9911796707
TMI Blog2023 (2) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... d in observing that assessee is providing services to its parent company and not imparting education in India. 5. The CIT (E) has erred in discarding the strict compliance to section 25 Companies, monitored by RBI from time to time. 6. The CIT (E) has failed to appreciate that at the time of registration of 12AA and 80G only nature of objects and genuineness of the activities are to be considered. 11. The CIT (E) has failed to appreciate that for granting the registration of 80G it is application of income which is relevant not receipt of the same. 12. That on the facts and under the circumstances of the case the order of CIT (E) is perverse as the same has been passed overlooking the directions of the Hon'ble ITAT, submissions of the assessee and documentary evidences produced by appellant." 3. The assessee filed applications on dated 27/09/2012 in Forms No. 10A & 10G seeking registration u/s 12AA and also exemption u/s 80G of the Income Tax Act, 1961 ('Act' for short). During the course of proceedings, the Ld. CIT(E) of the opinion that the activities of the assessee falls under the residual category of 'general public utility' and not under the category of 'edu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. 9. During the first round of litigation the Co-ordinate Bench of the Tribunal while remanding the matter to the file of CIT(Exemption) has observed as under:- "The limited issue here is whether the activity of the assesses falls under the category of "education" and not general public utility". The Id CIT(E) has heavy relied on the decision of the Hon'ble Supreme Court in Lok Shikshana Trust 101 ITR 234. He was of the view that there is no class room teaching as formal schooling and not the activity as 'education" as envisages by the assesses. The Hon'ble Delhi High Court had an occasion to consider in 357 ITR 265 that whether a society teaching and promoting form of music and dance, western, Indian or any other which runs like school or educational institute in a systematic manner in regular classes vacations, attendance and enforcement of discipline is in "education'' or not. Though it did not conduct its own examination or awarded degrees the Hon'ble High Court held that it meets the requirement of educational institute. Similarly, in DIT(E) Vs. Samudra Institute Of Maritime Studies Trust 369 ITR 645 the Hon'ble Bombay High Court had an occasion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observing that 'the Assessee's activities are prima facie educational' and directed the Ld.CIT (Exemption) to consider the case of the assessee afresh. 10. After the remand by the Tribunal, the CIT(Exemption) while passing the order impugned and rejecting the registration u/s 12AA and also the exemption u/s 80G, observed as under:- 8. "The reply of the assessee has been considered but is not found acceptable due to the following reasons: 8.1 The activities of the assessee does not qualify under the limb 'Education' as discussed in detail in para 4 above. Further, in the case of CIT(E) vs. Fertilizers Association of India, the activities of rendering service were incidental to the objects of the assessee, whereas in the present case it is not an incidental activity but the main activity of the assessee. When the main activity of the assessee itself is in the nature of providing services to NOLS USA, the ratio of said decision of Hon'ble High Court would not apply. The applicant submitted various accreditation and accomplishments of Mr. Ravi Kumar, Director of company but the same does not have prove that the activities of the applicant are in the nature of 'Education'. 8.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the lending source and teacher of wilderness skills and leadership that serve people and the environment. 2. To instruct students in wilderness related educational topics 3. To conduct research and product publications on environmental conservation, wilderness skills, risk management and leadership 4. To collaborate with local entities including researchers, educators, governmental and non-governmental organizations to achieve the main objects. 5. No objects of the Company will be carried out without obtaining prior approval no objection certificate from the concerned authorities wherever requited. 6. None of the objects of the company will be carried out on commercial basis. 12. A plain reading of the object of the Company reveals that the assessee is having the object to carry out the activities of 'education' and there is a specific bar/Clause that 'none of the object of the Company will be carried out on commercial basis'. It is also found that the assessee Company is engaging in imparting education in the field of mountaineering, rafting high attitude trekking, wilderness medicines and wilderness first aid. The assessee has produced the materials to show t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution; and the compliance of such requirements of any other law for the time being in force by the trust or institution, as are materials for the purpose of achieving its objects, and he may also make such inquiries as he may deem necessary in this behalf. Once he is satisfied about the objects of the trust or institution, and genuineness of its activities, he shall pass an order under the said provision..." 15. Further, the Hon'ble Allahabad High Court in the case of CIT v Red Rose School [2007] 163 Taxman 19 (Allahabad) held that: "Section 12AA, which lays down the procedure for registration, does not speak anywhere that the Commissioner, while considering the application for registration, shall also see that the income derived by the trust or the institution is either not being spent for charitable purpose or such institution is earning profit. The language used in thesection only requires that activities of the trust or the institution must be genuine, which accordingly would mean that they are in consonance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relatives who have substantial interest in the society? (iii)Whether on the facts and in law, the Hon'ble Income Tax Appellate Tribunal was justified in allowing registration u/s 12A to the assessee, when the Applicant Institution was carrying out the activities for the benefits of persons having substantial interest in the garb of 'charitable activity'? The above-said substantial questions of law were also raised in ITA No.701 of 2010 decided on 05.10.2011 wherein it has been held that while granting registration under Section 12 AA of the Income Tax Act, 1961, the genuineness of the Trust are relating to income and expenses to be examined and questions are required to be examined while filing assessment. 18. In view of the above discussion and by following the principal laid down by the various decisions (supra), we are of the opinion that, the Ld. CIT(E) has committed an error in not granting registration in the u/s 12AA read with Section 80G of the Act. Therefore, we allow the Grounds of Appeal in ITA No. 978 & 979/Del/2022 and further direct the Ld. CIT(E) to grant registration to the assessee u/s 12AA of the Act and also grant approval of registration u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
