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TMI Blog2022 (5) TMI 1498X X X X Extracts X X X X X X X X Extracts X X X X ..... A) 10, Pune S order dated 11.09.2017 passed in case No. PN/CIT (A)-10/ITO(E)/Wd2/164/15-16, involving proceedings under Section 143(3) of the Income Tax Act, 1961 in short the Act. Case called twice. None appears at assessee s behest. Nor has anybody filed vakalath on behalf of the assessee till date. It is accordingly proceeded as exparte. 2. Coming to the assessee s sole substantive grievance that the learned lower authorities have erred in law and on facts in treating it as not eligible for Section 11 r.w.s. 2(15) exemption, we find that the CIT(A) s detailed discussion has taken into consideration all of its activities to have been run on commercial lines as follows: - Ground No.1, 3 and 4 (i) These grounds relate to challenging the findings of A.O., wherein, the A.O. has not treated the activity of the appellant as Education within the main limb of charitable purpose as defined u/s 2 (15) of I.T. Act, but has carried over it under the fourth limb of general public utility. While challenging the findings of A.O., the A.R. of the appellant explained the issue as under: The Trust has written a script of the drama Janata Raja [means an intelligent King who und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced by the learned Assessing Officer in the impugned assessment order) objected to the aforesaid contention but the same have been rejected without properly appreciating the objections of the appellant. The appellant submits that the submissions dt.21/ 12/2015 referred above may also be treated as submissions made during the present appellate proceedings. The appellant most respectfully submits that the learned Assessing Officer has lost sight of the decision of the Hon. Supreme Court in the case of C.I.T. v/s Potdar Cement Pvt Ltd reported in 226 I.T.R. Page 625 wherein the Hon. Supreme Court has held as under: At this juncture, we can also refer to the judgment cited by Mr. Syali regarding updating construction of the words used in the statute. In State (Through CBI/New Delhi) v. S.J. Choudhary, AIR 1996 SC 1491, 1494; [1996J 2 SCC 428, this court has quoted the following passage with approval in support of updating construction (page 433 of [1996] 2 SCC): Statutory Interpretation by Francis Bennion, 2nd edn. section 288 with the heading 'Presumption that updating construction to be given' states one of the rules thus (page 617) (2) It is presumed that P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes charitable purpose to include the following (i) Relief of the poor (ii) Education (iii) Medical relief (iv) and advancement of any other object of general public utility An entity with a charitable object of the above nature is eligible for exemption from tax under section 11 of I.T. Act. However, it was seen that a number of entities who were engaged in commercial activities were also claiming exemption on the ground that such activities were for the advancement of objects of general public utility in terms of the fourth limb of the definition of charitable purpose. Therefore, section 2(15) was amended vide finance Act 2008 by adding a proviso which states that the advancement of any other object of general public utility shall not be charitable purpose, if it involves the carrying of any activity In the nature of trade, commerce, or business or any activity of rendering any serV1ce In relation to any trade, commerce or business for a cess or fee or any other consideration irrespective of the nature of use or application or retention of the income from such activity. Several implications have arose from this amendment. The newly inserted proviso will not apply i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 54 TC 413 (HL) it was held that it cannot be whittled down by narrow sense. This is for the simple reason that the education takes verity of form and it can not be restricted to a particular form and manner. This expression is not amenable to any fixed or rigid formulae. In the case of D.V. Arur vs CIT 13 ITR 465 H'ble Bombay High Court held it, In my opinion, looking at the definition in the various acts, a charitable purpose which is not of a religious character must contain the element of benefiting the public, so that a trust, the object and scope of which is limited to the education of the members of the family would not come within the definition of a charitable purpose contained in I.T. Act. H'ble Supreme Court in the case of MCD vs Children Book trust 63 taxman 385 (1992), while considering section 115(4) of the Delhi Municipal Corporation Act 1957 held that the imparting of education must involve public benefit so as to fall within the meaning of charitable object. As per explanation to section 115(4) (a) of the Delhi Municipal Corporation Act. 1957, charitable purpose includes relief of the poor, education and medical relief but does not include a purpose that r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in view the aforesaid major objective. (vi) In fact, while denying the benefit of section 11 of IT. Act, the A.O also emphasized on the fact that the predominant activity of the appellant is General public utility and not the education and accordingly, applied the proviso to section 2(15) of IT. Act considering the charging of fee as commercial activity with profit motive. As can be seen from the above and rightly pointed out by A.O. also, the predominant object of the trust is not education and it does not deserve to be included in the main limb of education within the meaning of section 2(15) of IT. Act. The impugned activity has also not found a place in the object of the trust as enumerated above on the basis of which it was granted registration u/s 12A of IT. Act. It does not satisfy the condition as laid down by H'ble Supreme Court in the case of Sole Trustee Cited (Supra). Regarding, appellant's contention that due to modernization, the methods and technique of education at every level are witnessing unprecedented changes. The effect of audio / visual impact on the student is effective and is appreciated and accepted all over the world. No doubt, with change of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng jobs or earning income etc. There are plethora of case laws, wherein, similar kind of activities have been treated as in the nature of general public utility only and no benefit of main limb of either education or medical relief has been given. These are as under: (a) To promote commerce, art and science held charitable program under the fourth limb South Indian photography and allied trades association 166 ITR 166 (Mad) 1987. (b) Promotion of social, education, and industry held as charitable purpose falling under advancement of general public utility Dharmaposhanam Company 114 ITR 463 (S.C.)1978. (c) Conducting music programme as per the traditional mUSIC of Tamilnadu falls under advancement of general utili ty in the case of Hammsadhawani Vs DIT (Exempt) 50 SOT 89, Chennai ITAT-2012. (vii) Therefore, considering the above facts and legal position on this issue, I am inclined to upheld the view of A.O., wherein, the activity of the appellant has not been treated as education under the main limb as defined in Section 2 (15) of 1.T. Act. I agree with the view of A.O. that the impugned activity squarely falls under the category of advancement of any other general publ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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