9911796707
TMI Blog2023 (9) TMI 1536X X X X Extracts X X X X X X X X Extracts X X X X ..... , where after detailed discussion made on the issue in the light of various judgments including that of the Hon ble Apex Court, it has been held that the activities of the assessee qualify as general public utility activities. The ITAT also restored the issue to the AO to determine whether these general public utility activities are commercial in nature in the light of the directions laid down by the Hon ble Apex Court in this regard in the case of Ahmedabad Urban Development authority [ 2022 (10) TMI 948 - SUPREME COURT ] Thus, no infirmity in the impugned order of the CIT(A), holding the activities of the assessee as qualifying as general public utility activities, which we uphold. The issue is further restored back to the AO to decide the commercial nature of the activities in accordance with the direction given by the ITAT in the earlier years. Appeal of the assessee is partly allowed for statistical purposes. - SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER For the Appellant : Shri S.N. Divatia, AR For the Respondent : Shri Kamlesh Makwana, CIT-DR ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, there is delay in filing the present appeal. The applicant states that even the appeal before NFAC against the order of assessment u/s.144 r.w.s 144B passed on30/04/2021 for A.Y 2018-19 has been delayed for identical reasons. The applicant states that when a high pitched income has been assessed resulting into huge demand of Rs. 3,98,63,170/- and the past record indicates that such assessment is not justified, there cannot be intention to accept such an order and not preferred appeal against the same, especially when the institution is run by the State Govt. The ld.counsel for the assessee accordingly submitted that since the delay was caused due to bureaucratic issues, and therefore in order to advance substantial justice, the impugned delay in filing appeal before the Tribunal may be condoned. 3. After hearing both the parties, we find that the assessee is attributing the impugned delay of 178 days due to procedural delay on account of some bureaucratic issues like frequent changes/transfers of the concerned officers and staff of the assessee, change of counsel for the assessee etc. These reasons cannot be completely ignored because considering the quantum of delay, these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay of 178 days in filing of the present appeal. The order was pronounced in open court. 6. We now proceed to adjudicate the appeal of the assessee on merit. 7. In the appeal, the assessee has raised the following grounds: 1.1 The order passed by U/s.250 passed on 10.11.2021 by NFAC Delhi confirming that the activities of the appellant was not education but advancement of other public utilities u/s 2(15) so that the exemption u/s 11 was not admissible is wholly illegal, unlawful and against the principles of natural justice. 2.1 The Id. NFAC has grievously erred in law and or on facts in not considering fully properly the evidence/details produced and thereby confirming that the activities of the appellant was not education but advancement of other public utilities u/s 2(15) so that the exemption u/s 11 was not admissible and thereby assessing total income at Rs. 9,95,43,470/- 2.2 That the in the facts and circumstances of the Id. NFAC ought not to have held that the activities of the appellant was not education but advancement of other public utilities u/s 2(15) so that the exemption u/s 11 was not admissible. Thereby the Id. NFAC has grievously erred in law and or on facts in u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Others, allowing the appeals of the Revenue, holding that the activities carried out by the assessee are not in the nature of imparting education, but are in the nature of general public utility activities provided in the section 2(15) of the Act. However, the ITAT concluded that for the purpose of determining whether they are commercial in nature so as to preclude the assessee from the benefit of exemption under section 11 and 12, the issue was sent back to the AO for reconsideration in the light of the parameters laid down by the Hon ble Apex Court for the said purpose in the case ACIT vs Ahmedabad Urban Development Authority (2022) 449 ITR 1(SC). To bolster the findings, the ITAT also relied on various case laws including judgment of Hon ble Apex Court in the case of New Noble Educational Society Vs. CCIT, 448 ITR 594 (SC). Therefore, the ld.DR submitted that in view of the decision of the ITAT in the case of the assessee for earlier years cited (supra), the present appeal, raising identical issue, requires to be decided accordingly. 10. On the other hand, the ld.counsel for the assessee fairly conceded the factum of earlier decision of the Tribunal on the issue, in the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritable activity in terms of Section 2(15) of the Act. The learned CIT(A), on the other hand, holding that the activities qualify as imparting education and thus entitling the assessee to claim its income as exempt under Section 11/12 of the Act. 29. In view of the recent decision of the Hon ble Apex Court in the case of New Noble Educational Society (supra) wherein the interpretation of the term education was dealt with at length by the Hon ble Apex Court, arguments were heard by both the parties. Admittedly, the Hon ble Apex Court in the said decision has interpreted the term education in a narrower sense as imparting formal scholastic learning by way of systematic instruction, schooling or training given to the young. The arguments of the learned Counsel for the assessee before us is that this narrow interpretation was given only in the context of interpreting it for the purposes of Section 10(23C)(vi) of the Act which exempts income of Institutions existing solely for the purpose of education , which was the issue before the Hon ble Apex Court. The learned Counsel for the assessee has argued that the term education has not been interpreted by the Hon ble Apex Court for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st v. Commissioner of Income Tax15 in the following terms: 5. The sense in which the word education has been used in section 2(15) is the 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. All this in a way is education in the great school of life. But that is not the sense in which the word education is used in clause (15) of section 2. What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by formal schooling. Thus, education i.e., imparting formal scholastic learning, is what the IT Act provides for under the head of charitable purposes, under Section 2 (15). 31. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt has referred to the decision in the case of T.M.A Pai Foundation (supra) and its decision in the case of Loka Shikshana Trust (supra) consistently holding that education is to be given a narrow meaning as imparting scholastic learning in a systematic manner. The Hon ble Apex Court has not noted any inconsistency in this interpretation of the term education by it. Therefore also there arises no question as per the decision of the Hon ble Apex Court in the case of New Noble Educational Society (supra) for giving it a prospective operation. This contention of the learned Counsel for the assessee is, therefore, also rejected. As for the contention of the Ld.Counsel that its activities has consistently been held to be in the nature of imparting education in the past which position cannot now be disturbed, the same also merits no consideration since the nature of the activity being carried out has been determined in accordance with the interpretation by the Hon ble apex court whose interpretation of law is to read as the law always was. 33. In view of the above, we hold that the assessee is not engaged in the charitable activity of imparting education as defined under Section 2(15) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has clarified through illustrations what kind of services or goods provided on cost or nominal basis would normally be excluded from the mischief of trade, commerce, or business, in the body of the judgment. A.4 Section 11(4A) must be interpreted harmoniously with section 2(15), with which there is no conflict. Carrying out activity in the nature of trade, commerce or business, or service in relation to such activities, should be conducted in the course of achieving the GPU object, and the income, profit or surplus or gains must, therefore, be incidental. The requirement in section 11(4A) of maintaining separate books of account is also in line with the necessity of demonstrating that the quantitative limit prescribed in the proviso to section 2(15), has not been breached. Similarly, the insertion of section 13(8), seventeenth proviso to section 10(23C) and third proviso to section 143(3) (all with retrospective effect from 1-4-2009), reaffirm this interpretation and bring uniformity across the statutory provisions. 35. His contention in this regard is that the Assessing Officer has not treated the activities carried out by the assessee as commercial in the light of these guidel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general public utility activities in terms of Section 2(15) of the Act; and for the purpose of determining whether they are commercial in nature so as to disqualify them from being charitable activities in terms of first and second proviso to Section 2(15) of the Act, the matter needs reconsideration by the Assessing Officer in terms of the guidelines laid down by the Hon ble Apex Court in the case of AUDA (supra) for determining the commercial nature of such activities. For the said purpose all the appeals are restored back to the AO. The AO is directed to determine the same and thereafter determine the income liable to tax in accordance with law. 12. The ld.counsel for the assessee has not pointed out any disparity of facts of the earlier years with that of present year in appeal before us. Nor has he pointed out fate of the ITAT order being disturbed by any higher appellate authorities in further litigation. Therefore, in view of the above order of the ITAT, which had threadbare discussed the issue on hand, with the support of various judicial authorities, we do not find any infirmity in the impugned order of the ld.CIT(A), holding the activities of the assessee as qualifying as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
