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TMI Blog2023 (1) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The learned CIT(Appeals) - 10 ought not to have held that the tuition centres run by the Trust are hit be the provisions of section 2(15) of the Income Tax Act 1961 and ought not to have rejected the appellant Trust's plea that they would come under the term education and would qualify for deduction as application of income. 3. The learned CIT(A)-10 ought to have further appreciated the fact that the term "education" would include tuition centres or coaching centres and ought not to have rejected the claim of the appellant Trust. 4. The Learned CIT(Appeals)-10 ought not to have rejected the claim of the appellant Trust as far as tuition centres were concerned only on the premise that the Trust did not demonstrate that the students who received the benefits were poor students and that the fee charged was nominal. The CIT(Appeals)-10 ought to have appreciated the fact that the fee charged from poor and weaker section of students was indeed very nominal and ought not to have rejected the genuine claim of the appellant Trust. 5. For the grounds stated above and the grounds which may be permitted to be adduced at the time of hearing the appeal, it is prayed that the reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marks. The registration fees of Rs. 50/- and tuition fees of Rs. 100/- to Rs. 300/- a quite nominal compares to rates charges by tuition masters for higher income groups. The activity is charitable in nature aimed at benefitting children from lower income group families. It may also be seen from the Accounts that against the income of Rs. 49.84 lakhs from registration, tuition and training fees for the year, the expenditure on teachers salary and fees alone exceeded Rs. 1 crore. Thus this activity of the Trust was funded mainly from voluntary contributions." The submission and justification of the AR was given a careful* study. the assessee's contention on sec.2(15) is not tenable. The activity of running tuition centers had been held to be business in nature ride various judicial decisions. If at all, running of tuition centers toward achievement of the object of the assessee trust is to be considered as charitable ,it clearly fits only into the category of objects of general public utility. The activities of the trust are not covered under education, - relief to the poor ;medical relief, preservation of environment and preservation of mounument or places or objectives or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enforce an altered from of taxation and when sec.11&12 become inapplicable, the assessee is treated like a business enterprise in the* status of AOP. therefore, the depreciation allowance of Rs.36,330/- relating to assets acquired during the year under consideration is provided to the assessee and allowed as expenditure. The taxation of income is not confined to the income derived from sale of micro chips and service for issues of certificate. section 13(8) prohibits applicability of sec.11 &12 in respect of any income of the society and is not restricted to the business activity of trust. Therefore, the surplus derived by the trust is entire brought to taxation." 4. Being aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee has challenged rejection of exemption claimed u/s. 11 of the Act along with certain judicial precedence. The sum and substance of arguments of the assessee before the Ld. CIT(A) are that running tuition centres comes under the definition of charitable purpose, because it is in the nature of imparting education. The assessee further contended that it is also in the nature of relief of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner Of Income Tax, 101 ITR 234had held that every activity of obtaining knowledge cannot fall under the charitable purpose of education. It was held therein that 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 in preparation for the work of life and further clarified that what education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by normal schooling. The said position was also followed by the Hon'ble Patna High Court in the case of Bihar Institute of Mining and Mine Surveying vs Commissioner of Income Tax, 208 ITR 608 wherein it was held that coaching of students in an institute is not imparting of education. 5.3.13 As regards the case laws relied upon by the appellant, it is to state that in the case of Hyderabad Study Circle cited supra, though the Hon 'ble Tribunal considered the judgement of Sole Trustee, Loka Shikshana Trust vs Commissioner of Income Tax cited supra, it did not address the issue as to whether the assessee provided education by normal schooling and also whether the curriculum include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the activities of the assessee trust which are in the nature of general public utility and provisions of section 2(15) of the Act is applicable. 6. The Ld. DR, supporting the order of the ld. CIT(A) submitted that the objects and activities of the assessee are neither in the nature of education nor comes under the definition of relief to the poor, but in the nature of any other objects of general public utility and thus, the case of the assessee squarely comes under the purview of proviso to section 2(15) of the Act. Since, the receipts of the trust for all three assessment years is above the prescribed limit as per said provisions, the AO has rightly rejected exemption u/s. 11 of the Act and assessed surplus in the status of AOP. The Ld. CIT(A) after rightly considering relevant facts, upheld the orders of the AO, and their order should be upheld. 7. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. Section 2(15) of the Act defines the word 'charitable purpose' which includes relief of the poor, education, medical relief, preservation of environment (including water sheds, forests and wild life) preservati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Patna High Court in the case of Bihar Institute of Mining and Mine Surveying vs CIT, 208 ITR 608 . 8. Having said so, let us come back to the arguments of the counsel for the assessee that the objects and activities of the trust is in the nature of relief of the poor as defined u/s. 2(15) of the Act. 'Relief of the poor' encompasses a wide range of objects for the welfare of the economically and socially disadvantaged or needy. It will, therefore, include within its ambit purposes such as relief to destitute, orphans or the handicapped, disadvantaged women or children, small and marginal farmers, artisans or senior citizens in need of help. In other words, relief of the poor means providing essential needs to the poor, without charging any fees or by charging a nominal fee. Therefore, entities who have those objects will continue to be eligible for exemption in the category of relief of the poor. If at all, the activity of the assessee i.e., running tuition centres can be considered under relief of the poor, then the assessee should prove with necessary evidence that it is giving admission to poor and eligible students of weaker section and also not charged fees i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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