Appeal details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 6679 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
8 month(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-10-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Not Allotted
Assessment Year
2013-2014
Appeal Filed On
09-02-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.270/CHD/2017 (ASSESSMENT YEAR : 2013-14) M/S MAHATMA GANDHI STATE VS. THE D.C.I.T., INSTITUTE OF PUBLIC ADMINISTRATION, CIRCLE-1(EXEMPTION), PUNJAB INSTITUTIONAL AREA, CHANDIGARH. SECTOR 26, CHANDIGARH. PAN: AAAJM0319A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N.SINGLA RESPONDENT BY : SHRI RAVI SARANGAL, CIT DR DATE OF HEARING : 26.09.2017 DATE OF PRONOUNCEMENT : 30.10.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINS T THE ORDER OF LD.CIT (APPEALS)-2, CHANDIGARH DATED 01.12.2016 RELATING TO ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE IN THE PRESENT APPEAL IS AGGRIEVED BY THE ACTION OF THE LD.CIT (APPEALS) IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER DENYING THE ASSESSEES CLAIM OF EXEMPTION UNDER SECTION 10(23C)(IIIAB) OF THE INCOM E TAX ACT, 1961 (IN SHORT THE ACT). 3. BRIEF FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED WITH SUB REGISTRAR , CHANDIGARH AND ESTABLISHED AS AN INSTITUTE BY THE GOVERNMENT OF PUNJAB WITH THE FOLLOWING OBJECTS: 2 I. TO UNDERTAKE AND ASSIST IN THE ORGANIZATION O F TRAINING AND STUDY COURSES, CONFERENCES, SEMINARS AND LECTURES. II. TO UNDERTAKE AID, PROMOTE AND COORDINATE RESEARCH AND TRAINING THROUGH ITS OWN OR OTHER AGENCIES, I NCLUDING UNIVERSITIES AND OTHER INSTITUTIONS OF STANDING. III. TO ESTABLISH WINGS FOR'(I) EDUCATION, TRAINING AND ORIENTATION, (II) RESEARCH INCLUDING ACTION RESEARCH, (III) CONSULTANCY; (IV) PUBLICATIONS AND SUCH OT HERS AS MAY BE NECESSARY TO ACHIEVE THE OBJECTS. IV. TO ANALYSES SPECIFIC PROBLEMS ENCOUNTERE D IN THE PLANNING AND IMPLEMENTATION OF PROJECTS; POLICIES A ND PROGRAMME OF THE GOVERNMENT AND TO SUGGEST SUITABLE REMEDIAL MEASURES. V. TO PREPARE, PRINT AND PUBLISH PAPERS, PERIODICA LS AND BOOKS IN FURTHERANCE OF THE OBJECTS OF THE SOCIETY. VI. TO ESTABLISH AND MAINTAIN LIBRARIES AND INFORMATIO N SERVICES. VII. TO COLLABORATE WITH OTHER INSTITUTIONS, ORGANI ZATIONS, ASSOCIATIONS AND SOCIETIES, IN INDIA OR ABROAD INTERES T IN SIMILAR OBJECTS; AND VIII. TO OFFER FELLOWSHIPS, SCHOLARSHIPS, PRIZES AND STIP ENDS IN FURTHERANCE OF THE OBJECTS OF THE INSTITUTIONS. 4. THE INCOME OF THE ASSESSEE SOCIETY WAS CLAIMED A S EXEMPT UNDER SECTION 10(23C)(IIIAB) OF THE ACT FOR THE IMPUGNED ASSESSMENT YEAR. THE MAIN SOURCE OF INCOM E OF THE ASSESSEE WERE GRANTS IN AID FROM THE GOVERNMENT OF PUNJAB AND THE CENTRAL GOVERNMENT, RENTAL INCOME AN D TRAINING FEES. THE ASSESSING OFFICER DENIED THE AS SESSEE EXEMPTION UNDER SECTION 10(23C)(IIIAB) FOR THE REAS ON THAT HE FOUND THAT THE ASSESSEE DID NOT FULFILL THE COND ITIONS 3 UNDER SECTION 10(23C)(IIIAB) OF EXISTING SOLELY FOR THE PURPOSE OF EDUCATION AND NOT FOR PROFIT MOTIVE SINC E; A) THE OBJECTS & ACTIVITIES OF THE ASSESSEE WERE NO T COVERED UNDER EDUCATION B) IT WAS EARNING INCOME FROM LETTING OUT ITS PREMI SES AND RUNNING COACHING CLASSES WHICH ACTIVITIES WERE BEYOND ITS STATED OBJECTS. 5. THE ASSESSING OFFICER ALSO NOTED THAT THE ASSESS EE HAD INITIALLY NOT CLAIMED THE SAID EXEMPTION IN THE RET URN OF INCOME FILED AND FURTHER HAD FILED AUDIT REPORT IN FORM NO.10B WHICH WAS APPLICABLE FOR ASSESSEES WHO CLAIM EXEMPTION UNDER SECTION 11. THE ASSESSING OFFICER ALSO FOUND THAT THE ASSESSEE HAD MADE ADVANCES TO PUNJAB SMALL INDUSTRIES & EXPORT CORPORATION LTD (HEREINAFTER RE FERRED AS PSIEC), WHICH WAS IN CONTRAVENTION OF THE PRESCRIBE D MODES OF INVESTMENTS AS PER SECTION 11(5) OF THE ACT. FO R THE ABOVE SAID REASONS, THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS NOT ELIGIBLE FOR EXEMPTION UNDER SECTI ON 10(23C)(IIIAB) OF THE ACT AND, THEREFORE, MADE ADDI TION ON ACCOUNT OF SURPLUS OF RS.2,07,99,136/-. 6. BEFORE THE LD. CIT (APPEALS), THE ASSESSEE MADE DETAILED SUBMISSIONS TO THE EFFECT THAT IT HAD BEEN ALLOWED EXEMPTION U/S 10(23C)(IIIAB) CLAIMED IN EARLIER YEA RS ON IDENTICAL SET OF FACTS AND THAT ALL ACTIVITIES WERE PART AND PARCEL OF AND INCIDENTAL TO THE MAIN ACTIVITY OF I MPARTING EDUCATION AND THAT THE ENTIRE INCOME EARNED, WHETHE R FROM 4 EDUCATIONAL ACTIVITIES OR FROM RENTAL INCOME, WAS U TILIZED FOR THE PURPOSE OF IMPARTING EDUCATION ONLY AND THA T THE ADVANCE GIVEN TO PSIEC WAS FOR DEVELOPMENT OF VACAN T LAND OF THE INSTITUTION FOR EXTENSION OF ITS INFRASTRUCT URE FOR EDUCATIONAL PURPOSE. THUS THE ASSESSEE CONTENDED T HAT IT HAD FULFILLED ALL THE CONDITIONS STIPULATED UNDER S ECTION 10(23C)(IIIAB) OF THE ACT. THE LD. CIT (APPEALS) R EJECTED THE CONTENTIONS RAISED BY THE ASSESSEE AND UPHELD THE O RDER OF THE ASSESSING OFFICER STATING THAT THE ASSESSING OF FICER HAD GIVEN DETAILED FINDINGS ON THE ISSUE THAT THE ASSES SEE WAS NOT EXISTING SOLELY FOR THE PURPOSE OF IMPARTING ED UCATION AND NOT FOR MAKING PROFITS. THE RELEVANT FINDINGS OF THE LD.CIT (APPEALS) AT PARA 6.3 AND 6.3.1 OF THE ORDER ARE AS UNDER: 6.3. THE SUBMISSION OF THE APPELLANT, ASSESSMENT ORDE R AND RELEVANT FACTS ON THE RECORD HAVE BEEN CAREFULLY CON SIDERED. APPELLANT HAS MAINLY PLACED RELIANCE ON THE JUDGEMEN T OF HON'BLE SUPREME COURT IN THE CASE OF VISVESVARAYA TECHNOLOGICAL UNIVERSITY (SUPRA). ON PERUSAL OF THE JUDGEMENT IT IS SEEN THAT HON'BLE COURT HAS LAID DOW N THAT ENTITLEMENT FOR EXEMPTION U/S 10(23C)(IIIAB) IS SUBJEC T TO TWO CONDITIONS. FIRSTLY THE EDUCATIONAL INSTITUTIONAL OR THE UNIVERSITY MUST BE SOLELY FOR THE PURPOSE OF EDUCATI ON AND WITHOUT ANY PROFIT MOTIVE. SECONDLY IT MUST BE WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT. FROM PERUS AL OF THE TOTAL RECEIPTS AND THE GRANT RECEIVED FROM GOVE RNMENT, IT IS SEEN THAT THE APPELLANT IS SUBSTANTIALLY FINANCED BY THE GOVERNMENT AS THE GRANTS TO THE ASSESSEE EXCEEDS 50 % OF TOTAL RECEIPTS. SO FAR AS THE CONDITION THAT THE EDUC ATIONAL INSTITUTION IS SOLELY FOR THE PURPOSE OF THE EDUCAT ION AND WITHOUT ANY PROFIT MOTIVE, ASSESSING OFFICER HAS GI VEN DETAILED FINDINGS VIS-A-VIS OBJECTS AND ACTIVITIES OF THE 5 ASSESSEE SOCIETY AS MENTIONED IN THE MOA. THE APPELLA NT IS GETTING SUFFICIENT GRANTS FROM THE GOVERNMENT EVEN T HAN IT IS INDULGING IN THE ACTIVITIES OF PROVIDING TRAINING TO VARI OUS ORGANIZATIONS AND ALSO PROVIDING COACHING FOR COMPET ITIVE EXAMINATIONS AND THESE ACTIVITIES DO NOT COME UNDER T HE PURVIEW OF EDUCATION. APPELLANT IS ALSO COLLECTING REVE NUE FROM LETTING OUT THE PREMISE TO VARIOUS ORGANIZATIONS AN D ON ACCOUNT OF THESE ACTIVITIES THE RENT AND FEES FROM T RAINING AND COACHING CLASSES HAVE BEEN INCREASING FROM YEAR TO YEAR AND AS A RESULT SURPLUS IS ALSO GENERATED OVER THE YEARS . THE LETTING OUT OF PREMISES FROM RENT IS NOT AN OBJECT AS PER THE MOA OF THE ASSESSEE SOCIETY. ASSESSING OFFICER HAS A LSO MENTIONED THAT ASSESSEE HAS NOT CLAIMED THE EXEMPTI ON U/S 10(23C)(IIIAB) OF THE ACT IN. THE RETURN OF INC OME AND THE CLAIM WAS MADE DURING ASSESSMENT PROCEEDING. IT WAS ALSO NOTICED THAT ASSESSEE HAS AUDITED BOOKS OF ACC OUNTS AS PER FORM 10B WHICH IS APPLICABLE ONLY FOR THE ASSES SEE'S WHO CLAIMED EXEMPTION U/S 11 BUT ASSESSEE IS NOT REGISTERED U/S 12AA OF THE ACT. FOR CLAIMING DEDUCTIO N U/S 10(23C)(IIIAB) OF THE ACT, ASSESSEE WAS REQUIRED TO F ILE AUDIT REPORT IN FORM 10BB OF THE ACT WHICH WAS NOT DONE. I T HAS ALSO BEEN NOTED THAT APPELLANT HAS GIVEN ADVANCES T O PUNJAB SMALL INDUSTRIES AND EXPORT CORPORATION LTD. (PSIEC), WHICH ARE RECOVERABLE OF RS.31.98 CRORE AND THE ASSESSEE COULD NOT FILE THE REASON AND PURPOSE FOR SUCH ADVANCE BEFORE THE ASSESSING OFFICER. 6.3.1 THE TOTALITY OF THE CIRCUMSTANCES NARRATED AB OVE SUGGEST THAT ASSESSEE IS INDULGING INTO THE ACTIVITIES WHICH ARE NOT AS PER THE OBJECTS AND IS NOT EXISTING SOLELY FOR THE PURPOSE OF EDUCATION AS IT HAS A PROFIT MOTIVE. THE A DVANCES RECOVERABLE FROM PSIEC HAS NOT BEEN EXPLAINED BY THE APPELLANT. IT HAS BEEN HELD BY HON'BLE SUPREME COUR T IN THE CASE OF AMERICAN HOTEL & LODGING ASSOCIATION, EDUCATIONA L INSTITUTE VS. CBDT 2008 (301) ITR 86 SC THAT IN ORDER TO ASCERTAIN WHETHER THE INSTITUTE IS CARRIED ON WITH TH E OBJECT OF MAKING PROFIT OR NOT IT IS DUTY OF THE PRESCRIBED AUTHORITY TO ASCERTAIN WHETHER THE BALANCE OF INCOME IS APPLIED W HOLLY AND EXCLUSIVELY TO THE OBJECTS FOR WHICH THE APPLICANT I S 6 ESTABLISHED. THE OUTSTANDING BALANCE WITH PSIEC IS IN VIOLATION OF PROVISION OF SECT I ON 10(23C) READ WITH SECTION 11(5) OF THE ACT. DURING THE ASSESSMENT PROCEEDING AS SESSEE FAILED TO EXPLAIN THE REASON AND PURPOSE OF THESE ADVANCES AND DURING APPEAL PROCEEDING ALSO IT W AS NOT ESTABLISHED THAT THESE ADVANCES HAVE BEEN MADE AS PE R THE OBJECTS OF THE INSTITUTION. THEREFORE, ASSESSING OF FICER HAS GIVEN REASONED FINDING THAT ASSESSEE IS NOT ELIGIBLE FOR E XEMPTION U/S 10 (23C)(IIIAB) OF THE ACT AND THE SAME ARE UPHELD. GROUNDS OF APPEAL NO. 2, 3, 4, 5 AND 6 ARE DISMISSED. 7. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME U P IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TA X (A) IS BAD, AGAINST THE FACTS & LAW. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS WRONGLY UPHELD THE ACTIVITIES OF THE APPELLANT AS NON EDUCATIONAL. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS WRONGLY DENIED THE EXEMPTION U/S 10(23C)(IIIAB) OF THE INCOME TAX ACT, 1961. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A ) HAS WRONGLY DISALLOWED WHOLE OF THE EXPENSES INCURRED DURING THE YEAR BY T HE APPELLANT. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS WRONGLY TREATED THE SURPLUS AS INCOME OF THE APPELLANT, WHICH IS TO BE TRANSFERRED/ADJUSTED BY THE GOVERNMENT IN THE FOLLOWING YEARS. 6. THAT THE RECEIPTS WHICH DIDN'T BELONG TO APPEL LANT HAS BEEN WRONGLY TREATED AS INCOME OF THE APPELLANT 7. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS WRONGLY TREATED PAYMENT TO PSIEC AS VIOLATION OF THE PROVISION OF S ECTION 10(23C) R.WS. 11(5) OF THE ACT. 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUNDS OF APPEAL BEFORE THE FINAL HEARING. 8. GROUND NOS. 1 AND 8 RAISED BY THE ASSESSEE ARE GENERAL IN NATURE AND, THEREFORE, NEED NO ADJUDICAT ION. 9. GROUND NOS.2, 3 & 7 RAISED BY THE ASSESSEE ARE VIS--VIS THE DENIAL OF EXEMPTION UNDER SECTION 10(23C)(IIIAB) OF THE ACT BY HOLDING THAT THE ASSES SEES 7 ACTIVITIES WERE NON-EDUCATIONAL AND FOR THE PURPOSE OF EARNING PROFIT AND THE PAYMENT MADE TO PSIEC WAS IN VIOLATION OF SECTION 11(5) OF THE ACT. SINCE THE GR OUNDS ARE INTERRELATED THEY ARE BEING TAKEN UP TOGETHER FOR ADJUDICATION. 10. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE FINDINGS OF THE LD.CIT (APPEALS) THAT THE ASSESSEE WAS INDULGING IN ACTIVITIES WHICH COULD N OT BE SAID TO BE FOR THE PURPOSE OF EDUCATION, WAS FACTUA LLY INCORRECT. THE LD. COUNSEL FOR THE ASSESSEE POINTE D OUT THAT THE BASIS FOR ARRIVING AT SUCH FINDINGS IS THAT THE ASSESSEE IS COLLECTING REVENUE FROM LETTING OUT THE PREMISES TO VARIOUS ORGANIZATIONS AND ALSO CHARGING FEES FROM T RAINING AND COACHING CLASSES, BOTH OF WHICH ALLEGEDLY HAVE BEEN HELD TO NOT COME UNDER THE PURVIEW OF EDUCATION. T HE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT IT WAS EX PLAINED TO THE LD.CIT (APPEALS) THAT THE TRAINING AND STUDY COURSES CONDUCTED BY THE ASSESSEE SOCIETY WERE IN PURSUANCE TO THE STATED OBJECTS OF THE INSTITUTION. LD.COUNSEL FOR T HE ASSESSEE POINTED OUT THAT THE ASSESSEE HAS BEEN CAR RYING OUT THESE ACTIVITIES SINCE INCEPTION, CLAIMING EXEM PTION U/S 10(23C)(IIIAB) AND HAS NEVER BEEN FOUND TO BE CARRY ING OUT ACTIVITIES NOT IN THE NATURE OF IMPARTING EDUCATION . IN SUPPORT LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENT ION TO THE FOLLOWING: A) THAT IN THE PRECEDING YEARS I.E. ASSESSMENT YEA RS 2010-11 AND 2012-13 THE ASSESSEE HAD BEEN ALLOWED 8 THE CLAIM OF EXEMPTION UNDER SECTION 10(23C)(IIIAB) ON THE SAME SET OF FACTS. THE LD. COUNSEL FOR THE ASS ESSEE DREW OUR ATTENTION TO THE ASSESSMENT ORDER FOR THE IMPUGNED YEARS PLACED AT PAPER BOOK PAGE NOS.25 TO 27. B) THAT THE ASSESSEE SOCIETY HAD BEEN ISSUED A CERTIFICATE FOR NON DEDUCTION OF TAX AT SOURCE FOR THE YEARS 2001-02 AND 2002-03, ON THE PREMISE THAT IT WAS COVERED UNDER THE PROVISIONS OF SECTION 10(23C)(IIIAB) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE SAID CERTIFICATE ISSUED TO THE MANAGER, ICICI BANK LTD., SECTOR 9, SECTOR 35, CHANDIGARH AND MANAGER, HDFC BANK, SECTOR 7 PANCHKULA, PLACED AT PAPER BOOK PAGE NO.24 . C) THE COMMUNICATION RECEIVED FROM THE OFFICE OF T HE CHIEF COMMISSIONER OF INCOME TAX, N.W REGION, CHANDIGARH STATING THAT AS PER THE PROVISIONS OF SECTION 10(23C)(IIIAB) IT WAS NOT REQUIRED TO SEEK ANY APPROVAL FOR CLAIMING THE SAID EXEMPTION. 11. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT IT IS EVIDENT FROM THE ABOVE THAT THE ASSESSEE HAD ALL AL ONG BEEN ALLOWED EXEMPTION UNDER SECTION 10(23C)(IIIAB) OF T HE ACT BY THE REVENUE AND HAD BEEN RECOGNIZED AS BEING ELIGIB LE FOR THE SAME ALSO. THE LD. COUNSEL FOR THE ASSESSEE ST ATED THAT SINCE THERE WAS NO CHANGE IN THE FACTUAL CIRCUMSTAN CES FROM THE PRECEDING YEARS, THERE WAS NO REASON TO HO LD THAT 9 THE ASSESSEE WAS NOT ENTITLED TO CLAIM EXEMPTION UN DER SECTION 10(23C)(IIIAB) OF THE ACT. 12. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT THE INCOME EARNED ON ACCOUNT OF RENTING OUT OF BUILDING/CONFERENCE HALL WAS EARNED IN RELATION TO THE EDUCATIONAL ACTIVITIES CARRIED OUT BY IT AS STATED IN ITS OBJECTS BY LETTING OUT THE PREMISES AND INFRASTRUCT URES OWNED BY THE ASSESSEE SOCIETY FOR THE STATED OBJECT IVES. 13. FURTHER THE LD. COUNSEL FOR THE ASSESSEE POINTE D OUT THAT THE OTHER REASON FOR DENYING THE ASSESSEE EXEM PTION UNDER SECTION 10(23C)(IIIAB) WAS THE ADVANCES GIVEN TO PSIEC WHICH AS PER THE LD.CIT (APPEALS) HAVING NOT BEEN EXPLAINED BY THE ASSESSEE WERE HELD TO BE IN CONTRA VENTION OF THE PRESCRIBED MODES OF INVESTMENT AS PER SECTIO N 11(5) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE POINTE D OUT THAT IT WAS SUBMITTED TO THE LD.CIT (APPEALS) THAT THE S AID ADVANCE HAD BEEN GIVEN FOR DEVELOPMENT OF VACANT LA ND OF THE INSTITUTION FOR EXTENSION OF ITS INFRASTRUCTURE FOR EDUCATIONAL PURPOSE. THE LD. COUNSEL FOR THE ASSES SEE DREW OUR ATTENTION TO PARA 6.2(IV) OF THE CIT(A) ORDER W HEREIN THE SUBMISSIONS OF THE ASSESSEE MAKING THE ABOVE AVERME NTS WERE REPRODUCED. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT COPY OF AGREEMENT WITH PSIEC IN THIS REGARD HAD BEEN FILED BEFORE THE LD.CIT (APPEALS). THE LD . COUNSEL FOR THE ASSESSEE FURTHER STATED THAT IT HAD NOW BEE N ABLE TO PROCURE ALL THE BILLS AND DETAILS OF THE CONSTRUCTI ON WERE UNDERTAKEN BY PSIEC WHICH HAS BEEN DULY RECONCILED WITH 10 THE BOOKS OF ACCOUNT OF PSIEC AND CERTIFIED BY CHAR TERED ACCOUNTANTS. THE LD. COUNSEL FOR THE ASSESSEE STAT ED THAT IT WISHED TO SUBMIT THESE DOCUMENTS AS ADDITIONAL EVIDENCES AND PLEADED THAT THE SAME MAY BE ADMITTED SINCE THEY WENT TO THE ROOT OF THE MATTER TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE. 14. THE LD. D.R., ON THE OTHER HAND, RELIED UPON T HE ORDER OF THE LD.CIT (APPEALS). 15. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND PER USED THE DOCUMENTS PLACED BEFORE US. 16. THE ISSUE BEFORE US PERTAINS TO DENIAL OF EXEMPTION U/S 10(23C)(IIIAB) OF THE ACT WHICH GRANT S EXEMPTION TO UNIVERSITIES OR OTHER EDUCATIONAL INST ITUTIONS EXISTING SOLELY FOR EDUCATION PURPOSE AND NOT FOR T HE PURPOSE OF PROFIT AND WHICH ARE WHOLLY OR SUBSTANTI ALLY FINANCED BY THE GOVERNMENT. THE REASON FOR DENIAL OF EXEMPTION IS NON FULFILLMENT OF THE BASIC CONDITION S PRESCRIBED THEREIN OF EXISTING SOLELY FOR THE PURPO SE OF EDUCATION AND NOT FOR THE PURPOSE OF PROFIT AND FUR THER THE INVESTMENT OF FUNDS OF THE SOCIETY IN MODES OTHER T HAN THOSE PRESCRIBED U/S 11(5) OF THE ACT. THE REASONI NG BEHIND REACHING TO THIS CONCLUSION BY THE REVENUE I S THE FACT THAT THE ASSESSEE IS INDULGING IN ACTIVITIES W HICH INCLUDE PROVIDING TRAINING TO VARIOUS ORGANIZATIONS AND PROVIDING COACHING FOR COMPETITIVE EXAMS WHICH AS P ER THE REVENUE DO NOT COME UNDER THE PURVIEW OF EDUCATION AND 11 FURTHER COLLECTING REVENUE BY LETTING OUT THEIR PRE MISES TO VARIOUS ORGANIZATIONS AND COLLECTING FEES FROM THE TRAINING AND COACHING CLASSES RESULTING IN SURPLUS THUS ESTA BLISHING THE PROFIT MOTIVE OF THE ASSESSEE SOCIETY. FURTHER THE ADVANCES MADE TO PUNJAB SMALL INDUSTRIES & EXPORT CORPORATION HAVE BEEN HELD TO BE IN VIOLATION OF TH E PROVISIONS OF SECTION 11(5) OF THE ACT WHICH PRESCR IBES THE MODES IN WHICH MONEY IS TO BE INVESTED OR DEPOSITED BY CHARITABLE SOCIETIES/INSTITUTIONS. 17. WE FIND MERIT IN THE CONTENTIONS OF THE LD. COUNSEL FOR ASSESSEE THAT IT HAS NOT VIOLATED THE B ASIC CONDITION OF EXISTING SOLELY FOR EDUCATION AND NOT FOR THE PURPOSE OF PROFIT. UNDISPUTEDLY, THE ASSESSEE SOCI ETY HAS BEEN IN EXISTENCE SINCE 28.3.1974, ESTABLISHED BY T HE GOVERNMENT OF PUNJAB, WITH THE STATED OBJECT OF PRO VIDING EDUCATION & TRAINING TO PUBLIC SERVICE ADMINISTRATI VE OFFICERS AND WAS BEING ADMINISTERED BY SENIOR OFFIC ERS OF THE STATE GOVERNMENT. IT IS ALSO NOT DISPUTED THAT THE ASSESSEE SOCIETY HAS BEEN CONSISTENTLY CLAIMING EXEMPTION U/ S 10(23C(IIIAB) OF THE ACT, WHICH HAS ALSO BEEN ALLOW ED TO IT EVEN AFTER SCRUTINY ASSESSMENT IN TWO YEARS I.E. AS SESSMENT YEARS 2010-11 AND 2011-12 AND IN ASSESSMENT YEAR 20 01- 02 THE ASSESSEE HAD BEEN GRANTED A CERTIFICATE BY T HE REVENUE FOR NON DEDUCTION OF TAX AT SOURCE ON THE B ANK INTEREST WHICH IT EARNED FOR THE REASON THAT ITS IN COME ENJOYS EXEMPTION FROM THE TAXATION U/S 10(23C)(IIIA B) OF THE ACT. CLEARLY, THE REVENUE HAS CONSISTENTLY BEEN ACC EPTING IN 12 THE PAST THAT THE ASSESSEE IS EXISTING FOR THE PURP OSE OF EDUCATION ONLY AND NOT FOR PROFIT AND IS THUS ENTIT LED TO CLAIM EXEMPTION U/S 10(23C(IIIAB) OF THE ACT. IN TH E IMPUGNED YEAR NO CHANGE IN THE FACTS OF THE CASE HA VE BEEN BROUGHT TO OUR NOTICE AS COMPARED TO THE PRECEDING YEARS. FOR THIS REASON ALONE WE FAIL TO UNDERSTAND HOW A DIAMETRICALLY OPPOSITE VIEW CAN BE TAKEN BY THE REV ENUE THAT THE ACTIVITIES OF THE ASSESSEE SOCIETY ARE NOT IN THE NATURE OF IMPARTING EDUCATION AND NOT FOR THE PURPO SE OF EARNING PROFIT. 18. EVEN OTHERWISE, WE FIND THAT THE ACTIVITY OF T RAINING AND CONDUCTING STUDY COURSES, CONFERENCES, SEMINARS AND LECTURES TO PUBLIC SERVICE ADMINISTRATIVE OFFICERS IN THE FIELD OF PUBLIC ADMINISTRATION TANTAMOUNTS TO NOTH ING ELSE BUT IMPARTING EDUCATION. ALL THE STATED OBJECTS OF THE ASSESSEE SOCIETY ARE AIMED AT DIFFUSING CERTAIN BRA NCH OF KNOWLEDGE I.E. PUBLIC ADMINISTRATION BY CONDUCTING TRAINING PROGRAMMES, STUDY COURSES, CONFERENCES, SEMINARS, L ECTURES OR BY PROMOTING RESEARCH AND TRAINING, PUBLISHING P APERS AND PERIODICALS AND MAINTAINING LIBRARIES AND INFOR MATION SERVICES IN THE AREA OF PUBLIC ADMINISTRATION. THE UNDERTAKING OF TRAINING AND STUDY COURSES IS CARRIE D OUT IN A STRUCTURED MANNER BY CONDUCTING REGULAR COURSES F OR IMPARTING INSTRUCTION AND TRAINING ON VARIOUS SUBJE CTS RELATED TO PUBLIC ADMINISTRATION. THE ACTIVITIES UN DERTAKEN THEREFORE IS IN THE NATURE OF IMPARTING EDUCATION. THE HONBLE GUJARAT HIGH COURT DEALT WITH AN IDENTICAL ISSUE IN 13 THE CASE OF GUJARAT STATE CO-OPERATIVE UNION VS CIT REPORTED IN195 ITR 279.IN THE SAID CASE ALSO THE AS SESSEE SOCIETY WAS ESTABLISHED WITH THE OBJECT OF SPREADIN G EDUCATION RELATING TO COOPERATIVE MOVEMENT BY CONDU CTING COURSES, TRAINING PROGRAMMES, RESEARCH AND STUDY OF THE SUBJECT, OPENING LIBRARIES AND PUBLISHING PERIODICA LS AND LITERATURE ON THE SUBJECT. THE QUESTION BEFORE THE HONBLE HIGH COURT WAS WHETHER THE ASSESSEE HAD BEEN RIGHTL Y DENIED EXEMPTION U/S 10(22) OF THE INCOME TAX ACT,1961,HOLDING ITS ACTIVITIES TO BE NOT EDUCATION AL IN VIEW OF THE MEANING GIVEN BY THE SUPREME COURT IN SOLE T RUSTEE, LOKA SHIKSHANA TRUST VS CIT 101 ITR 234. THE HONB LE HIGH COURT HELD THAT THE OBJECTS OF THE ASSESSEE IN DICATED THAT THE SOCIETY WAS ESTABLISHED FOR DIFFUSION OF C ERTAIN BRANCH OF KNOWLEDGE AND THEREFORE WAS IN THE NATURE OF IMPARTING EDUCATION. FURTHER REFERRING TO THE DECIS ION OF THE SUPREME COURT IN LOK SHIKSHANA (SUPRA), THE COURT H ELD THAT THE OBSERVATION OF THE APEX COURT THAT EDUCATI ON MEANS SCHOOLING WOULD MEAN, THAT SCHOOLS, INSTRUCTS OR ED UCATES AND THE OBSERVATIONS OF THE APEX COURT WERE NOT INT ENDED TO GIVE A NARROW OR PEDANTIC SENSE TO THE WORD EDUCATI ON. THE RELEVANT FINDING OF THE HIGH COURT ARE AS UNDER: THE CONTROVERSY WHICH WE ARE CALLED UPON TO DECIDE IS, THEREFORE, WHETHER THE ASSESSEE IS AN EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PR OFIT WITHIN THE MEANING OF S. 10(22) OF THE ACT. UNDER S. 10(22) OF THE ACT, IT IS PROVIDED THAT IN COMPUTING THE TOTAL INCOME OF A PR EVIOUS YEAR OF ANY PERSON, ANY INCOME FALLING WITHIN THE SAID CLAU SES, I.E., ANY INCOME OF A UNIVERSITY OR OTHER EDUCATIONAL INSTITU TION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PR OFIT, SHALL NOT BE INCLUDED. THE OBJECTS OF THE ASSESSEE-CO-OPERATIVE UNION AS ALSO THE ACTIVITIES ACTUALLY CARRIED ON BY IT WILL THROW CON SIDERABLE LIGHT ON THE QUESTION WHETHER THE ASSESSEE-CO-OPERATIVE UNIO N IS EXISTING 14 SOLELY FOR EDUCATIONAL PURPOSES OR NOT. BYE-LAWS 2 OF THE ASSESSEE- CO-OPERATIVE UNION, A COPY OF WHICH IS PLACED ON RE CORD BY THE CONSENT OF BOTH THE LEARNED COUNSEL FOR OUR CONSIDE RATION, ENUMERATES THEREIN EIGHT OBJECTS OF THE ASSESSEE- C O-OPERATIVE UNION AND THEY READ AS UNDER: (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 MATTER S PERTAINING TO CO- OPERATIVE EDUCATION AND FUNCTION AS A BODY OF EXPER TS IN MATTERS RELATING TO EDUCATION; (III) TO FUNCTION AS A FOCUSING CENTRE ON NON-OFFIC IAL OPINION ON VARIOUS SUBJECTS AFFECTING THE MOVEMENT AND FOR REPRESENTIN G IT IN PROPER QUARTERS; (IV) TO FURTHER THE SPREAD OF THE CO-OPERATIVE MOVE MENT; (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 PERI ODICALS, BOOKS, PAMPHLETS, AND LITERATURE IN GENERAL ON CO-OPERATIO N; RURAL DEVELOPMENT AND ALLIED SUBJECTS; (VII) TO CONDUCT TRAINING CLASSES, TRAINING CENTRES , SCHOOLS, COLLEGES, PRESCRIBE COURSES OF INSTRUCTION FOR THEM, CONDUCT EXAMINATION AND AWARD CERTIFICATES OR DIPLOMAS; AND (VIII) TO RUN A PRINTING PRESS. THE ACTIVITIES CARRIED ON BY THE ASSESSEE-CO-OPERAT IVE UNION HAVE BEEN BRIEFLY SUMMARISED AT ANNEXURE A' TO THE ORDE R OF THE CIT(A) DT. 22ND NOV., 1983 AND THE SAID LIST OF ACTIVITIES IS REFERRED TO IN PARA 5 OF THE ORDER OF THE CIT. THE FACT THAT THESE ACTIVITIES ARE CARRIED ON BY THE ASSESSEE-CO-OPERATIVE UNION HAS N OT BEEN DISPUTED. THE LIST OF ACTIVITIES AT ANNEXURE A' GI VES PARTICULARS OF THE COURSES CONDUCTED BY THE ASSESSEE-CO-OPERATIVE UNION AND THEIR DURATION. THE ASSESSEE CONDUCTS COURSES FOR HIGHER DIPLOMA IN CO- OPERATION (CONDENSED)18 WEEKS, DIPLOMA IN LAND DEV ELOPMENT BANKING12 WEEKS, CERTIFICATE COURSE IN CO-OP. CRED IT & BANKING10 WEEKS, AND SPECIALISED SHORT-TERM COURSES/ORIENTATION COURSES. THE ASSESSEE ALSO COND UCTS SEMINARS. IT ALSO APPEARS THAT THE ASSESSEE HAS BEE N RUNNING FOUR CO- OPERATIVE TRAINING WHICH CONDUCT JUNIOR BASIC C OURSES OF 24 WEEKS DURATION FOR DIPLOMA IN CO-OPERATION, SPECIAL COURSE FOR EMPLOYEES OF URBAN CO-OP. BANKS, DIST. CO-OP. BANKS AND MARKET CLASS, AND ALSO SEMINARS. THE ASSESSEE ALSO CONDUCT S CO-OPERATIVE EDUCATION PROGRAMME, CONSUMER EDUCATION PROGRAMMES (PROJECT), WOMEN CO-OP. EDUCATION PROGRAMME, SPECIAL TRAINING CLASSES IN THE DISTRICT UNDER CO-OP. EDUCATION AND INDUSTRIAL PROJECTS OF THE NATURE AND DURATION AS MENTIONED IN DETAIL IN THE S AID LIST OF ITS ACTIVITIES. IT IS NOT SUGGESTED THAT THE ASSESSEE-C O- OPERATIVE UNION IS DOING ANY ACTIVITY OTHER THAN THOSE ENUMERATED I N THE SAID LIST. 4. FROM THE NATURE OF THE ACTIVITIES OF THE ASSESSEE, IT IS ABUNDANTLY CLEAR TO US THAT THE ASSESSEE IS EXISTING SOLELY FO R EDUCATIONAL PURPOSES. IT WAS SOUGHT TO BE CONTENDED BY THE LEAR NED COUNSEL FOR 15 THE REVENUE THAT HAVING REGARD TO THE OBJECTS ENUME RATED IN CLS. (III), (IV), (VI) AND (VIII) OF THE BYE-LAW 2 OF TH E BYE LAWS OF THE ASSESSEE, IT CANNOT BE SAID THAT THE ASSESSEE WAS E XISTING SOLELY FOR EDUCATIONAL PURPOSES. IN CL. (III) OF THE BYE-LAW 2 , THE OBJECT ENUMERATED IS THAT THE ASSESSEE WILL FUNCTION AS A FOCUSING CENTRE ON NON-OFFICIAL OPINION ON VARIOUS SUBJECTS AFFECTI NG THE MOVEMENT AND FOR REPRESENTING IT IN PROPER QUARTERS. UNDER C L. (IV), ITS OBJECT IS TO FURTHER THE SPREAD OF THE CO-OPERATIVE MOVEMENT. CLAUSE (VI) REFERS TO OBJECTS OF OPENING CIRCULATING LIBRARIES, PUBLISHING PERIODICALS, BOOKS, PAMPHLETS, AND LITERATURE IN GE NERAL ON CO- OPERATION, RURAL DEVELOPMENT AND ALLIED SUBJECTS, W HILE CL. (VIII) REFERS TO RUNNING OF A PRINTING PRESS. IT IS DIFFIC ULT TO ACCEPT THE CONTENTION OF THE REVENUE THAT THESE CLAUSES INDICA TE ANY OBJECT OTHER THAN EDUCATIONAL FOR WHICH THE ASSESSEE SEEMS TO HAVE BEEN ESTABLISHED. ON TOTALITY OF THE OBJECTS ENUMERATED IN BYE-LAW 2, IT IS CLEAR TO US THAT THE ASSESSEE-CO-OPERATIVE UNION IS EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND EVEN THE OBJECTS WHICH ARE ENUMERATED IN CLS. (III), (IV), (VI) AND (VIII) ARE REFERABLE TO SUCH PURPOSES. IT WILL NOT BE OPEN TO READ ANY OF THESE CLAUSES IN ISOLATION TORN OF ITS CONTEXT FOR THE PURPOSES OF U RGING THAT THE ASSESSEE IS NOT EXISTING SOLELY FOR EDUCATIONAL PUR POSES AS ENVISAGED UNDER S. 10(22) OF THE ACT. IT IS OBVIOUS THAT THE OBJECTS OF FUNCTIONING AS A FOCUSING CENTRE ON NON-OFFICIAL OP INION ON VARIOUS SUBJECTS AFFECTING THE MOVEMENT AND FOR REPRESENTIN G IT IN PROPER QUARTERS, PROMOTING THE STUDY OF PROBLEMS CONNECTED WITH CO- OPERATION AND CARRYING ON RESEARCH IN THE SAME AND OF OPENING CIRCULATING LIBRARIES, PUBLISHING PERIODICALS, BOOK S, PAMPHLETS AND LITERATURE ARE CONNECTED WITH EDUCATIONAL PURPOSES FOR WHICH THE ASSESSEE-CO- OPERATIVE UNION IS ESTABLISHED. THE OB JECT OF RUNNING A PRINTING PRESS AS ENUMERATED IN CL. (VIII) HAS TO B E READ IN CONTEXT OF THE OBJECT OF PUBLISHING PERIODICALS, BOOKS, PAMPHL ETS AND LITERATURE. THEREFORE, SO READ, IT BECOMES PART OF THE EDUCATIONAL ACTIVITIES OF THE ASSESSEE-CO-OPERATIVE UNION. THE SUBSIDIARY OBJECTS SUCH AS PRINTING AND PUBLISHING BOOKS AND LITERATUR E ON THE RELEVANT SUBJECTS ARE IN OUR JUDGMENT ANCILLIARY AND DO NOT DETRACT FROM ITS EXCLUSIVELY EDUCATIONAL CHARACTER. THE QUESTION WHE THER AN EDUCATIONAL INSTITUTION IS EXISTING SOLELY FOR EDUC ATIONAL PURPOSES OR NOT CAN ALSO BE RESOLVED WITH REFERENCE TO THE ACTI VITIES ACTUALLY CARRIED ON BY IT AND, AS NOTED ABOVE, THE LIST OF A CTIVITIES OF THE ASSESSEE CLEARLY INDICATES THAT IT IS EXISTING SOLE LY FOR EDUCATIONAL PURPOSES. IT CANNOT BE DOUBTED THAT THE ASSESSEE WA S A SOCIETY FOR DIFFUSION OF A CERTAIN BRANCH OF KNOWLEDGE OF THE C O- OPERATIVE MOVEMENT IN VARIOUS FIELDS GOVERNING HUMAN LIFE AND THE ACTIVITIES FOR THE PURPOSES WERE CARRIED OUT IN AN ORGANISED A ND SYSTEMATIC MANNER BY CONDUCTING REGULAR COURSES FOR IMPARTING INSTRUCTION AND TRAINING ON VARIOUS SUBJECTS INCLUDED IN THE CURRIC ULA AS IS REFLECTED FROM THE LIST OF ITS ACTIVITIES. THERE IS NO DISPUT E ABOUT THE FACT THAT THE ASSESSEE-CO-OPERATIVE UNION IS GIVEN FINANCIAL ASSISTANCE BY THE GOVERNMENT. THE RESOLUTIONS OF THE GOVERNMENT DT. 1 5TH FEB., 1968 AND 10TH DEC., 1982 [MENTIONED IN PARA 8 OF THE ORD ER OF THE CIT(A)] CLEARLY INDICATE THAT THE GRANTS SANCTIONED BY THE GOVERNMENT ARE FOR EDUCATIONAL PURPOSES. THE GOVERNMENT HAD SANCTI ONED RS. 15 LAKHS FOR THE YEAR 1982-83 WHICH APPEARS TO HAVE BE EN RAISED TO RS. 20 LAKHS FROM THE YEAR 1988-89. WE ARE FULLY SA TISFIED FROM THE NATURE OF THE ACTIVITIES OF THE ASSESSEE-CO-OPERATI VE UNION AND ITS OBJECTS THAT THE ASSESSEE IS EXISTING EXCLUSIVELY F OR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSES OF PROFITS. THE A SSESSEE WAS PUBLISHING TWO JOURNALS : (1) 'SAHAKAR', A WEEKLY J OURNAL HAVING CIRCULATION OF 6,700 COPIES, AND (2) 'GRAM SWARAJ', A MONTHLY MAGAZINE HAVING CIRCULATION OF 7,150 COPIES. BOTH T HESE JOURNALS 16 WERE PUBLISHED IN CONNECTION WITH THE ACTIVITIES OF THE ASSESSEE AND ON THE SUBJECT OF CO-OPERATIVE MOVEMENT. THE ASSESS EE WAS ALSO HAVING AN AUDIO-VISUAL UNIT FOR EXHIBITING FILMS ON CO-OPERATIVE MOVEMENT TO EDUCATE THE MASSES. IT ALSO APPEARS THA T THE ASSESSEE MAINTAINED A RICH LIBRARY ON THE SUBJECT OF CO-OPER ATION. AS NOTICED ABOVE, FROM THE OBJECTS OF THE ASSESSEE, IT IS COND UCTING TRAINING CENTRES AND COLLEGES FOR VARIOUS COURSES HAVING BEA RING ON THE FIELD OF CO-OPERATIVE MOVEMENT. IT APPEARS TO US THAT THE DECISION OF THE TRIBUNAL WHICH SEEKS TO REST IT ON THE OBSERVATIONS MADE BY THE SUPREME COURT IN 'LOK SHIKASHANA TRUST'S CASE (SUPR A), FOR HOLDING THAT THE ASSESSEE IS NOT ENTITLED TO EXEMPTION UNDE R S. 10(22) OF THE ACT IS BASED ON A COMPLETE MISREADING OF THE OBSERVA TIONS OF THE SUPREME COURT. IN LOK SHIKASHANA TRUST'S CASE (SUPR A) THE SUPREME COURT WHILE DEALING WITH THE PROVISIONS OF S. 11 R/W S. 2(15) OF THE ACT WHICH DEFINES CHARITABLE PURPOSES ' OBSERVED AS UNDER : 'THE SENSE IN WHICH THE WORD EDUCATION' HAS BEEN U SED IN S. 2(15) IN THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAININ G 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 FURT HER KNOWLEDGE CONSTITUTES EDUCATION. ACCORDING TO THIS WIDE AND E XTENDED SENSE, TRAVELLING IS EDUCATION, BECAUSE AS A RESULT OF TRA VELLING YOU ACQUIRE FRESH KNOWLEDGE....... BUT THAT IS NOT THE SENSE IN WHICH THE WORD EDUCATION' IS USED IN CL. 15 OF S. 2. WHAT EDUCAT ION' CONNOTES IN THAT CLAUSE IS THE PROCESS OF TRAINING AND DEVELOPI NG THE KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENTS BY NORMAL SCH OOLING.' THE SUPREME COURT IN THE ABOVE OBSERVATIONS BY REFE RRING TO THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO THE YOUNG HAS ONLY CITED AN INSTANCE IN ORDER TO INDICATE AS TO W HAT THE WORD EDUCATION' APPEARING IN S. 2(15) OF THE ACT WHICH DEFINES CHARITABLE PURPOSES' IS INTENDED TO MEAN. WE ARE CERTAIN THAT THESE OBSERVATIONS WERE NOT INTENDED TO KEEP OUT OF THE M EANING OF THE WORD EDUCATION', PERSONS OTHER THEN YOUNG'. THE E XPRESSION SCHOOLING' ALSO MEANS 'THAT SCHOOLS, INSTRUCTS OR EDUCATES' (THE OXFORD ENGLISH DICTIONARY, VOL. IX 217). THE SUPREM E COURT HAS OBSERVED THAT THE WORD EDUCATION' ALSO CONNOTES TH E WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIV ED. THIS CLEARLY INDICATES THAT THE OBSERVATIONS OF THE SUPREME COUR T WERE NOT INTENDED TO GIVE A NARROW OR PEDANTIC SENSE TO THE WORD EDUCATION'. BY GIVING FURTHER ILLUSTRATIONS OF A TRAVELLER GAIN ING KNOWLEDGE, VICTIMS OF SWINDLERS AND THIEVES BECOMING WISER, TH E VISITORS TO NIGHT CLUBS ADDING TO THEIR KNOWLEDGE AND HIDDEN MY STERIES OF LIFE, THE SUPREME COURT HAS INDICATED THAT THE WORD EDUC ATION' 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 PROPER CONFINES OF THE WORD EDUCATION' IN THE CONT EXT OF THE PROVISIONS OF S. 2(15) OF THE ACT. IT WILL NOT BE P ROPER TO CONSTRUE THESE OBSERVATIONS IN A MANNER IN WHICH THEY ARE CO NSTRUED BY THE TRIBUNAL WHEN IT INFERS FROM THESE OBSERVATIONS, IN PARA 17 OF ITS JUDGMENT, THAT THE WORD EDUCATION' IS LIMITED TO SC HOOLS, 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 S CHOLASTIC INSTRUCTIONS BUT OTHER FORM OF EDUCATION ALSO ARE I NCLUDED IN THE WORD EDUCATION'. AS NOTICED ABOVE, THE WORD SCHOO LING' ALSO MEANS INSTRUCTING OR EDUCATING. IT, THEREFORE, CANNOT BE SAID THAT THE WORD 17 EDUCATION' HAS BEEN GIVEN AN UNDULY RESTRICTED MEA NING BY THE SUPREME COURT IN THE SAID DECISION. THOUGH IN THE C ONTEXT OF THE PROVISIONS OF S. 10(22) THE CONCEPT OF EDUCATION NE ED NOT BE GIVEN ANY WIDE OR EXTENDED MEANING, IT SURELY WOULD ENCOM PASS SYSTEMATIC DISSEMINATION OF KNOWLEDGE AND TRAINING IN SPECIALISED SUBJECTS AS IS DONE BY THE ASSESSEE. THE CHANGING T IME AND THE EVER WIDENING HORIZONS OF KNOWLEDGE MAY BRING IN CH ANGES IN THE METHODOLOGY OF TEACHING AND A SHIFT FOR THE BETTER IN THE INSTITUTIONAL SETUP. ADVANCEMENT OF KNOWLEDGE BRING WITHIN ITS FO LD SUITABLE METHODS OF ITS DISSEMINATION AND THOUGH THE PRIMARY METHOD OF SITTING IN A CLASS-ROOM MAY REMAIN IDEAL FOR MOST O F THE INITIAL 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 FORMULA OR TO FLOW IT ONL Y THROUGH A DEFINED CHANNEL. ITS PROGRESS LIES IN ACCEPTANCE OF NEW IDE AS AND DEVELOPMENT OF APPROPRIATE MEANS TO REACH THEM TO T HE RECIPIENTS. 19. IN VIEW OF THE ABOVE WE HOLD THAT THE ACTIVITIE S CARRIED OUT BY THE ASSESSEE SOCIETY OF CONDUCTING COURSES A ND TRAINING PROGRAMMES AMOUNTS TO EDUCATION. 20. MOREOVER THE FINDING OF THE LD.CIT(A) THAT THE ASSESSEE IS CONDUCTING COACHING CLASSES FOR COMPETITIVE EXAM S IS INCORRECT. THE SAME HAS NEITHER BEEN STATED IN THE OBJECTS OF THE ASSESSEE SOCIETY NOR DO WE FIND THAT ANY SUC H SUBMISSION WAS EVER MADE BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. WE FAIL TO UNDERSTAND THE BASIS OF ARR IVING AT THIS FINDING BY THE REVENUE. THEREFORE THE CASE LA W RELIED UPON BY THE REVENUE, TO HOLD THAT THE ACTIVITIES OF THE ASSESSEESS SOCIETY ARE NOT IN THE NATURE OF EDUCATI ON, IN THE CASE OF BIHAR INSTITUTE OF MINING 208 ITR 608 DOES NOT APPLY IN THE CASE BEFORE US ,SINCE IN THE SAID CASE IT WAS HELD THAT COACHING CLASSES ARE NOT EDUCATIONAL INST ITUTIONS. 21. FURTHER WE AGREE WITH THE LD.COUNSEL FOR THE AS SESSEE THAT THE REVENUE EARNED FROM LETTING OUT PREMISES T O VARIOUS ORGANIZATIONS IS INCIDENTAL TO THE MAIN OBJ ECT OF IMPARTING EDUCATION THROUGH TRAINING PROGRAMMES AND 18 STUDY COURSES CONDUCTED. THE ASSESSEE HAS ALL ALON G CONTENDED THAT THE ACTIVITY OF LETTING OUT ITS PREM ISES IS UNDERTAKEN DURING THE COURSE OF CARRYING OUT ITS AC TIVITIES OF IMPARTING TRAINING AND CONDUCTING STUDY COURSES. IT IS NOT THE CASE OF THE REVENUE, NOR HAS IT BEEN POINTE D OUT TO US THAT LETTING OUT OF THE PREMISES OF THE ASSESSEE SOCIETY HAS BEEN DONE FOR ANY OTHER PURPOSE OTHER THAN LETT ING IT OUT DURING THE COURSE OF CONDUCTING TRAINING PROGRA MS AND STUDY COURSES. THEREFORE, THE REVENUE EARNED THERE FROM ARE INCIDENTAL TO CARRYING OUT OF THE MAIN OBJECTIVES O F ASSESSEE SOCIETY OF IMPARTING TRAINING TO THE PUBLIC ADMINIS TRATION OFFICERS OF THE GOVERNMENT OF PUNJAB. 22. FURTHER WE ALSO FIND NO MERIT IN THE CONTENTION OF THE REVENUE THAT PROFIT MAKING IS ITS MAIN OBJECTIVE OF THE ASSESSEE SOCIETY. THE BALANCE SHEET AND INCOME & EXPENDITURE ACCOUNT OF THE ASSESSEE FOR THE YEAR EN DED ON 31.03.2013, PLACED BEFORE US AT PAPER BOOK PAGE NOS .80 & 81 SHOW THAT THE DURING THE YEAR THE ASSESSEE HAD E ARNED NO SURPLUS AT ALL, ON THE CONTRARY IT HAD EXCESS OF EXPENDITURE OVER INCOME OF APPROX. RS.1.95 CRORES A ND ITS ACCUMULATED LOSSES OVER THE YEARS WAS RS.7.18 CRORE S. THE ENTIRE FUNDS OF THE ASSESSEE STAND INVESTED IN FIXE D ASSETS, FUND INVESTMENTS AND ADVANCES NONE OF WHICH ,EXCEPT ADVANCES TO PSIEC, HAVE BEEN FOUND TO BE NOT FOR TH E PURPOSE OF THE ASSESSEES OBJECTS. . 23. AS FOR THE ARGUMENT OF THE LD. DR THAT THE ADV ANCES MADE TO PUNJAB SMALL INDUSTRIES & EXPORT CORPORATIO N LTD. 19 NOT BEING IN ACCORDANCE WITH THAT PRESCRIBED U/S 11 (5) OF THE ACT, WE FIND NO MERIT IN THIS CONTENTION OF THE REVENUE ALSO. THE ASSESSEE HAS ALL ALONG CLAIMED BEFORE TH E LOWER AUTHORITIES THAT THE PURPOSE OF MAKING SUCH ADVANCE S WAS FOR DEVELOPMENT OF VACANT LAND OF THE INSTITUTE FOR EXPANSION OF ITS INFRASTRUCTURE. COPY OF THE AGREE MENT ENTERED INTO WITH PSIEC WAS ALSO FILED BEFORE THE L OWER AUTHORITIES. IN VIEW OF THE SAME, THE PURPOSE OF M AKING AFORESAID ADVANCES WAS FOR DEVELOPING THE INFRASTRU CTURE OF THE ASSESSEE SOCIETY FOR FURTHERING ITS OBJECTIVES , WHICH IS AN APPLICATION OF INCOME IN FURTHERANCE OF ITS STAT ED OBJECTIVES AND CLEARLY NOT AN INVESTMENT IN VIOLATI ON OF THE MODES OF INVESTMENTS PRESCRIBED U/S 11(5) OF THE AC T WHICH PRESCRIBES THE MODES IN WHICH ACCUMULATED MONEY IS TO BE INVESTED OR DEPOSITED BY SOCIETIES OR INSTITUTES CL AIMING EXEMPTION U/S 11 OF THE ACT. 24. THEREFORE, WE HOLD THAT THE ACTIVITIES OF THE A SSESSEE SOCIETY ARE EDUCATIONAL AND NOT FOR THE PURPOSE OF MAKING PROFIT AND THUS ASSESSEE SOCIETY FULFILLS BASIC CON DITION OF CLAIMING EXEMPTION U/S 10(23C)(IIIAB) OF THE ACT. 25. IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM EXEMPTION U/S 10(23C)(IIIAB) OF T HE ACT. GROUND OF APPEAL NOS. 2, 3 & 7 THEREFORE ARE ALLOWE D 26. GROUND NO.4 IS CONSEQUENTIAL TO THE DENIAL OF EXEMPTION U/S 10(23C)(IIIAB) WHICH HAVING BEEN ALLO WED TO THE ASSESSEE AS ABOVE BECOMES INFRUCTUOUS. 20 27. GROUND NOS.5 & 6 ARE ALTERNATIVE GROUNDS RAISE D BY THE ASSESSEE CONTENDING THAT THE RECEIPTS DID NO T CONSTITUTE INCOME IN THE FIRST PLACE. NO ARGUMENTS ON THE SAID GROUNDS WERE ADVANCED BY THE LD.COUNSEL FOR TH E ASSESSEE AND EVEN OTHERWISE SINCE THE ASSESSEE HAS BEEN HELD ELIGIBLE FOR EXEMPTION U/S 10(23C)(IIIAB) IN P ARA 14 OF OUR ORDER ABOVE, THE SAID GROUNDS ARE OF NO CONSEQU ENCE. 28. THE APPEAL OF THE ASSESSEE THEREFORE STANDS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30 TH OCTOBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH
