DDIT, CHENNAI V. Madras Management Assn., CHENNAI

ITA 1059/CHNY/2014

• Counselvise Citation: 105921714 RSA 2014
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: J SREE VIDYA; PUSHYA SITARAMAN
• Keywords: Charitable institution
• Section: 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , ! , ' # BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ ITA NOS. 1059 & 1060/MDS/2014 / ASSESSMENT YEARS : 2009-10 & 2010-11 THE DEPUTY DIRECTOR OF INCOME-TAX(EXEMPTIONS)-III, CHENNAI 34. APPELLANT) V. M/S. MADRAS MANAGEMENT ASSN. NO.21,11, 3 RD CROSS STREET, SEETHAMMAL EXTENSION, TEYNAMPET, CHENNAI 600018. PAN AAATH5522B RESPONDENT) / APPELLANT BY : SHRI A.V.SREEKANTH, JCIT / RESPONDENT BY : MS. PUSHYA SITARAMAN, SR. ADVOCATE & MS. J. SREE VIDYA, ADVOCATE ! / DATE OF HEARING : 28.01.2015 '# ! / DATE OF PRONOUNCEMENT : 20.03.2015 $ / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEALS HAVE BEEN FILED BY THE REVENUE FOR THE ASSESSMENT YEARS 2009-10 AND 2010-11 AGAINST THE OR DER OF THE - - ITA 1059 & 1060/14 2 COMMISSIONER OF INCOME-TAX(APPEALS)-VII, CHENNAI DA TED 18.12.2013 COMMON FOR BOTH THE IMPUGNED ASSESSMENT YEARS. 2. THE APPEALS HAVE BEEN FILED WITH THE DELAY OF 6 DAYS. AN AFFIDAVIT CITING REASONS FOR DELAY IN FILING OF THE APPEALS HAS BEEN FILED. WE HAVE PERUSED THE SAME. THE REASONS FO R DELAY IN FILING OF THE APPEALS HAVE BEEN SUFFICIENTLY EXPLAI NED. ACCORDINGLY, THE DELAY OF 6 DAYS IN FILING OF THE A PPEALS IS CONDONED AND THE APPEALS ARE ADMITTED TO BE HEARD O N MERIT. 3. THE FACTS AS EMANATING FROM THE RECORDS ARE: TH E ASSESSEE IS A TRUST REGISTERED U/S.12A(A) OF THE I NCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) SINCE 1 980. THE ASSESSING OFFICER WHILE COMPLETING THE SCRUTINY ASS ESSMENT FOR THE ASSESSMENT YEAR 2009-10 HELD THAT SINCE THE ASS ESSEE IS NOT IMPARTING FORMAL EDUCATION IT IS NOT COVERED BY THE PROVISIONS OF SECTION 2(15) OF THE ACT. THE A.O. THUS HELD THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM THE BENEFIT OF SEC.11 OF THE ACT. IN THE ASSESSMENT YEAR 2010-11, THE ASSESSING OFFICER VIDE ORDER DATED 21.1.2013, HELD THAT OBJECTS OF THE ASSESSEE FALL WITHIN THE AMBIT OF GENERAL PUBLIC UTILITY. SINCE THE ASSES SEE HAS VENTURED IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS DURING THE - - ITA 1059 & 1060/14 3 RELEVANT YEAR AND HAS RECEIVED FEES AS CONSIDERATIO N FOR SERVICES RENDERED IN EXCESS OF ` 10 LAKHS, THE PROVISO TO SEC.2(15) ARE INVOKED. AGGRIEVED BY THE ASSESSMENT ORDERS IN THE RESPECT IVE ASSESSMENT YEARS, THE ASSESSEE PREFERRED APPEALS BE FORE THE COMMISSIONER OF INCOME-TAX(APPEALS). THE COMMISSIO NER OF INCOME-TAX(APPEALS) AFTER EXAMINING THE OBJECTS, TH E ACTIVITIES BEING CARRIED OUT BY THE ASSESSEE AND THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF AHME DABAD MANAGEMENT ASSOCIATION VS. JDIT 28 ITR(TRIB.) 349, HELD THAT THE ACTIVITIES OF THE ASSESSEE ARE COVERED BY ONE O F THE MAIN LIMBS OF CHARITABLE PURPOSE, I.E. EDUCATION. HE FURTHER HELD THAT THE ASSESSEE IS ELIGIBLE FOR CLAIMING EXEMPTION U/S .11 OF THE ACT AND ALLOWED THE APPEALS OF THE ASSESSEE FOR BOTH TH E ASSESSMENT YEARS. AGAINST THESE FINDINGS OF THE FIRST APPELLATE AUT HORITY, THE REVENUE HAS FILED APPEALS FOR BOTH THE ASSESSMENT Y EARS BEFORE THE TRIBUNAL. 4. SHRI A.V.SREEKANTH, REPRESENTING THE DEPARTMENT, SUBMITTED THAT THE ASSESSEE IS NOT ENGAGED IN PROVI DING - - ITA 1059 & 1060/14 4 STRUCTURED EDUCATION PROGRAMME. TO FALL WITHIN TH E FIRST LIMB OF DEFINITION OF CHARITABLE PURPOSE U/S.2(15), THE A SSESSEE IS REQUIRED TO PROVIDE FORMAL EDUCATION. WHEREAS, IN THE PRESENT CASE, THE ASSESSEE IS NEITHER PROVIDING FORMAL EDUC ATION NOR IS INSTRUMENTAL IN AWARDING DEGREES OR CERTIFICATES FR OM ANY RECOGNIZED UNIVERSITIES/INSTITUTIONS. THE LD. DR, IN ORDER TO SUPPORT HIS SUBMISSIONS DRAWS OUR ATTENTION TO PAGE NOS. 100, 106 AND 117 OF THE PAPER BOOK FILED BY THE ASSESSEE TO SHOW THAT THE ASSESSEE IS ONLY COLLECTING FEES BY ORGANI ZING SOME SEMINARS, WORKSHOPS AND SHORT COURSES. THE COURSES / WORKSHOPS/SEMINARS ARE OPEN FOR PUBLIC AT LARGE. T HE ONLY BENEFIT EXTENDED BY ASSESSEE TO ITS MEMBERS IS CONC ESSIONAL OR DISCOUNTED FEES FOR ATTENDING/PARTICIPATING IN SUCH PROGRAMMES. THE LD. DR VEHEMENTLY DEFENDED THE ASSESSMENT ORDER AND PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER. 5. MS. PUSHYA SITARAMAN AND MS. J. SREE VIDYA, APPE ARING ON BEHALF OF THE ASSESSEE, STRONGLY SUPPORTED THE I MPUGNED ORDER. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS RECEIVING GRANTS FROM OVERSEAS IN ORDE R TO ACHIEVE ITS OBJECTIVES. THE OBJECTS OF THE ASSESSEE-SOCIET Y ARE TO - - ITA 1059 & 1060/14 5 PROMOTE RESEARCH AND DEVELOPMENT OF HIGHER EDUCATIO N IN PROFESSIONAL MANAGEMENT ON SCIENTIFIC LINES. THE A SSESSEE IS ORGANIZING LECTURES, CONFERENCES, SEMINARS ETC. TH E LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS AFF ILIATED TO ALL INDIA MANAGEMENT ASSOCIATION (AIMA). THERE ARE MOR E THAN 60 RELIGION AFFILIATES OF AIMA IN INDIA. ONE OF THE A IMAS WESTERN REGION AFFILIATE IS AHMEDABAD MANAGEMENT ASSOCIATIO N. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF AH MEDABAD MANAGEMENT ASSOCIATION HAS HELD THAT THE ACTIVITIES OF THE ASSESSEE FALL WITHIN THE DEFINITION OF CHARITABLE PURPOSE IN TERMS OF SECTION 2(15) AND THUS, THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 11. THE HONBLE GUJARAT HIGH COURT H AS AFFIRMED THE SAID DECISION OF THE TRIBUNAL. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT TH AT THE ASSESSEE IS ENJOYING BENEFIT OF SEC.12A(A) OF THE ACT SINCE 1980. THE ASSESSEE IS CARRYING ON ITS CHARITABLE ACTIVITIES V IZ. PROVIDING EDUCATION IN ACCORDANCE WITH ITS OBJECTS. THE STAT US OF THE ASSESSEE AS CHARITABLE ORGANIZATION HAS BEEN ACCEPT ED BY THE - - ITA 1059 & 1060/14 6 DEPARTMENT RIGHT FROM THE BEGINNING. FOR THE FIRS T TIME IN ASSESSMENT YEAR 2009-10, ACTIVITIES AND THE OBJECTS OF THE ASSESSEE WERE QUESTIONED. 7. THE STAND OF THE REVENUE IS THAT THE ASSESSEE IS NOT PROVIDING ANY CHARITABLE ACTIVITY AND IF AT ALL, TH E ACTIVITIES CARRIED OUT BY THE ASSESSEE ARE CHARITABLE IN NATURE, IT IS NOT FOR THE PURPOSE OF EDUCATION BUT FALL WITHIN THE AMBIT OF GENERAL PUBLIC UTILITY. SINCE, THE ASSESSEE HAS BEEN RECEIVING FEES AS CONSIDERATION FOR THE SERVICES RENDERED, WHICH ARE IN EXCESS OF ` 10 LAKHS, THE ASSESSEE IS NOT ELIGIBLE TO CLAIM BEN EFIT U/S.11 OF THE ACT. WHEREAS, THE CASE OF THE ASSESSEE IS THAT CHARITABLE ACTIVITIES CARRIED OUT BY THE ASSESSEE ARE IN THE N ATURE OF EDUCATION. THE LD. COUNSEL FOR THE ASSESSEE DRAWS SUPPORT FROM THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN T HE CASE OF DIT(E) V. AHMEDABAD MANAGEMENT ASSOCIATION, REPORTE D AS 366 ITR 85. 8. THE ASSESSEE HAS FILED PAPER BOOK CONTAINING MEMORANDUM OF ASSOCIATION OF THE ASSESSEE AS WELL A S AHMEDABAD MANAGEMENT ASSOCIATION. A PERUSAL OF THE OBJECT CLAUSE OF BOTH THE ASSOCIATIONS SHOWS THAT BOTH THE ASSOCIATIONS - - ITA 1059 & 1060/14 7 HAVE SIMILAR OBJECTS. BOTH THE ASSOCIATIONS ARE AF FILIATED TO AIMA. THE QUESTION, WHETHER THE ASSESSEES ACTIVIT IES ARE IN THE FIELD OF EDUCATION AND THAT THE ASSESSEE IS ELIGIBL E FOR EXEMPTION U/S.11 OF THE ACT WAS RAISED BEFORE THE AHMEDABAD B ENCH OF THE TRIBUNAL IN THE CASE OF AHMEDABAD MANAGEMENT ASSOCI ATION. THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE. THE REVENUE WENT IN APPEAL BEFORE THE HON'BLE HIGH COUR T. THE HIGH COURT AFFIRMED THE FINDINGS OF THE TRIBUNAL AN D OBSERVED AS UNDER:- 5.4. NOW, WHILE CONSIDERING WHETHER THE ACTIVITIES OF THE ASSESSEE CAN BE SAID TO BE EDUCATIONAL ACTIVITIES O R NOT THE DECISION OF THIS COURT AS WELL AS THE HON'BLE T HE SUPREME COURT IS REQUIRED TO BE REFERRED TO AND CONSIDERED. IN THE CASE OF GUJARAT STATE CO-OPERATI VE UNION (SUPRA) IT IS HELD BY THE DIVISION BENCH OF T HIS COURT THAT MERE EXISTENCE OF PROFIT WILL NOT DISQUA LIFY AN INSTITUTION FOR EXEMPTION UNDER SECTION 10(22) OF T HE ACT, IF THE SOLE PURPOSE OF ITS EXISTENCE IS NOT PROFIT MAKING BUT IS EDUCATIONAL ACTIVITIES. IN THE SAID DECISION THE DIVISION BENCH ALSO CONSIDERED THE DECISION OF THE HON'BLE THE SUPREME COURT IN THE CASE OF LOKA SHIKSHANA TRUST (SUPRA), WHICH HAS BEEN RELIED UPON BY THE ASSESSING OFFICER AS WELL AS THE LEARNED COUNSE L APPEARING ON BEHALF OF THE REVENUE. IN THE SAID DEC ISION, THE DIVISION BENCH OF THIS COURT HAS OBSERVED AS UN DER (PAGE 286 OF 195 ITR) : 'IT APPEARS TO US THAT THE DECISION OF THE TRIBUNAL WHICH SEEKS TO REST IT ON THE OBSERVATIONS MADE BY THE SUPREME COURT IN LOKA SHIKSHANA TRUST'S (SUPRA) FOR - - ITA 1059 & 1060/14 8 HOLDING THAT, THE ASSESSEE IS NOT ENTITLED TO EXEMP TION UNDER SECTION 10(22) OF THE ACT IS BASED ON A COMPL ETE MISREADING OF THE OBSERVATIONS OF THE SUPREME COURT . IN LOKA SHIKSHANA TRUST'S CASE [1975] 101 ITR 234 (SC) THE SUPREME COURT, WHILE DEALING WITH THE PROVISION S OF SECTION 11 READ WITH SECTION 2(15) OF THE ACT, WHIC H DEFINES 'CHARITABLE PURPOSE' OBSERVED AS UNDER (PAG E 241 OF 101 ITR) : 'THE SENSE IN WHICH THE WORD 'EDUCATION' HAS BEEN U SED IN SECTION 2(15) OF THE ACT IN THE SYSTEMATIC INSTR UCTION, SCHOOLING OR TRAINING GIVEN TO THE YOUNG IS PREPARA TION 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 ACQUISITIO N OF FURTHER KNOWLEDGE CONSTITUTES EDUCATION. ACCORDING TO THIS, WIDE AND EXTENDED SENSE, TRAVELLING IS EDUCAT ION, BECAUSE AS A RESULT OF TRAVEL LING YOU ACQUIRE FRES H KNOWLEDGE . . . BUT THIS NOT THE SENSE IN WHICH THE WORD 'EDUCATION' IS USED IN CLAUSE (15) OF SECTION 2. WH AT 'EDUCATION' CONNOTES IN THAT CLAUSE IS THE PROCESS OF TRAINING AND DEVELOPING THE KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENTS BY NORMAL SCHOOLING.' THE SUPREME COURT, IN THE ABOVE OBSERVATIONS BY REFERRING TO THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO THE YOUNG HAS ONLY CITED AN INSTA NCE IN ORDER TO INDICATE AS TO WHAT THE WORD 'EDUCATION' APPEARING IN SECTION 2(15) OF THE ACT WHICH DEFINES 'CHARITABLE PURPOSES' IS INTENDED TO MEAN. WE ARE C ERTAIN THAT THESE OBSERVATIONS WERE NOT INTENDED TO KEEP O UT OF THE MEANING OF THE WORD 'EDUCATION', PERSONS OTHER THAN 'YOUNG'. THE EXPRESSION 'SCHOOLING' ALSO MEANS 'THA T SCHOOLS, INSTRUCTS OR EDUCATES' (THE OXFORD ENGLISH DICTIONARY VOLUME IX, PAGE 217). THE SUPREME COURT HAS OBSERVED THAT THE WORD 'EDUCATION' ALSO CONNOTE S THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERS ON HAS RECEIVED. THIS CLEARLY INDICATES THAT THE OBSER VATIONS OF THE SUPREME COURT WERE NOT INTENDED TO GIVE A NA RROW - - ITA 1059 & 1060/14 9 OR PEDANTIC SENSE TO THE WORD 'EDUCATION'. BY GIVIN G FURTHER ILLUSTRATIONS OF A TRAVELLER GAINING KNOWLE DGE, VICTIMS OF SWINDLERS AND THIEVES BECOMING WISER, TH E VISITORS TO NIGHT CLUBS ADDING TO THEIR KNOWLEDGE T HE HIDDEN MYSTERIES OF LIFE, THE SUPREME COURT HAS INDICATED THAT THE WORD 'EDUCATION' IS NOT USED IN A LOOSE SENSE SO AS TO INCLUDE ACQUISITION OF EVEN SUCH KNOWLEDGE. THE OBSERVATIONS OF THE SUPREME COURT ON LY INDICATE THE PROPER CONFINES OF THE WORD 'EDUCATION ' IN THE CONTEXT OF THE PROVISIONS OF SECTION 2(15) OF T HE ACT. IT WILL NOT BE PROPER TO CONSTRUE THESE OBSERVATIONS I N A MANNER IN WHICH THEY ARE CONSTRUED BY THE TRIBUNAL WHEN IT INFERS FROM THESE OBSERVATIONS, IN PARAGRAP H 17 OF ITS JUDGMENT, THAT THE WORD 'EDUCATION' IS LIMIT ED TO SCHOOLS, COLLEGES AND SIMILAR INSTITUTIONS AND DOES NOT EXTEND TO ANY OTHER MEDIA FOR SUCH ACQUISITION OF KNOWLEDGE. THE OBSERVATIONS OF THE SUPREME COURT DO NOT CONFINE THE WORD 'EDUCATION' ONLY TO SCHOLASTIC INSTRUCTIONS BUT OTHER FORMS OF EDUCATION ALSO ARE INCLUDED IN THE WORD 'EDUCATION'. AS NOTICED ABOVE, THE WORD 'SCHOOLING' ALSO MEANS INSTRUCTING OR EDUCATIN G. IT, THEREFORE, CANNOT BE SAID THAT THE WORD 'EDUCATION' HAS BEEN GIVEN AN UNDULY RESTRICTED MEANING BY THE SUPREME COURT IN THE SAID DECISION. THOUGH, IN THE CONTEXT OF THE PROVISIONS OF SECTION 10(22), THE CO NCEPT OF EDUCATION NEED NOT BE GIVEN ANY WIDE OR THE EXTE NDED MEANING, IT SURELY WOULD ENCOMPASS SYSTEMATIC DISSEMINATION OF KNOWLEDGE AND TRAINING IN SPECIALI ZED SUBJECTS AS IS DONE BY THE ASSESSEE. THE CHANGING T IMES AND THE EVER WIDENING HORIZONS OF KNOWLEDGE MAY BRI NG IN CHANGES IN THE METHODOLOGY OF TEACHING AND A SHI FT OF THE BETTER IN THE INSTITUTIONAL SETUP. ADVANCEMENT OF KNOWLEDGE BRINGS WITHIN ITS FOLD SUIT ABLE METHODS OF ITS DISSEMINATION AND THOUGH THE PRIMARY METHOD OF SITT ING IN A CLASSROOM MAY REMAIN IDEAL FOR MOST OF THE INI TIAL EDUCATION, IT MAY BECOME NECESSARY TO HAVE A DIFFER ENT OUTLOOK FOR FURTHER EDUCATION. IT IS NOT NECESSARY TO NAIL DOWN THE CONCEPT OF EDUCATION TO A PARTICULAR FORMU LA OR TO FLOW IT ONLY THROUGH A DEFINED CHANNEL. ITS PROG RESS LIES - - ITA 1059 & 1060/14 10 IN THE ACCEPTANCE OF NEW IDEAS AND DEVELOPMENT OF APPROPRIATE MEANS TO REACH THEM TO RECIPIENTS.' 5.5. NOW, SO FAR AS RELIANCE PLACED UPON THE DECISI ON OF THE DIVISION BENCH OF THIS COURT IN THE CASE OF SAU RASHTRA EDUCATION FOUNDATION (SUPRA) BY THE LEARNED ADVOCAT E APPEARING ON BEHALF OF THE REVENUE IS CONCERNED, IT IS REQUIRED TO BE NOTED THAT AS SUCH THE TRIBUNAL HAS CONSIDERED THE SAME IN DETAIL AND HAS RIGHTLY HELD AND OBSERVED THAT AS SUCH THE SAID DECISION WOULD ASSIS T THE ASSESSEE RATHER THAN THE REVENUE. IT IS ALSO REQUIR ED TO BE NOTED THAT AS SUCH IN THE SAID DECISION THE DIVI SION BENCH HAS NOT TAKEN ANY CONTRARY DECISION THAT OF T HE DECISION OF GUJARAT STATE CO-OPERATIVE UNION (SUPRA ). IT IS TO BE NOTED THAT, ON FACTS, IT WAS HELD THAT THE ASSESSEE CANNOT BE SAID TO BE AN EDUCATIONAL INSTIT UTION AND, THEREFORE, THE ASSESSEE WOULD NOT BE ENTITLED TO EXEMPTION AS CONTEMPLATED UNDER SECTION 10(22) OF T HE ACT. 5.6. NOW, APPLYING THE RATIO OF THE DECISION OF THE DIVISION BENCH OF THIS COURT IN THE CASE OF GUJARAT STATE CO-OPERATIVE UNION (SUPRA) REPRODUCED HEREINABOVE A ND THE ACTIVITIES OF THE ASSESSEE SUCH AS CONTINUING EDUCATION DIPLOMA AND CERTIFICATE PROGRAMME ; MANAGEMENT DEVELOPMENT PROGRAMME ; PUBLIC TALKS AND SEMINARS AND WORKSHOPS AND CONFERENCES, ETC., WE AR E IN COMPLETE AGREEMENT WITH THE VIEW TAKEN BY THE TRIBUNAL THAT THE ACTIVITIES OF THE ASSESSEE IS EDU CATIONAL ACTIVITIES AND/OR IS IN THE FIELD OF EDUCATION. 5.7. NOW, IN VIEW OF THE AFORESAID FINDING THAT THE ACTIVITIES OF THE ASSESSEE IS IN THE FIELD OF EDUCA TION, WHETHER THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT OR NOT AND WHETHER IN THE FAC TS AND CIRCUMSTANCES OF THE CASE THE ASSESSEE CAN BE DENIE D EXEMPTION UNDER SECTION 11 OF THE ACT RELYING UPON AND/OR CONSIDERING THE PROVISO TO SECTION 2(15) OF THE ACT IS CONCERNED SO FAR AS THE AMENDMENT IN SECTION 2(1 5) OF THE ACT AMENDED, VIDE THE FINANCE ACT, 2008, AND TH E INSERTION OF THE PROVISO TO SECTION 2(15) OF THE AC T IS - - ITA 1059 & 1060/14 11 CONCERNED, AS SUCH THE SAME HAS BEEN EXPLAINED, VID E CIRCULAR NO. 11 OF 2008, DATED DECEMBER 19, 2008. I T IS CLARIFIED THAT WHERE INDUSTRIES OR TRADE ASSOCIATIO N CLAIM BOTH TO BE CHARITABLE INSTITUTIONS AS WELL AS MUTUA L ORGANIZATIONS AND THEIR ACTIVITIES ARE RESTRICTED T O CONTRIBUTIONS FROM AND PARTICIPATION OF ONLY THEIR MEMBERS, THESE WOULD NOT FALL UNDER THE PURVIEW OF THE PROVISO TO SECTION 2(15) OF THE ACT OWING TO THE PR INCIPLES OF MUTUALITY. FROM CIRCULAR NO. 11 OF 2008, DATED DECEMBER 19, 2008, IT APPEARS THAT THE NEWLY INSERT ED PROVISO TO SECTION 2(15) OF THE ACT WILL APPLY TO E NTITIES WHOSE PURPOSE IS ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY, I.E., THE FOURTH LIMB OF TH E DEFINITION OF 'CHARITABLE PURPOSE' CONTAINED IN SECTION 2(15) OF THE ACT AND, HENCE, SUCH ENTITIES WILL NOT BE ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OR UNDER SECTION 10(23C) OF THE ACT IF THEY CARRY ON COMMERCIAL ACTIVITIES. THUS, ON A FAIR READING OF SECTION 2(15) OF THE ACT THE NEWLY INSERTED PROVISO TO SECTION 2(15) OF THE ACT WILL NOT APPLY IN RESPECT OF THE FIRST THREE LIMBS OF SECTIO N 2(15) OF THE ACT, I.E., RELIEF TO THE POOR; EDUCATION OR MED ICAL RELIEF. THUS, WHERE THE PURPOSE OF A TRUST OR INSTITUTION I S RELIEF OF THE POOR; EDUCATION OR MEDICAL RELIEF, IT WILL C ONSTITUTE 'CHARITABLE PURPOSE' EVEN IF IT INCIDENTALLY INVOLV ES THE CARRYING ON OF THE COMMERCIAL ACTIVITIES. THUS, ON A FAIR READING OF SECTION 2(15) OF THE ACT READ WITH CIRCU LAR NO. 11 OF 2008, DATED DECEMBER 19, 2008, IT APPEARS THA T IF THE CASE OF THE ASSESSEE DOES NOT FALL WITHIN THE F IRST THREE LIMBS OF SECTION 2(15) OF THE ACT, I.E., RELI EF TO THE POOR ; EDUCATION OR MEDICAL RELIEF AND IF IT FALLS IN THE FOURTH LIMB, I.E., ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND IT IS FOUND THAT SUCH AC TIVITY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY INVOLVES CARRYING ON OF (A) ANY ACTIVITY IN THE NAT URE OF TRADE, COMMERCE OR BUSINESS ; OR (B) ANY ACTIVITY O F RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS ; FOR A CESS OR FEE OR ANY OTHER CONSID ERATION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, O R RETENTION OF THE INCOME FROM SUCH ACTIVITY, THE SAM E SHALL - - ITA 1059 & 1060/14 12 NOT BE CONSIDERED FOR 'CHARITABLE PURPOSE' AND SHAL L NOT BE ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE AC T. 5.7. IN THE PRESENT CASE, AS OBSERVED HEREINABOVE A ND RIGHTLY HELD BY THE TRIBUNAL, THE ACTIVITIES OF THE ASSESSEE WOULD FALL WITHIN THE DEFINITION OF 'CHARITABLE PUR POSE' AS PER SECTION 2(15) OF THE ACT AND, THEREFORE, WOULD BE ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT. 6. IN VIEW OF THE ABOVE, WE ARE IN COMPLETE AGREEME NT WITH THE VIEW TAKEN BY THE TRIBUNAL THAT THE ACTIVI TIES OF THE ASSESSEE ARE RELATED TO EDUCATION AND, THEREFOR E, IS ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT. AT THIS STAGE, IT IS REQUIRED TO BE NOTED THAT RIGHT FROM T HE ASSESSMENT YEAR 1995-96 TILL 2008-09 THE ACTIVITIES OF THE ASSESSEE HAS BEEN CONSIDERED BY THE REVENUE AS EDUCATIONAL ACTIVITIES. CONSIDERING VARIOUS ACTIVIT IES OF THE ASSESSEE AS NARRATED BY THE ASSESSING OFFICER I N PARAGRAPHS 4 AND 5 OF THE ASSESSMENT ORDER AND CONSIDERING THE DECISION OF THE DIVISION BENCH OF T HIS COURT IN THE CASE OF GUJARAT STATE CO-OPERATIVE UNI ON (SUPRA) WE CONFIRM THE VIEW TAKEN BY THE TRIBUNAL T HAT THE ACTIVITIES OF THE ASSESSEE AHMEDABAD MANAGEMENT ASSOCIATION IS RELATED TO EDUCATION AND , THEREFORE, IS ENTITLED TO EXEMPTION UNDER SECTION 1 1 OF THE ACT AS CLAIMED. 7. UNDER THE CIRCUMSTANCES, THE QUESTION RAISED IN THE PRESENT TAX APPEAL IS ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. CONSEQUENTLY, THE PRESEN T TAX APPEAL DESERVES TO BE DISMISSED AND IS, ACCORDINGLY , DISMISSED. HOWEVER, IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THERE SHALL BE NO ORDER AS TO COSTS. 9. AS WE HAVE OBSERVED EARLIER THAT THE OBJECTS OF THE ASSESSEE ARE SIMILAR TO THE OBJECTS OF AHMEDABAD M ANAGEMENT ASSOCIATION. THUS, WE ARE OF CONSIDERED VIEW THAT THE JUDGMENT - - ITA 1059 & 1060/14 13 RENDERED BY THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF AHMEDABAD MANAGEMENT ASSOCIATION (SUPRA) SQUARELY A PPLIES TO THE PRESENT CASE AS WELL. ACCORDINGLY, WE UPHO LD THE FINDINGS OF THE COMMISSIONER OF INCOME-TAX(APPEALS). THE AP PEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 20 TH OF MARCH, 2015 AT CHENNAI. SD/- SD/- ( $ . %#& % ) ( ' () *+,-./0*1/02/3-04) 562/7*8/79.4) ! :(*;;-<09/09,=3>=? @ :( /JUDICIAL MEMBER A@ /CHENNAI, B: /DATED, THE 20 TH MARCH, 2015. MPO*/KRI. :C D'E' /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. F) /CIT(A) 4. F /CIT 5. 'GH I /DR 6. HJK /GF.