper book dated 18.12.2017. (iii) Book on 'Persian Masters-five centuries of painting' - enclosed in pages 34 to 51 of the paper book dated 18.12.2017 (iv) Book on 'The Flowering of a Foreign Faith - New Studies in Chinese Buddhist Art' - enclosed in pages 52 to 67 of the paper book dated 18.12.2017 (v) Book on 'Silent Splendour Palaces of the Deccan (14th-19th Centuries)' - enclosed in pages 68 to 69 of the paper book dated 18.12.2017 c) Details of various libraries and institutions who have subscribed to the publications of the assessee trust in the form of statement showing the number of libraries, universities (both inland and foreign), museums, art galleries, government bodies and individuals, using the same - enclosed in pages 70 to 106 of the paper book dated 18.12.2017. d) Details of sample of famous publications of the assessee trust-enclosed in pages 107 to 110 of the paper book dated 18.12.2017. e) Copies of sample letters written to G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een squarely addressed by the Hon'ble Delhi High Court in the case of Delhi Bureau of Text Books vs. Director of Income Tax (Exemptions) reported in 394 ITR 387 (Del) wherein it was held that the assessee society engaged in printing, publication and distribution of school text books at subsidized rates or even free and generated profits out of these activities, it could not be concluded that assessee ceased carrying on charitable activity of education. We find that this judgment had duly distinguished the case law relied upon by the ld. DR in 101 ITR 234 (Lok Shikshana Trust case) and had also considered all the arguments advanced by the ld. DR in the case before us. The questions raised before the Hon'ble Delhi High Court are as under:- Questions of law 2. While admitting these appeals on 16th December 2015 this Court framed the following questions of law: "(i) Whether ITAT was correct in law and on facts in setting aside the order passed by CIT(A) and thereby denying exemption to the Assessee under Sections 11 and 12 of the Income Tax Act? (ii) Whether the ITAT was correct in law and on facts in holding that the activities carried out by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 our wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer. If you visit a night club, you get acquainted with and add to your knowledge about some of the not much revealed realities and mysteries of life. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing operative portion of the judgment in Rajasthan State Text Book Board (supra): "It is not disputed before us that the aims and objects of the Tamil Nadu Text Book Society and those of the Respondent-Assessee are almost identical. It is also not shown to us that the surplus amount, if any, of the Respondent-Assessee, is used for any other purpose or distributed to other members. The Commissioner of Income-tax (Appeals) as well as the Tribunal have noticed that even if some amount remains surplus, that is utilised only for the purposes of education. Thus, having regard to the concurrent findings of fact recorded by the Commissioner of Income-tax (Appeals) and the Tribunal and also taking note of the letter of the Central Board of Direct Taxes itself, it is not possible for us to say that the order of the Tribunal is erroneous in any way. In this way, no question of law arises for consideration much less a substantial question of law." 23.5 The Supreme Court in Assam State Text Book Production and Publication Corpn. Ltd. (supra) concluded as under: "Following the judgment of the Rajasthan High Court, we are of the view that, in this case, the High Court, in its impugned judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch we have referred to above have laid down the criteria under what circumstances an Assessee can claim exemption being involved in educational purposes and how the income is spent." 26. In Council for the Indian School Certificate Examinations v. DGIT (Exemptions) [2014] 362 ITR 436/[2012] 20 taxmann.com 505/206 Taxman 466 (Delhi) the Court held the Council for the Indian School Certificate Examinations to be an educational institution and quashed the order which denied it exemption under Section 10(23c)(vi) of the Act. It was reiterated as under: "It is, therefore, clear that courts have laid emphasis on the activity undertaken, while construing or deciding whether or not a particular institution can be regarded as an educational institution. The courts have repeatedly held that the holding of classes is not mandatory for an institution to qualify and to be treated as an educational institution. If the activity undertaken and engaged is educational, it is sufficient." 27. Reverting to the case on hand, the Court finds that what the ITAT has held in the impugned order is contrary to the settled law as explained in the above decisions. The ITAT came to the erroneous conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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