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TMI Blog1984 (9) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ty at Rs. 40,769. He observed that originally the assessee had filed its returns declaring losses but subsequently the returns were amended. The departmental representative further invited our attention to the request of the assessee for rectification under section 154 of the Act for giving set off of losses of earlier years. The ITO, by his order dated 23-10-1978, held that the claim cannot be allowed as the assessee has only income from property during the assessment year. The ITO further held that if there is any business profit, the business loss is to be given set off and, therefore, the assessee's application is treated as filed. 4. The departmental representative explained that the correctness of this order was challenged in appeal before the AAC, who held that the assessee is entitled to carry forward and set off of the earlier years' losses. The AAC also held that the income of the assessee is exempt under section 10(22). 5. The departmental representative submitted that on both the issues, the AAC is not right in law. As far as the carry forward of loss is concerned, the assessee did not claim the same in the return against the column provided therein. Further, the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment years 1972-73 to 1975-76 was nil, as the assessee itself felt that these would be reimbursements to the extent of the loss from the State Government. Shri Kaji's contention was that the property income, though assessed under Chapter IV-C, really constitutes business income and, therefore, the previous losses should be set off against the income from property. He referred to the case law to show that the various heads of income do not delimit the sources of income and that income assessable under a head other than the business nevertheless can constitute income from business. Accordingly, it was submitted that all the conditions for set off of the previous losses are fulfilled. 9. As mentioned in para 7 above, we hold that the ITO was duty bound to examine his record for deciding whether the previous years' losses are available for carry forward and set off. Examined from this point of view, there can be no doubt that such losses were actually determined. It is equally clear that the business from which such losses arose, was in existence in the accounting year. To this extent, we agree that the ITO was duty bound to examine the question. 10. The second aspect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to each other. Thus, all the objects do not fall under the category of educational purpose. Particular reference was made to object No. (iii), which visualises the assessee's functioning as a focussing centre on non-official opinion on various subjects affecting the movement and for representing it in proper quarters. Reference was also made to object No. (viii), which is to run a printing press. Even the remaining objects do not fall under the category of educational institutions because there is no school as such. Object No. (i) deals with education to members of the co-operative societies and to workers in the co-operative movement. Object No. (ii) deals with the aspect of acting as a co-ordinating agency on all matters pertaining to co-operative education and function as body of experts in the matters relating to education. Object No. (iv) does not deal with education but with the spread of the co-operative movement, which is different from education. Object No. (v) also seeks to promote the study of problems connected with co-operation and research in the same. Object No. (vi) is of a general nature and deals with opening circulating libraries, publication of periodicals, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a member of the board. Shri Kaji further submitted that the objects are to be seen as a whole. Consequently, the object regarding the printing press would be only an ancillary object. The learned representative further invited our attention to para 5 of the order of the Commissioner (Appeals) and Annexure A, as also to para 6 of the order of the Commissioner (Appeals), which shows that by and large there is a loss in the press and there is an exceptional surplus only in one year. Shri Kaji further pointed out that according to the constitution as also in terms of section 115 of the Co-operative Societies Act, 1912, distribution of the surplus, if any, amongst the members is not permitted. On winding up, the funds go to similar institutions. Reliance was placed on Secondary Board of Education v. ITO [1972] 86 ITR 408 (Ori.), Governing Body of Rangaraya Medical College v. ITO [1979] 117 ITR 284 (AP) and Addl. CIT v. Surat Art Silk Cloth Mfrs. Association [1980] 121 ITR 1 (SC). 16. At this stage of the hearing, we invited the attention of Shri Kaji to the observations of the ITO in para 11 of his order for the assessment year 1976-77, wherein the ITO has taken up the entire gamut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have no reason to give a different meaning to the words occurring in section 10(22). Examined from this point of view, we cannot say that the various objects mentioned by the Commissioner (Appeals) in para 3 of his order reproduced below : " (i) to impart education to members of co-operative societies and to workers in the co-operative movement ; (ii) to act as a co-ordinating agency on all matters pertaining to co-op. education and function as a body of experts in the matters relating to education ; (iii) to function as a focussing centre on non-official opinion on various subjects affecting the movement and for representing it in proper quarters ; (iv) to further the spread of the co-operative movement ; (v) to promote the study of problems connected with co-operation and carry on research in the same ; (vi) to open circulating libraries, to publish periodicals, books and pamphlets and literature in general on co-operation, rural development and allied subjects ; (vii) to conduct training classes, training centres, schools, colleges, prescribe courses of instruction for them, conduct examinations and award certificates or diplomas ; and (viii) to run a printing press ; " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng much beyond the narrow compass of mere scholastic instruction. The question as to the extent of the area covered by education would naturally be decided by the Court in each case but it is the well settled law in India and England for several decades that the word is not limited in its character to mere scholastic instruction. The concept of education, as explained in the observations of Khanna J., is not supported by any judgment of the Supreme Court in India or the Appellate Courts in England. The Court of Appeal in England has in the case of Incorporated Council of Law Reporting for England and Wales v. Attorney General 47 Tax Cases 321 sufficiently dealt with the scope of the word 'education' and the Supreme Court has not expressed any dissent from that case nor is it referred to in the judgment. As the issue of what constitutes education generally, as opposed to the issue whether the activities of that particular trust constituted education, was not before the Supreme Court, the observations cannot be construed as laying down the law on what constitutes 'education' generally in the context of charitable purpose. I-1-21. We, therefore, recommend that an explanatory definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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