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TMI Blog1993 (9) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... in object of the institute is to impart training to the trainers who in turn will impart training to the entrepreneurs. This is clear from the main object contained in the memorandum of association of the said institute which is reproduced hereunder : "4(a) to organise programmes and train trainers, motivators and other individuals drawn from different fields connected with entrepreneurship development and training; to identify, select and train potential entrepreneurs, draw up appropriate programmes for vocational and in plant training; to equip the selected trainees in setting up industrial and other ventures, including self-employment ventures, in different sectors; to impart orientation or training in industrial promotion, planning and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income-tax u/s 263 of the Act. The Commissioner observed in the said order that the assessee is not a public charitable trust since the benefit out of funds held under trust did not go to the members of public. It renders services to persons who pay the consultation fees. Since there is no charity involved, the contributions made by the sponsors and the Govt. of Gujarat amounting to Rs. 81 lakhs cannot be construed as voluntary contributions received by a trust created wholly for charitable or religious purpose towards the corpus. He also observed that out of Rs. 81 lakhs received towards corpus, Rs. 10 lakhs are from SBI. The balance sheet showed that a sum of Rs. 65,28,653 have been kept in savings bank account with SBI. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 and, therefore, the contributions received towards the corpus from FIs and Govt. of Gujarat cannot be treated as income liable to tax. 5. The assessee has preferred appeal against the order u/s 263 passed by the learned Commissioner. The revenue has preferred appeal against the order of the learned CIT(A) in relation to the fresh assessment made by the A.O. 6. Before us, the learned counsel for the assessee vehemently argued that the order passed by the Commissioner u/s 263 is wholly without jurisdiction. The institution is registered under the provisions of Registration of Societies Act as well at, under the provisions of the Bombay Public Trust Act. It has also been registered under sec. 12A of the I.T. Act, 1961 vide certificate dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business and has accepted the deposit in the normal course of its banking business. The SBI has not derived any benefit by accepting the deposit. Sec. 13(2)(ii) is applicable only if the benefit is derived by the settlor. Furthermore, the amounts invested with SBI is covered by one of the approved mode of investment prescribed u/s 11(5). Hence there is no violation of the provisions of sec. 13. He submitted that the institution qualifies for grant of exemption u/s 10(22) as well as u/s 11/12 of the Act. The contributions made by the FIs and the Govt. of Gujarat, aggregating to Rs. 81 lakhs are towards the corpus of the institution is apparent from the resolution passed by the governing body. The same by no stretch of imagination could be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rammes. The institution has been set up for achieving an important national objective, i.e. for imparting education to people at large in the field of development of entrepreneurship qualities. This is of prime importance in a country which is seeking rapid industrialisation especially in the backward areas. In order to achieve this national objective, the FIs including the SBI and the Govt. of Gujarat sponsored the said institute. The expression "educational purposes" referred to in section 2(15) and section 10(22) does not necessarily contemplate only University education but such expression used in the aforesaid provisions has very wide connotation which obviously includes such educational programmes of training to trainers for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n consultancy business. Since the profit motive is absent and such activity is being carried out for fulfilment of the primary object of conducting EDPs, the collection of such assignment fees would not in any manner adversely affect the assessee's claim for grant of exemption u/s 10(22) or u/s 11, read with section 12 of the I.T. Act. We are, therefore, of the considered opinion that the appellant is clearly entitled to grant of exemption u/s 10(22) as well as u/s 11, read with section 12 of the I.T. Act, 1961. 10.2 We also do not find any merit in the view taken by the learned CIT in the order u/s 263 that the contribution of Rs. 81 lakhs received from the FIs and Government of Gujarat should be treated as income. Such contributions have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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