Unique Educational Society, Ladwa V. CIT(E), Chandigarh

ITA 1052/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2941 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-07-2019
• Assessment Year: 2018-2019
• Appeal Filed On: 08-08-2018
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRISANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1052/CHD/2018 / ASSESSMENT YEAR : 2018-19 UNIQUE EDUCATIONAL SOCIETY, 7, HARDEV NAGAR, LADWA, DISTT. YAMUNANAGAR VS. ! THE CIT (EXEMPTION), CENTRAL REVENUE BUILDING, 5 TH FLOOR, SECTOR 17-E CHANDIGARH ' # ./ PAN NO: AAAAU1842K '$/ APPELLANT &' '$ / RESPONDENT ()*+ /ASSESSEE BY : SHRI ROHIT GOYAL , CA *+ / REVENUE BY : SHRI G.S. PHANI KISHORE, CIT DR , -*) .# /DATE OF HEARING : 30.07.2019 /0 *) .# / DATE OF PRONOUNCEMENT : 06.08.2019 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE APPELL ANT SOCIETY AGAINST THE ORDER DATED 30.06.2018 OF THE COMMISSI ONER OF INCOME TAX (EXEMPTIONS ) , CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(E)] AGITATING THE ACTION OF THE CIT(E) IN REJECTING THE APPLICATION OF THE APPELLANT- SOCIETY FOR REGISTRATION U/S 12A OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'), AS A CHARITABLE INSTITUTION . ITA NO. 1052-C-18 UNIQUE EDUCATIONAL SOCIETY, YAMUNANAGAR 2 2. A PERUSAL OF THE IMPUGNED ORDER OF THE CIT(E) RE VEALS THAT THE APPELLANT SOCIETY HAD APPLIED FOR REGISTRATION U/S 12A OF THE ACT PLEADING THAT IT HAS BEEN RUNNING A PRIVATE INDUSTR IAL TRAINING INSTITUTE, WHICH IS IMPARTING VOCATIONAL TRAINING TO THE STUDE NTS. THAT THE INSTITUTION HAS BEEN DULY RECOGNIZED BY THE GOVERN MENT OF HARYANA AND THE SAME IS AFFILIATED AND REGULATED BY NATIONA L COUNCIL FOR VOCATION TRAINING (IN SHORT NCVT), MINISTRY OF S KILL DEVELOPMENT AND ENTREPRENEURSHIP, GOVT. OF INDIA. HOWEVER, THE LD. CIT(E) REJECTED THE APPLICATION OF THE APPELLANT SOCIETY ON THREE COUNTS; FIRSTLY, MAINLY THAT GAINING OF THE KNOWLEDGE OF S KILL DO NOT QUALIFY FOR LABEL EDUCATION IN THE SENSE IN WHICH THE WORD E DUCATION HAS BEEN USED IN SECTION 2(15) OF THE ACT AND AS INTERPRETE D BY THE HON'BLE SUPREME COURT IN THE CASE OF SOLE TRUSTEE LOK SIKS HAN SANSTHAN 101 ITR 234, WHEREIN, IT HAS BEEN HELD THAT THE TERM E DUCATION MEANS A SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO THE YOUNG IN PREPARATION FOR THE WORK OF LIFE AND THAT IT CONNO TES THE HOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. THE LD. CIT(A) OBSERVED THAT THE WORD EDUCATION IS NOT USED IN T HAT WIDE AND EXTENDED SENSE, ACCORDING TO WHICH EVERY ACQUISITIO N OF FURTHER KNOWLEDGE CONSTITUTES EDUCATION. THAT THE ASSESSE E WAS INDULGED IN ACTIVITY OF MERELY SKILL ENHANCEMENT IN WHICH NO SY STEMATIC EDUCATION WAS INVOLVED. HE, THEREFORE, HELD THAT THE ACTIVIT Y OF THE ASSESSEE ITA NO. 1052-C-18 UNIQUE EDUCATIONAL SOCIETY, YAMUNANAGAR 3 WOULD NOT FALL IN THE DEFINITION OF EDUCATION I N THE SENSE, THE WORD EDUCATION HAS BEEN USED IN SECTION 2(15) OF THE ACT. SECONDLY, HE OBSERVED THAT THE APPELLANT SOCIETY W AS MERELY AN IMPLEMENTING AGENCY OF THE GOVERNMENT AND WAS BEING REIMBURSED FOR ITS ACTIVITIES WHICH CANNOT BE HELD TO BE A CHARITA BLE ACTIVITY, RATHER, THE ASSESSEE WAS DOING SUCH ACTIVITY FOR COMMERCIAL PURPOSES. THAT THE RECEIPTS OF THE ASSESSEE DID NOT PARTAKE THE CHARAC TER OF VOLUNTARY DONATIONS AND NEITHER THE SAME WAS INCOME FROM THE PROPERTY VESTED IN THE TRUST FOR CHARITABLE PURPOSES. THE LD. CIT(E) FURTHER OBSERVED THAT EVEN THE CONTRIBUTION TOWARDS CORPUS FUNDS BY THE M EMBERS OF THE SOCIETY HAS NOT BEEN CORROBORATED WITH BANK ENTRIES . THE THIRD OBJECTION RAISED BY THE LD. CIT(E) IS THA T THE APPELLANT SOCIETY HAD PURCHASED TWO CARS WHICH WERE MEANT FOR PERSONAL USE OF THE MEMBERS OF THE SOCIETY AND THAT SUCH PURCHASES DID NOT ENURE TO THE BENEFIT OF GENERAL PUBLIC AND THE UTILIZATION O F FUNDS TO THAT EXTENT WAS NOT FOR CHARITABLE PURPOSES. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORD. SO FAR AS THE FIRST AND FOREMOST OBSERV ATION OF THE LD. CIT(E) THAT THE ACTIVITY OF THE ASSESSEE WOULD NOT FALL WITHIN THE SCOPE OF TERM EDUCATION AS USED IN SECTION 2(15) OF THE ACT IS CONCERNED, THE LD. COUNSEL FOR THE APPELLANT IN THIS RESPECT HAS INVITED OUR ITA NO. 1052-C-18 UNIQUE EDUCATIONAL SOCIETY, YAMUNANAGAR 4 ATTENTION TO PAGE NOS. 52 & 53 OF THE PAPER BOOK. PAGE NO.52 IS THE COPY OF THE LETTER DATED 27.7.2012 OF THE GOVT. OF INDIA, MINISTRY OF LABOUR AND EMPLOYMENT, DIRECTORATE GENERAL OF EMPLO YMENT & TRAINING ISSUED UNDER THE SIGNATURES OF DIRECTOR(T) ADDRESSED TO THE STATE DIRECTORS / U.T. ADMINISTRATORS DEALING WITH CRAFTSMEN TRAINING SCHEME, WHEREBY, IT HAS BEEN CONVEYED THAT THE CASE OF THE APPELLANT ALONG WITH OTHERS WAS EXAMINED BY THE MEMBERS OF TH E SUB-COMMITTEE FOR NCVT AND THAT THE COMMITTEE AFTER EXAMINATION A PPROVED THE AFFILIATION OF THE CASES FOR CONFORMING TO THE NCVT NORMS. THE LIST OF SUCH INSTITUTION HAS BEEN MENTIONED, WHEREIN, THE N AME OF THE INSTITUTION NAMELY MAHATMA GANDHI PRIVATE ITI, DIS TT. YAMUNANAGAR RUN BY APPELLANT SOCIETY IS MENTIONED AT SR. NO.1. FURTHER, PAGE NO. 54 IS THE COPY OF THE LETTER DATED 10.8.2007 OF THE IN DUSTRIAL TRAINING & VOCATIONAL EDUCATION DEPARTMENT, GOVT. OF HARYANA, WHEREBY, THE GOVERNMENT HAS GIVEN APPROVAL TO THE APPELLANT SOC IETY FOR ESTABLISHMENT OF PRIVATE INDUSTRIAL TRAINING CENTRE IN THE NAME AND STYLE OF MAHATMA GANDHI INDUSTRIAL TRAINING CENTRE FOR RUNNING THE TRADES WITH AFFILIATION TO STATE COUNCIL FOR VOCATI ONAL TRAINING (SCVT). THE NAME OF TRADE AND THE UNITS APPROVED ARE MENTIO NED AS UNDER:- S.NO. NAME OF TRADE DURATION NO. OF UNITS ALREADY APPROVED INCREASE IN UNITS / UNITS IN NEW TRADE TOTAL UNITS. 1 COMPUTER OPERATOR PROGRAMMING 1 YEAR 1 1 2 (IN TWO SHIFTS) ITA NO. 1052-C-18 UNIQUE EDUCATIONAL SOCIETY, YAMUNANAGAR 5 ASSISTANT 2 FITTER 2 YEAR 1 1 2 (IN TWO SHIFTS) 3 PAINTER GENERAL 2 YEAR 1 1 2 (IN TWO SHIFTS) 4 ELECTRICIAN 2 YEAR 1 1 2 (IN TWO SHIFTS) 4. FURTHER, AS PER LETTER DATED 23.12.2016 OF THE MINISTRY OF SKILL DEVELOPMENT & ENTREPRENEURSHIP, NEW DELHI, THE APPE LLANT HAS BEEN EMPANELED AS ASSESSING BODY UNDER MODULAR EMPLOYAB LE SKILLS. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, HAS SUBMI TTED THAT THE APPELLANT HAS BEEN RUNNING THE VOCATIONAL TRAINING COURSE IN A SYSTEMATIC MANNER AND IS AFFILIATED AND REGULATED B Y NCVT AS WELL AS SCVT, HARYANA. THAT THE EXAMINATIONS ARE CONDUCTE D ON NATIONAL LEVEL AND DIPLOMA EQUIVALENT TO 10+2 DEGREE IS AWAR DED BY THE NCVT. THAT THE COURSES RUN BY THE APPELLANT BEING FOR PR OMOTION OF SKILL DEVELOPMENT AND TRAINING, CLASS ROOMS TEACHING AND TRAININGS ARE DESIGNED FOR GENERATION OF EMPLOYMENT OPPORTUNITIES FOR VILLAGE YOUTHS AND THE SAME HAVE BEEN DULY RECOGNIZED BY THE STAT E GOVERNMENT AS WELL AS CENTRAL GOVERNMENT. WE ARE CONVINCED THAT THE VOCATIONAL EDUCATIONAL / TRAINING PROGRAMME RUN BY THE APPELLA NT SOCIETY ARE SYSTEMATIC PROGRAMME IMPARTING CLASS ROOM AS WELL T RAINING WITH FOCUS ON EMPLOYMENT GENERATION. THE EDUCATION GIVEN BY TH E APPELLANT, IN OUR VIEW, CAN SAFELY BE SAID TO BE IN THE MODE OF S YSTEMATIC INSTRUCTIONS / SCHOOLING OR TRAINING GIVEN TO THE Y OUNG IN PREPARATION ITA NO. 1052-C-18 UNIQUE EDUCATIONAL SOCIETY, YAMUNANAGAR 6 FOR THE WORK OF LIFE AND, IN OUR VIEW, DULY FALL WI THIN THE PURVIEW AND SCOPE OF THE TERM EDUCATION AS USED IN SECTION 2( 15) OF THE ACT. 5. SO FAR AS THE OBSERVATION OF THE CIT(E) THAT THE INCOME OF THE ASSESSEE IS NOT FROM VOLUNTARY DONATION OR THAT TH E SAME CANNOT BE SAID TO BE INCOME FROM PROPERTY HELD UNDER THE TRUST IS CONCERNED, WE ARE NOT CONVINCED WITH THE ABOVE OBSERVATION OF THE LD. CIT(E) FOR REJECTING THE CLAIM OF THE APPELLANT TRUST. THE APP ELLANT TRUST IS REIMBURSED THE AMOUNT SPENT BY THE GOVERNMENT FOR C ARRYING OUT ITS EDUCATION / TRAINING PROGRAMME AS PER THE SKILL DE VELOPMENT PROGRAMME OF THE GOVERNMENT. THUS, IN OUR VIEW, IT CAN BE SAFELY SAID TO BE INCOME GENERATED FROM THE ACTIVITY OF THE APP ELLANT TRUST AND THE SAID ACTIVITY AS OBSERVED ABOVE, FALLS WITHIN THE P URVIEW AND SCOPE OF CHARITABLE PURPOSE. IT IS NOT BE CASE OF THE CIT(E) THAT THE MAJOR OR MAIN ACTIVITY OF THE APPELLANT TRUST IS TOWARDS COM MERCE OR BUSINESS. THE RECEIPT OF INCOME, IN OUR VIEW, IS IN THE COURS E OF CARRYING OUT OF EDUCATIONAL ACTIVITY OF THE ASSESSEE. 6. THE THIRD OBJECTION RAISED BY THE LD. CIT(E) IS THAT THE APPELLANT COULD NOT CORROBORATE THE RECEIPTS TOWARDS THE CORP US FUNDS FROM THE MEMBERS OF THE TRUST WITH BANK ENTRIES. IN OUR VIEW , THIS CANNOT BE GROUND FOR REJECTION OF THE APPLICATION U/S 12A OF THE ACT. THE APPELLANT HAS SHOWN THE RECEIPTS TOWARDS ITS CORPUS FUNDS FROM THE MEMBERS OF THE TRUST AND THE SAME HAS BEEN DULY REC ORDED IN THE BOOKS ITA NO. 1052-C-18 UNIQUE EDUCATIONAL SOCIETY, YAMUNANAGAR 7 OF ACCOUNT. IT MAKES NO DIFFERENCE IF THE RECEIPTS WERE RECEIVED IN CASH OR THROUGH BANKING CHANNEL. MOREOVER, WHETHER THE R ECEIPTS ARE TOWARDS CORPUS FUNDS OR FOR APPLICATION IS TO BE SEEN AT TH E TIME OF ASSESSMENT. 8. SO FAR AS THE EXPENDITURE ON TWO CARS IS CONCERN ED, THE LD. COUNSEL OF THE APPELLANT HAS EXPLAINED THAT THE SAI D CARS ARE USED BY THE SOCIETY FOR ITS ACTIVITIES AS THE SOCIETY MEMBERS H AVE TO TRAVEL BETWEEN DELHI AND CHANDIGARH FOR MEETINGS AND REVIEW OF ITS WORK DONE BY THE CENTRAL / STATE GOVERNMENT AND FURTHER THAT THE SAI D EXPENDITURE IS COMPLETELY RELATED TO THE ACTIVITIES AND OBJECTS OF THE APPELLANT SOCIETY. 9. THE LD. DR HAS MADE A FURTHER ARGUMENT THAT THE APPELLANT IS ALSO INDULGING IN SKILL DEVELOPMENT PROGRAMME UNDER PRAD HAN MANTRI KAUSHAL VIKAS YOGNA (PMKVY) AND THAT THIS PROGRAMM E IS A SHORT DURATION PROGRAMME AND CANNOT BE SAID TO BE A SYSTE MATIC EDUCATION PROGRAMME. MAY IT BE SO, APART FROM PROVIDING THE L ONG TERM COURSE OF ONE YEAR OR TWO YEARS AS MENTIONED ABOVE, SINCE THE APPELLANT SOCIETY HAS SKILLED INSTRUCTORS FOR PROVIDING VOCATIONAL TR AINING TO THE STUDENTS AND IF THE APPELLANT INSTITUTION HAS ALSO BEEN IMPA RTING TRAINING UNDER THE PRADHAN MANTRI KAUSHAL VIKAS YOGNA, THAT ITSELF , CANNOT BE SUFFICIENT TO HOLD THAT THE APPELLANT SOCIETY HAS D ONE ANY ACTIVITY IN VIOLATION OF ITS OBJECTS. ITA NO. 1052-C-18 UNIQUE EDUCATIONAL SOCIETY, YAMUNANAGAR 8 10. IN VIEW OF THE OBSERVATIONS MADE ABOVE, THE IM PUGNED ORDER OF THE CIT(E) IS SET ASIDE AND THE LD. CIT(E) IS FU RTHER DIRECTED TO GRANT REGISTRATION TO THE APPELLANT SOCIETY U/S 12A READ WITH SECTION 12AA OF THE ACT IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF THE ACT. IN THE RESULT, THE APPEAL OF APPELLANT SOCIETY STAN DS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.08.2019. SD/- SD/- ( . . / N.K. SAINI) ( ! / SANJAY GARG) '#$ / VICE PRESIDENT %& / JUDICIAL MEMBER DATED : 06.08.2019 .. 2*&)3454) / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. &' '$ / THE RESPONDENT 3. , 6) / CIT 4. , 6) ( )/ THE CIT(A) 5. 47 &)8 , . 8 , 9:;< / DR, ITAT, CHANDIGARH 6. ;= - / GUARD FILE 2 , / BY ORDER, > / ASSISTANT REGISTRAR