M/s. R K Educational Trust, New Delhi V. DIT(Exemptions), New Delhi

ITA 3748/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7336 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 04-08-2016
• Assessment Year: misc
• Appeal Filed On: 26-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CIRCUMSTANCES OF CASE
• Keywords: Charitable institution; Competent authority
• Section: 12A; 12AA

Judgement Text

ITA NO. 3748/DEL/2014 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI ANADI N MISHRA, ACCOUNTANT MEMBER ITA NO.:- 3748/DEL/2014 ASSESSMENT YEAR: ---- R.K. EDUCATIONAL TRUST 8A/8, WEA, KAROL BAGH NEW DELHI 110 005. PAN AACTR1512Q VS. D IT (EXEMPTIONS) NEW DELHI. (APPELLANT) (RESPONDENT) O R D E R PER ANADI N MISHRA, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE DIT(E), DELHI DATED 30.4.2014. THE GR OUNDS OF APPEAL ARE AS UNDER :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED DIRECTOR INCOME TAX ASSESSEE BY : SHRI A.K. SRIVASTAVA, FCA DEPARTMENT BY: MRS. MEENAKSHI SINGH, CIT(DR) DATE OF HEARING 04 /08 /2016 DATE OF PRONOUNCEMENT 26 /08 /2016 ITA NO. 3748/DEL/2014 2 (EXEMPTIONS) ERRED IN NOT GRANTING REGISTRATION U/S 12A OF THE INCOME-TAX ACT, 1961 TO THE TRUST. 2. THAT THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTIONS) HAVING OBSERVED THAT R K CONVENT SCHOOL EDUCATIONAL SOCIETY HAD ENTERED INTO A MOU WITH THE DELHI UNIVERSITY, TO PROVIDE TRAINING TO THE STUDENTS ENROLLED FOR VARIOUS DEGREE COURSES UNDER UNIVERSITY OF DELHI, IN THE FIELD OF ANNIMATION, RADIO & TV BROADCASTING ARTS, THEATRE ART ETC., AS WELL AS OBSERVING THAT THE APPLICANT TRUST WAS IMPARTING CERTAIN COURSES (STATED IN THE ORDER),GROSSLY ERRED IN HOLDING THAT THE ACTIVITIES OF THE TRUST DO NOT FALL UNDER THE DEFINITION OF EDUCATION AND THE TRUST IS NOT IMPARTING EDUCATION. 3. THAT THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTIONS) ERRED IN HOLDING THAT THE MOU BETWEEN R K CONVENT SCHOOL EDUCATIONAL SOCIETY AND THE APPLICANT TRUST IS IN THE NATURE OF DIVISIO N OF ASSETS OF A FAMILY UNIT. 3.1 THAT THE ABOVE AND OTHER OBSERVATIONS OF THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTIONS), IN THE ORDER DATED 30.04.2014, ARE NOT ONLY ERRONEOUS AND VAGUE BUT ARE ALSO NOT SUPPORTED WITH ANY FINDING TO THE EFFECT THAT THE ACTIVITIES OF THE TRUST ARE IN THE NATURE OF FAMILY BUSINESS. 4. THAT THE OBSERVATIONS OF THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTIONS) THAT R K CONVENT SCHOOL EDUCATIONAL SOCIETY WAS NOT LEGALLY ENTITLED TO PAR T WITH ITS ASSETS WITHOUT SEEKING NECESSARY APPROVALS! SANCTIONS FROM THE COMPETENT AUTHORITY, WITHOUT CITING THE EXACT DEFAULT, IF ANY , IS NOT RELEVANT IN DISPOSING THE APPLICANT TRUSTS' REQUEST FOR REGISTRATION U/S 12A OF THE INCOME-TAX ACT, 1961. 5. THAT THE OBSERVATIONS OF THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTIONS) ARE CONTRADICTORY, BASED ITA NO. 3748/DEL/2014 3 ON SURMISES AND CONJECTURES AND ARE NOT SUPPORTED WITH ANY EVIDENCE. 2. ALL THE GROUNDS OF APPEAL ARE AGAINST THE ORDER OF THE LD. DIT(E) REFUSING TO GRANT REGISTRATION U/S 12AA R.W.S. 12A OF I.T. ACT. FOR THE SAKE OF CONVENIENCE THE GROUND S OF APPEAL ARE TAKEN UP TOGETHER. THE APPELLANT TRUST W AS CREATED BY WAY OF TRUST DEED ON 18 TH MARCH, 2013 BY MR. DEEPAK BANSAL. THERE ARE FOUR TRUSTEES OF THE APPEL LANT TRUST NAMELY MR. R.K. GOEL, MR. GAGAN GAUTAM, MR. SANJAY AGARWAL, & MRS. NEHA BANSAL. THE CORPUS OF THE APP ELLANT TRUST, TOTALLING RS. 95,000/- CONSISTS OF RS. 11,00 0/- RECEIVED FROM EACH OF THE FOUR TRUSTEES AND RS. 51,000/- REC EIVED FROM MR. DEEPAK BANSAL, AUTHOR OF THE TRUST ON DIFF ERENT DATES. THE APPELLANT TRUST APPLIED FOR REGISTRATION U/S 12AA/ 12A OF I.T. ACT VIDE APPLICATION DATED 18.10.2013. THE LD. DIT(E) CALLED FOR CERTAIN INFORMATION ON 17 DIFFERE NT POINTS VIDE LETTER DATED 28.10.2013 (PAGE 11 OF PAPER BOOK FILED BY THE APPELLANT). THE APPELLANT SUBMITTED REPLY VIDE LETTER DATED 18.11.2013 (PAGES 12 TO 18 OF PAPER BOOK SUBM ITTED BY APPELLANT). FURTHER DETAILS WERE ALSO SUBMITTED BY THE APPELLANT VIDE LETTERS DATED 3.2.2014 (PAGES 19 TO 24 OF ITA NO. 3748/DEL/2014 4 PAPER BOOK SUBMITTED BY APPELLANT) AND LETTER DATED 12.2.2104 (PAGES 25 TO 29 OF PAPER BOOK SUBMITTED B Y APPELLANT). LD. DIT(E) VIDE IMPUGNED ORDER DATED 30 .4.2014 REJECTED THE APPLICATION FILED BY THE APPELLANT TRU ST FOR GRANT OF REGISTRATION U/S 12AA / 12A OF I.T. ACT. THE LD. DIT(E) REJECTED THE APPLICATION FOR GRANT OF REGISTRATION ON THE FOLLOWING GROUNDS :- A) THE LD. DIT(E) HELD THAT THE ACTIVITIES OF THE APPLICANT TRUST WERE NON GENUINE. THE LD. DIT(E) CA ME TO THIS CONCLUSION ON THE BASIS OF FOLLOWING GROUND S : I) THE TRUST HAS BEEN CREATED BY SHRI DEEPAK BANSAL PRIMARILY TO TAKE OVER PART OF THE ACTIVITIE S OF R.K. CONVENT SCHOOL EDUCATION SOCIETY BEING RUN UNDER THE PRESIDENTSHIP OF SHRI N.C. BANSAL FATHER OF SHRI DEEPAK BANSAL. THE WHOLE TRANSACTION, LD. DIT(E) HELD WAS IN THE NATURE OF DIVISION OF THE ASSETS OF A FAMILY UNIT FATHER GIVING A SHARE IN HIS PROPERTY TO HIS SON. FOR COMING TO HIS CONCLUSION LD. DIT(E) NOTED AS UNDER :- 5.1 THE APPLICANT TRUST, AS PER ITS OBJECTS, HAS BEEN FORMED TO ESTABLISH, MAINTAIN, ITA NO. 3748/DEL/2014 5 SUPPORT AND RUN SCHOOL COLLEGES, SOCIAL SERVICE CENTRE, INDUSTRIAL TRAINING CENTRE, SKILL DEVELOPMENT CENTRES, COACHING INSTITUTES, ETC. THE AUTHOR OF THE TRUST, SHRI DEEPAK BANSAL IS SON OF THE PRESIDENT OF THE SOCIETY, R. K. CONVENT SCHOOL EDUCATIONAL SOCIETY, SHRI N. C. BANSAL. THE SAID SOCIETY IS REGISTERED U/S. 12AA OF THE INCOME TAX ACT, 1961 AND HAS BEEN CARRYING OUT ITS EDUCATIONAL ACTIVITIES SINCE MANY YEARS. THE SOCIETY HAS PARTED WITH ITS SOME OF THE ACTIVITIES SINCE MANY YEARS. THE SOCIETY HAS PARTED WITH ITS SOME OF THE ACTIVITIES R.K. FILMS AND MEDIA ACADEMY AND R. K. COLLEGE OF SYSTEMS AND MANAGEMENT AND AUTHORIZED THE APPLICANT TRUST TO CARRY OUT THE SAME. FURTHER, SOME OF THE ASSETS OF THE SOCIETY TOO HAVE BEEN TRANSFERRED TO THE TRUST AT ITS BOOK VALUE. IN THIS REGARD, A REFERENCE IS MADE TO A DOCUMENT SUBMITTED BY THE APPLICANT DURING THE COURSE OF PROCEEDINGS WHICH STATES AS UNDER: 'THE SECRETARY SUBMITTED THAT MR. DEEPAK BANSAL, THE ADMINISTRATIVE IN-CHARGE OF THE SOCIETY'S UNIT 'R. K. FILMS & MEDIA ACADEMY' AT NEW DELHI, HAS CONVEYED TO HIM THAT HE IS INCLINED TO START AN EDUCATIONAL TRUST BY HIMSELF AND AS HE HAS BEEN LONG ASSOCIATED WITH THE SOCIETY IN A SUCCESSFUL & RESPONSIBLE ADMINISTRATIVE CAPACITY TO MANAGE THE AFFAIRS OF THE SOCIETY'S UNIT VIZ. R. K. FILMS & MEDIA ACADEMY AT NEW DELHI, IS WILLING TO TAKE OVER THE ENTIRE SAID UNIT TO BE RUN UNDER THE BANNER OF HIS PROPOSED EDUCATIONAL TRUST TO BE DULY REGISTERED AS A SOCIAL & CHARITABLE TRUST. AFTER NEGOTIATING ON THE ISSUE IT WAS RESOLVED THAT IF THE AIM AND OBJECTS OF THE PROPOSED EDUCATIONAL TRUST TO BE AUTHORIZED BY SH. DEEPAK BANSAL, ARE THE SAME AND IF THE SOCIETY CAN LEGALLY TRANSFER ITS ASSETS OF THE ITA NO. 3748/DEL/2014 6 UNIT TO THE SAID NEWLY CREATED EDUCATIONAL TRUST OF SHRI DEEPAK BANSAL, THEN BELIEVING THE CREDIBILITY OF SH. DEEPAK BANSAL TO RESPONSIVELY RUN THE UNIT IN FUTURE WITH THE SAME NAME AND WITH A VIEW TO SHRED THE RESPONSIBILITIES OF EXISTING ALREADY ESTABLISHED UNITS TO ENABLE THE SOCIETY TO CONCENTRATE ON FUTURE EXPANSIONS, THE PROPOSED OFFER OF SH. DEEPAK BANSAL BE ACCEPTED & AND MODALITIES OF THE ASSETS TRANSFER BE WORKED OUT AND BE WRITTEN THROUGH A MEMORANDUM OF UNDERSTANDING. RATHER THE AFFAIR AND ASSETS OF THE OTHER UNIT OF THE SOCIETY AT NEW DELHI I.E. R. K. COLLEGE OF SYSTEMS & MANAGEMENT, AT PUNJABI BAGH, BE ALSO WASTED WITH THE PROPOSED EDUCATIONAL TRUST OF SHRI DEEPAK BANSAL, IF SO MUTUALLY AGREED THAT THE CHAIRMAN & THE PRESIDENT OF THE SOCIETY SH. N. C. BANSAL BE AND IS HEREBY AUTHORIZED TO FINALIZE THE MEMORANDUM OF UNDERSTANDING WITH THE PROPOSED EDUCATIONAL TRUST OF SHRI DEEPAK BANSAL AFTER ITS DUE REGISTRATION & TO GIVE EFFECT TO THE MUTUALLY AGREED TERMS. ' 5.2 IT IS THUS CLEAR THAT THE TRUST HAS ACTUALLY BEEN CREATED/FORMED BY SHRI DEEPAK BANSAL, PRIMARILY TO TAKEOVER PART OF THE ACTIVITIES OF THE SOCIETY NAMED R. K. CONVENT SCHOOL ' EDUCATIONAL SOCIETY, BEING RUN UNDER THE PRESIDENT-SHIP OF SHRI N. C BANSAL, FATHER OF SHRI DEEPAK BANSAL, AS ALREADY MENTIONED. THE WHOLE TRANSACTION IS IN FACT IN THE NATURE OF DIVISION OF THE ASSETS OF A FAMILY UNIT - FATHER GIVING A SHARE IN HIS PROPERTY TO HIS SON. THE PARENT SOCIETY, R. K. CONVENT SCHOOL EDUCATIONAL SOCIETY IS ALREADY SUCCESSFULIY RUNNING THE VARIOUS COURSES FOR WHICH IT HAS ALREADY GOT THE NECESSARY AFFILIATION.. THE COURSES ARE BEING RUN FROM THE SAME PREMISES WITH THE SAME FACULTY AND THE SAME ITA NO. 3748/DEL/2014 7 INFRASTRUCTURE. IN FACT, THE ACTIVITIES ALREADY BEING RUN BY THE SOCIETY ARE BEING PASSED OFF AS THE ACTIVITY OF THE APPLICANT TRUST. THE REASONS CAN BE MANY THE SOCIETY WISHES TO KEEP ITS TURNOVER BELOW A THRESHOLD LIMIT TO ESCAPE THE REQUIREMENT OF LAW/SCRUTINY OF RETURNS WHICH IS LINKED TO THE TURNOVER, OR A FATHER IN HIS LOW FOR HIS SON WANTS TO SETTLE HIS SON IN BUSINESS AS HAPPENS IN ANY OTHER BUSINESS FAMILY. 5.3. IT NEEDS TO BE NOTED THAT SHRI DEEPAK BANSAL IS ALREADY ADMINISTRATIVE IN-CHARGE OF SOCIETYS UNIT WHICH HAS BEEN TRANSFERRED TO THE TRUST SETTLED BY HIM. THUS THE SOCIETY HAS NOT APPARENT GAIN OF BETTER MANAGEMENT OR CONTROL BY PASSING/ TRANSFERRING THE CONTROL OF SOME OF THE ACTIVITIES TO ANOTHER TRUST WHICH HAPPENS TO BE SETTLED BY THE SAME PERSON I.E. SH. DEEPAK BANSAL, WHO IS ALREADY RUNNING THE SAME WHILE BEING IN THE SOCIETY. II) LD. DIT(E) HELD THAT THE WHOLE ARRANGEMENT NOT BEING GENUINE, IT WAS IN THE INTEREST OF REVENUE THAT SUCH TRANSACTIONS ARE NOT ALLOWED TO BE PASSED OFF AS GENUINE CHARITABLE ACTIVITIES SO THAT THE TAX BENEFIT MEANT FOR TRUE CHARITABLE INSTITUTE IS NOT USURPED BY SCHEMING / OPPORTUNIST ENTREPRENEURS III) THE LD. DIT(E) HELD THAT R.K. CONVENT SCHO OL EDUCATION SOCIETY BEING REGISTERED UNDER SOCIETIES ITA NO. 3748/DEL/2014 8 REGISTRATION ACT AND ALSO UNDER SECTION 12AA OF I.T . ACT WAS NOT LEGALLY ALLOWED TO PART WITH ITS ASSETS (TO THE APPLICANT TRUST) WITHOUT SEEKING NECESSARY APPROVALS / SANCTIONS FROM COMPETENT AUTHORITY IN TERMS OF SOCIETIES REGISTRATION ACT AND ALSO FROM DIRECTORATE OF INCOME TAX (EXEMPTIONS). LD. DIT(E) ALSO HELD THAT R.K. CONVENT SCHOOL EDUCATION SOCIETY WAS NOT AUTHORISED TO RUN COURSES UNDER ITS BANNER WITHOUT HAVING NECESSARY PERMISSION / AFFILIATION IN THIS REGARD FROM THE COMPETENT AUTHORITY. THUS THE LD. DIT(E) HELD THAT A TRUST (T HE APPELLANT) WHICH WAS RUNNING ITS ACTIVITIES OUT OF AN ILLEGAL / UNAUTHORISED ARRANGEMENT (WITH R.K. CONVENT SCHOOL EDUCATION SOCIETY) CANNOT BE HELD TO BE CARRYING OUT GENUINE ACTIVITIES. IV) THE LD. DIT (E) OBSERVED THAT THE COURSES RUN B Y THE TRUST (THE APPELLANT) ARE NEITHER RECOGNISED NO R A PART OF REGULAR CURRICULUM OF ANY UNIVERSITY / EDUCATION PROGRAMME; AND FURTHER, THAT THESE WERE JUST SKILL DEVELOPMENT / ENHANCEMENT COURSES / PROGRAMME WHICH CANNOT BE TERMED AS EDUCATION. ITA NO. 3748/DEL/2014 9 THE LD. DIT(E) MADE A REFERENCE TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SOLE TRUSTEE LOK SHIKSHANA TRUST VS. COMMISSIONER OF INCOME TAX (1975) 10 ITR 234 (SC) AND QUOTED THE FOLLOWING FROM THIS DECISION: THE SENSE IN WHICH THE WORD EDUCATION HAS BEEN USED IN SECTION 2(15) IS THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO 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 FURTHER KNOWLEDGE CONSTITUTES EDUCATION. 3. DURING THE COURSE OF HEARING IN ITAT WE HAV E HEARD BOTH SIDES. WE HAVE ALSO PERUSED THE MATERIALS ON R ECORD. LD. AR OF THE APPELLANT CONTENDED THAT THE IMPUGNED ORDER DATED 30.04.2014 OF THE LD. DIT(E) WAS BAD IN LAW B EING BASED ON IRRELEVANT CONSIDERATIONS, AND EXCEEDED TH E ITA NO. 3748/DEL/2014 10 AUTHORITY VESTED IN HER IN DECIDING THE ISSUE OF RE GISTRATION U/S 12AA/ 12A OF I.T. ACT. IN SUPPORT OF THIS CONTE NTION, HE ARGUED THAT SEEKING INFORMATION ON AS MANY AS 17 IS SUES VIDE NOTICE DATED 28.10.2013 WAS BEYOND THE AUTHORITY VE STED IN HER IN DECIDING THE ISSUE OF REGISTRATION. HE ARGUE D THAT THE LD. DIT(E) WAS ONLY REQUIRED TO SATISFY HERSELF ABO UT THE OBJECTS OF THE TRUST AND ABOUT THE GENUINENESS OF T HE ACTIVITY. FOR THIS PREPOSITION HE RELIED ON NUMEROU S JUDICIAL DECISIONS NAMELY : DIRECTOR OF INCOME TAX (EXEMPTI ONS) V MEENAKSHI AMMA ENDOWMENT TRUST (2011) 50 DTR (KAR) 243 / (2013) 354 ITR 219, CIT VS. SPRING DALE EDUCATION S OCIETY 204 TAXMAN 11 (P&H) (HC) (MAG.)(2012), CIT VS. BABA DE EP SINGH EDUCATIONAL SOCIETY (2012) 206 TAXMAN 131 (P &H) (H C) (MAG.), CIT VS. RED ROSE SCHOOL (2007) 162 TAXMAN 1 9 (ALL.), PRAYER FOR INDIA V. ITO (2011) 7 ITR (TRIB.) 201 (C HENNAI), DIRECTOR OF INCOME TAX V. FOUNDATION OF OPTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE (2013) 355 ITR 361 (DELHI), CIT (E) V. SAI ASHISH CHARITABLE TRUST , J AIPAL SINGH SHARMA TRUST VS. CIT GHAZIABAD I.T. NO. 6475/DEL/20 14 , SHRIRAM EDUCATION FOUNDATION VS. DIT(E) ITA NO. 1399/DEL/2011 & ITA NO. , JAIPAL SINGH SHARMA TRUST VS. CIT ITA NO. 3748/DEL/2014 11 GHAZIABAD I.T. NO. 6475/DEL/2014 AND SHRIRAM EDUCAT ION FOUNDATION VS. DIT(E) ITA NO. 1399/DEL/2011 & ITA N O. 3011/DEL/2011. THE LD. AR OF THE APPELLANT FURTHER ARGUED THAT THE OBSERVATION OF THE LD. DIT(E) THAT THE TRA NSFER OF THE ACTIVITIES OF R.K. CONVENT SCHOOL EDUCATION SOC IETY APPELLANT TRUST AMOUNTED TO TRANSFER OF FAMILY ASSE TS WAS TOTALLY UNCONCEIVABLE AND BEYOND IMAGINATION. LD. A R OF THE APPELLANT ALSO CONTENDED THAT THE OBSERVATION OF LD . DIT(E) THAT THE ACTIVITIES CARRIED OUT BY THE APPELLANT TR UST DID NOT AMOUNT TO EDUCATION WAS CONTRADICTORY IN ITSELF ; T HE LD. DIT(E) HAVING HERSELF STATED IN PARAGRAPH 3 OF HER ORDER THAT THE ACTIVITIES OF R.K. CONVENT SCHOOL EDUCATION SOC IETY (WHICH WAS EARLIER CARRYING OUT THESE ACTIVITIES) W ERE EDUCATIONAL ACTIVITIES. LD. AR OF THE APPELLANT FUR THER RELIED ON DECISIONS OF DELHI BENCH OF ITAT IN DIVYA YOG MA NDIR TRUST, HARIDWAR ITA NO. 387/DEL/2013 B BENCH ORDER DATED 27.8.2013 AND SIVANANDA YOGA VEDANTA NATRAJ SOCIETY VS. ITO(E) ITA NO. 311/DEL/2015 ORDER DATED 29.7.2015. LD. DR, HOWEVER STRONGLY SUPPORTED THE ORDER OF THE LD. DIT (E) AND RELIED ON THE ORDER PASSED BY LD. DIT(E). ITA NO. 3748/DEL/2014 12 4. FACTS OF THE CASE ARE NOT IN DISPUTE. THE OB JECTS FOR WHICH THE APPELLANT TRUST WAS FOUNDED ARE STATED IN CLAUSE 3 OF THE TRUST DEED (PAGES 4 & 5 OF PAPER BOOK FILED BY APPELLANT). BESIDES OTHER OBJECTS, THE OBJECTS OF T HE APPELLANT TRUST INCLUDE, TO ESTABLISH, MAINTAIN, SU PPORT AND RUN SCHOOLS, COLLEGES, SOCIAL SERVICE CENTRES, INDU STRIAL TRAINING CENTRES, SKILL DEVELOPMENT CENTRES, COACHI NG INSTITUTES, BOARDING HOUSES, DAY SHELTERS, RESEARCH AND TRAINING CENTRES AND OTHER INSTITUTIONS OF EDUCATIO N, HAVING OBJECTS SIMILAR TO THOSE OF THIS TRUST FOR IMPARTIN G ELEMENTARY AND HIGHER EDUCATION, TECHNICAL, INDUSTR IAL OR COMMERCIAL KNOWLEDGE OR TRAINING AMONGST PUBLIC. R. K. EDUCATION TRUST (THE APPELLANT) HAS BEEN FORMED BY MR. DEEPAK BANSAL, SON OF MR. N.C. BANSAL (PRESIDENT OF R.K. CONVENT SCHOOL EDUCATION SOCIETY). R.K. CONVENT SCH OOL EDUCATION SOCIETY WAS RUNNING ITS EDUCATIONAL ACTIV ITIES THROUGH, INTER-ALIA, EDUCATIONAL UNITS NAMED R.K. F ILMS AND MEDIA ACADEMY, KAROL BAGH, NEW DELHI AND R.K. COLL EGE OF SYSTEMS AND MANAGEMENT, PUNJABI BAGH, NEW DELHI. R. K. CONVENT SCHOOL EDUCATION SOCIETY ENTERED INTO MOU W ITH THE APPELLANT TRUST FOR TAKE OVER OF THE SAID TWO UNITS OF R.K. ITA NO. 3748/DEL/2014 13 CONVENT SCHOOL EDUCATION SOCIETY BY THE APPELLANT T RUST VIDE RESOLUTION PASSED BY MANAGEMENT COMMITTEE OF R.K. C ONVENT SCHOOL EDUCATION SOCIETY, IN MEETING HELD ON 18.3.2 013, WHEREBY R.K. CONVENT SCHOOL EDUCATION SOCIETY TRAN SFERRED THE ASSETS AND AFFAIRS OF THE AFORESAID TWO EDUCATI ONAL UNITS OF R.K. CONVENT SCHOOL EDUCATION SOCIETY TO THE APP ELLANT TRUST. R.K. CONVENT SCHOOL EDUCATION TRUST WAS REGI STERED U/S 12AA R.W.S. 12A OF I.T. ACT AND WAS CARRYING OUT I TS EDUCATIONAL ACTIVITIES FOR MANY YEARS BEFORE TAKE O VER OF THE AFORESAID TWO EDUCATIONAL UNITS BY THE APPELLANT TR UST IN ACCORDANCE WITH AFORESAID MOU AND RESOLUTION. MR. D EEPAK BANSAL, AUTHOR OF THE APPELLANT TRUST, WAS ADMINIST RATIVE INCHARGE IN R.K. CONVENT SCHOOL EDUCATION SOCIETY A ND WAS ENGAGED IN RUNNING OF THE AFORESAID EDUCATIONAL UNI TS OF R.K. CONVENT SCHOOL EDUCATION SOCIETY WHILE THESE UNITS WERE BEING RUN BY R.K. CONVENT SCHOOL EDUCATION SOCIETY. THE APPELLANT TRUST, THROUGH THE AFORESAID EDUCATIONAL UNITS TAKEN OVER FROM R.K. CONVENT SCHOOL EDUCATION SOCIE TY IS IMPARTING PROFESSIONAL EDUCATION AND TRAINING THROU GH CERTAIN COURSES IN THE FIELDS OF MASS COMMUNICATION & JOURN ALISM(6 MONTHS COURSE), MASS COMMUNICATION AND JOURNALISM ( 1 YEAR ITA NO. 3748/DEL/2014 14 COURSES), ACTING (2 MONTHS COURSE), ACTING (3 MONTH S COURSE), ACTING (6 MONTHS COURSE) RADIO JOCKEY AND NEWS READ ING & ANCHORING (HINDI) (3 MONTHS COURSE), RADIO JOCKEY A ND NEWS READING & ANCHORING (ENGLISH) (3 MONTHS COURSE) AND ADVERTISING AND PUBLIC RELATIONS (6 MONTHS COURSE). LD. DIT(E) HAS NOTED THE DETAILS OF THESE COURSES IN PA RAGRAPH 4.2 OF HER ORDER. SHE ALSO HAD SPECIFICALLY ASKED THE A PPELLANT TRUST WHETHER IT WAS AFFILIATED TO ANY UNIVERSITY / GOVT. BODY / LOCAL BODY / EDUCATION BOARD , ETC. FOR CARRYING OUT SUCH COURSES ; TO WHICH, AS NOTED BY LD. DIT(E) IN HER O RDER ; THE APPELLANT TRUST, REPLIED AS UNDER :- OUR ACTIVITIES PRIMARILY CONSISTS OF PROVIDING VOCATIONAL EDUCATION ON NO PROFIT NO LOSS BASIS. THE NATURE OF OUR EDUCATIONAL COURSES IS DETAILED OUT I N ANNEXURE 3. WE HAVE ALSO ENCLOSED TWO LEAFLETS OF T HE COURSES BEING IMPARTED WITH THE ASSOCIATION OF UNIVERSITY OF DELHI AND SHYAM LAL COLLEGE. OUR AFORESAID EDUCATIONAL ACTIVITY IS CLASSIFIED AS CHARITABLE WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. 5. A CAREFUL PERUSAL OF SECTIONS 12A/12AA OF I.T . ACT SHOWS THAT THE RELEVANT FACTORS TO BE CONSIDERED AT THE T IME OF REGISTERING THE APPLICANT U/S 12AA/12A OF I.T. ACT ARE, OBJECTS OF THE APPLICANT, AND GENUINENESS OF ITS AC TIVITIES. ITA NO. 3748/DEL/2014 15 THE LD. DIT(E), IN HER IMPUGNED ORDER, HAS GIVEN HE R OPINION ON BOTH THESE FACTORS. AS FAR AS THE OBJECTS OF THE APPELLANT TRUST ARE CONCERNED THE LD. DIT(E) HAS HELD THAT IT CANNOT BE TERMED AS EDUCATION. AS FAR AS GENUINENESS OF THE ACTIVITIES OF THE APPELLANT TRUST IS CONCERNED THE LD. DIT(E) HAS HELD THAT THE ACTIVITIES ARE NOT GENUINE. WE TA KE UP BOTH THESE ASPECTS ONE BY ONE. 6. AS TO WHETHER THE OBJECTS OF THE APPELLANT T RUST CAN BE TERMED AS EDUCATION, WE FIND THAT THE EDUCATIONAL UNITS TAKEN OVER BY THE APPELLANT TRUST WERE EARLIER BEIN G RUN BY R K. CONVENT SCHOOL EDUCATION SOCIETY. THE LD. DIT(E) HAS OBSERVED IN PARA 3 OF HER ORDER THAT R.K. CONVENT S CHOOL EDUCATION SOCIETY WAS RUNNING ITS EDUCATIONAL ACTI VITIES (EMPHASIS ADDED) THROUGH COLLEGES / INSTITUTES WHIC H INCLUDED THE EDUCATIONAL UNITS TAKEN OVER BY THE AP PELLANT TRUST. SHE HAS ALSO NOTED IN PARA 5.1 OF HER ORDER THAT R.K. CONVENT SCHOOL EDUCATION SOCIETY WAS REGISTERED U/S 12AA OF I.T. ACT AND HAD BEEN CARRYING OUT ITS EDUCATIONAL ACTIVITIES SINCE MANY YEARS. IN THE ABSENCE OF ANY REASONING G IVEN BY THE LD. DIT(E) IN HER ORDER ; IT IS NOT CLEAR WHY, THE ACTIVITIES OF R.K. CONVENT SCHOOL EDUCATION SOCIETY HAVE BEEN TERMED ITA NO. 3748/DEL/2014 16 BY HER AS EDUCATIONAL ACTIVITY AND WHY, ON IDENTIC AL FACTS, THE ACTIVITIES OF APPELLANT TRUST HAVE NOT BEEN TER MED AS EDUCATION. ALSO, IT IS NOT CLEAR WHY R.K. CONVENT SCHOOL EDUCATION SOCIETY WAS GRANTED REGISTRATION U/S 12AA R.W.S. 12A ON THE BASIS OF ITS AFORESAID EDUCATIONAL ACTIV ITIES SINCE MANY YEARS, AND WHY ON IDENTICAL FACTS THE APPELLAN T TRUST WAS DENIED REGISTRATION BY LD. DIT(E). IT IS SEEN T HAT THE LD. DIT(E) HAS PLACED RELIANCE ON DECISION OF HONBLE S UPREME COURT IN THE CASE OF SOLE TRUSTEE, LOK SHIKSHANA TR UST VS. CIT (SUPRA). THOUGH THE LD. DIT(E) HAS IN PARAGRAPH 5.7 OF HER IMPUGNED ORDER REPRODUCED A PORTION OF THE RELEVANT PARA OF THE AFORESAID DECISION, IT WILL BE USEFUL TO PERUSE THE ENTIRE PARAGRAPH OF THE SUPREME COURT DECISION. WHEN THE E NTIRE PARAGRAPH IS REPRODUCED, WE FIND THAT IN THIS CASE THE HONBLE SUPREME COURT HAS OBSERVED AS UNDER :- THE SENSE IN WHICH THE WORD EDUCATION HAS BEEN USED IN SECTION 2 (15) IN THE SYSTEMATIC INSTRUCTIO N, SCHOOLING OR TRAINING GIVEN TO THE YOUNG IS 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 FURTHER KNOWLEDGE CONSTITUTES EDUCATION. ACCORDING TO THIS WIDE AND EXTENDED SENSE, TRAVELLING IS EDUCATION, BECAUSE AS A RESULT OF TRAVELLING YOU ACQUIRE FRESH ITA NO. 3748/DEL/2014 17 KNOWLEDGE. LIKEWISE, IF YOU READ NEWSPAPERS AND MAGAZINES, SEE PICTURES, VISIT ART GALLERIES, MUSEUMS AND ZOOS, YOU THEREBY ADD TO YOUR KNOWLEDGE. AGAIN, WHEN YOU GROW UP AND HAVE DEALINGS WITH THE PEOPLE, SOME OF WHOM ARE NOT STRAIGHT, YOU LEARN BY EXPERIENCE AND THUS ADD TO YOUR KNOWLEDGE OF THE WAYS OF THE WORLD. IF YOU ARE NOT CAREFUL, YOUR WALLET IS LIABLE TO BE STOLEN OR YOU ARE LIABLE TO BE CHEATED BY SOME UNSCRUPULOUS PERSON. THE THIEF WHO REMOVES YOUR WALLET AND THE SWINDLER WHO CHEATS YOU TEACH YOU A LESSON AND IN THE PROCESS MAKE YOU WISER THOUGH POORER. IF YOU VISIT A NIGHT CLUB, YOU GET ACQUAINTED WITH AND ADD TO YOUR KNOWLEDGE ABOUT SOME OF THE NOT MUCH REVEALED REALITIES AND MYSTERIES OF LIFE. ALL THIS IN A WAY IS EDUCATION I N THE GREAT SCHOOL OF LIFE. BUT THAT IS NOT THE SENSE S IN WHICH THE WORD EDUCATION IS USED IN CLAUSE (15) OF SECTION 2. WHAT EDUCATION CONNOTES IN THAT CLAUSE IS THE PROCESS OF TRAINING AND DEVELOPING TH E KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENT BY NORMAL SCHOOLING. 6.1. ON CAREFUL READING, IT IS OBVIOUS THAT WHAT THE HONBLE SUPREME COURT DISAPPROVED, WAS EXAGGERATED AND FARF ETCHED INTERPRETATION OF THE WORD EDUCATION. IF THE RATI O OF THE DECISION OF HONBLE SUPREME COURT IS CORRECTLY UNDE RSTOOD, HONBLE APEX COURT HAS ACTUALLY APPROVED THE INTERP RETATION OF THE WORD EDUCATION IN THE SENSE OF SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING AND IN THE SENSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. IN THE CASE OF THE APPELLANT TRUST, WE FIND THAT IT IS PRO VIDING ITA NO. 3748/DEL/2014 18 PROFESSIONAL EDUCATION AND TRAINING THROUGH COURSE S OF VARYING DURATION IN THE FIELDS OF MASS COMMUNICATIO N, JOURNALISM, ACTING, RADIO JOCKEY, NEWS READING AND ANCHORING, ADVERTISING AND PUBLIC RELATIONS ETC. TH ROUGH THEIR COURSES THE DURATION OF WHICH VARIES FROM TWO MONTH S TO ONE YEAR. FURTHER, THESE COURSES ARE IMPARTED BY THE AP PELLANT TRUST WITH THE ASSOCIATION OF UNIVERSITY OF DELHI A ND SHYAM LAL COLLEGE. THE OBJECTS FOR WHICH THE TRUST WAS FO UNDED ARE STATED IN CLAUSE 3 OF THE TRUST DEED (PAGES 4 & 5 O F PAPER BOOK FILED BY APPELLANT). BESIDES OTHER OBJECTS, TH E OBJECTS OF THE TRUST, INCLUDE TO ESTABLISH, MAINTAIN, SUPPO RT AND RUN SCHOOLS, COLLEGES, SOCIAL SERVICE CENTRES, INDUSTRI AL TRAINING CENTRES, SKILL DEVELOPMENT CENTRES, COACHING INSTIT UTES, BOARDING HOUSES, DAY SHELTERS, RESEARCH AND TRAININ G CENTRES AND OTHER INSTITUTIONS OF EDUCATION, HAVING OBJECTS SIMILAR TO THOSE OF THIS TRUST FOR IMPARTING ELEMENTARY AND HI GHER EDUCATION, TECHNICAL, INDUSTRIAL OR COMMERCIAL KNOW LEDGE OR TRAINING AMONGST PUBLIC. CONTRARY TO THE CONCLUSION ARRIVED AT BY THE LD. DIT(E), WHEN WE CORRECTLY APPLY THE R ATIO OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SO LE TRUSTEE V LOK SHIKSHANA TRUST VS. CIT (SUPRA) TO TH E FACTS OF ITA NO. 3748/DEL/2014 19 THE APPELLANT TRUST WE ARE OF THE VIEW THAT THE AC TIVITIES OF THE APPELLANT TRUST ARE TO BE REGARDED AS EDUCATI ON ; AND, DECISION OF HONBLE SUPREME COURT IN THE CASE OF SO LE TRUSTEE VS. LOK SHIKSHANA TRUST VS. CIT(SUPRA) TO NOT ACCEPT THE ACTIVITIES AS CHARITABLE WAS APPLICABLE TO THE FACTS OF THAT CASE ALONE. THE RATIO OF THAT CASE, WHEN APPLI ED TO THE FACTS OF THE CASE BEFORE US ADVANCES THE CASE OF TH E APPELLANT. LD. DIT(E), BY NOT REFERRING TO THE ENTI RE PARAGRAPH FROM THE ORDER OF HONBLE SUPREME COURT I N THE CASE OF SOLE TRUSTEE, LOK SHIKSHANA TRUST VS. CIT ( SUPRA) ; AND BY REFERRING TO ONLY PART OF THE PARAGRAPH, MAY HAVE RENDERED HERSELF PRONE TO MISINTERPRETING THE RATIO OF SUPREME COURT DECISION IN THE CASE OF SOLE TRUSTEE, LOK SHIKSHANA TRUST VS. CIT(SUPRA). WE FURTHER FIND THA T THE DELHI BENCH OF ITAT IN THE CASE OF DIVYA YOG MANDIR TRUST V. JT. CIT (2013) 37 TAXMANN.COM 227 / 60 SOT 154 (URO) DELHI HAS HELD THAT ANY FORM OF EDUCATIONAL ACTIVITY INVOLVIN G IMPARTING OF SYSTEMATIC TRAINING IN ORDER TO DEVELOP THE KNOW LEDGE, SKILL, MIND AND CHARACTER OF STUDENT IS TO BE REGAR DED AS EDUCATION AND CONCLUDED THAT IMPARTING OF YOGA YOG A TRAINING THROUGH WELL STRUCTURED YOGA SHIVIR/ CAMPS FELL UNDER ITA NO. 3748/DEL/2014 20 THE CATEGORY OF IMPARTING EDUCATION. IT MAY BE NOTE D THAT WHEN THIS DECISION WAS DELIVERED, THE WORD YOGA W AS NOT INCLUDED IN SECTION 2 (15) OF I.T. ACT UNDER WHICH CHARITABLE PURPOSE IS DEFINED. IN A CASE DECIDED BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DELHI MUSI C SOCIETY V. DIRECTOR GENERAL OF INCOME-TAX (2012) 17 TAXMANN. C OM 49/204 TAXMAN 231/(2013) 357 ITR 265 (DELHI) THE HO NBLE HIGH COURT HELD THAT WHERE ANY SCHOOL OR EDUCATIONA L INSTITUTION IS BEING RUN IN A SYSTEMATIC MANNER WI TH REGULAR CLASSES, VACATIONS, ATTENDANCE REQUIREMENTS, ENFORC EMENT OF DISCIPLINE AND SO ON; IT MEETS THE REQUIREMENT OF A N EDUCATIONAL INSTITUTION. THE APPELLANTS RELIANCE O N DELHI ITAT DECISION IN THE CASE OF SHIVANAND YOG VEDANT N ATRAJ SOCIETY V ITO (SUPRA), COPY WHEREOF HAS BEEN FILED BY THE APPELLANT TRUST, IN WHICH THE HONBLE ITAT CONSIDE RED THE DECISION OF DELHI ITAT IN THE CASE OF DIVYA YOG MAN DIR TRUST (SUPRA) IS ALSO RELEVANT, WHEREIN ALSO DELHI BENCH OF ITAT HAS HELD THAT IMPARTING OF YOGA TRAINING FELL UNDER THE CATEGORY OF IMPARTING EDUCATION WHICH IS ONE OF THE CHARITABLE OBJECTS DEFINED U/S 2 (15) OF I.T. ACT. ITA NO. 3748/DEL/2014 21 7. A COMBINED READING OF THE JUDICIAL PRECEDENT S IN SOLE TRUSTEE, LOK SHIKSHNA TRUST VS. CIT (SUPRA) ; DIVYA YOG MANDIR TRUST VS. JT. CIT (SUPRA), DELHI MUSIC SOCIETY VS. DIRECTOR GENERAL OF INCOME TAX (SUPRA) AND SHIVANAND YOG VED ANT NATRAJ SOCIETY VS. ITO (SUPRA) LEADS US TO PROPER UNDERSTANDING OF THE WORD EDUCATION. THE WORD EDUCATION IS TO BE INTERPRETED WIDELY AND LIBERAL LY. WHAT EDUCATION CONNOTES IS THE PROCESS OF TRAINING AND DEVELOPING THE KNOWLEDGE SKILL, MIND AND CHARACTER OF STUDENT OF NORMAL SCHOOLING AND INCLUDES SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO THE YOU NG IN PREPARATION FOR THE WORK OF LIFE. IT ALSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION GIVEN TO A PERSON. WHEN ACTIVITIES ARE CARRIED OUT LIKE ANY SCHOOL OR EDUCA TIONAL INSTITUTION IN A SYSTEMATIC MANNER WITH REGULAR CLA SSES, VACATIONS, ATTENDANCE REQUIREMENTS, ENFORCEMENT OF DISCIPLINE AND SO ON ; REQUIREMENTS FOR THE ACTIVIT IES TO BE REGARDED AS EDUCATION ARE MET. ANY FORM OF EDUCAT IONAL ACTIVITY INVOLVING IMPARTING OF SYSTEMATIC TRAINING IN ORDER TO DEVELOP THE KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENT IS ALSO TO BE REGARDED AS EDUCATION. ITA NO. 3748/DEL/2014 22 8. IT IS IRRELEVANT WHETHER OR NOT THE EDUCATIONA L COURSES OR PROGRAMMES ARE PART OF REGULAR CURRICULUM OF ANY UN IVERSITY / EDUCATION PROGRAMME. EVEN IF THESE ARE JUST SKILL DEVELOPMENT/ ENHANCEMENT COURSES / PROGRAMS, IT MEE TS THE REQUIREMENTS FOR BEING REGARDED AS EDUCATION. THE VIEW OF LD. DIT(E), EXPRESSED IN PARA 5.7 OF HER IMPUGNED O RDER, THAT COURSES / PROGRAMS RUN BY THE APPELLANT CANNOT BE T ERMED AS EDUCATION IS BASED ON ENTIRELY IRRELEVANT CONSIDE RATIONS. IN ANY CASE, AS PER PARA 4.3 OF IMPUGNED ORDER OF LD. DIT(E), THE COURSES RUN BY APPELLANT TRUST WERE IMPARTED IN ASSOCIATION WITH UNIVERSITY OF DELHI AND SHYAM LAL COLLEGE. THE LD. DIT(E) HAS NOT REFUTED THIS. SHE HAS NEITHE R HIGHLIGHTED ANY RELEVANT CONSIDERATION NOR BROUGHT OUT ANY ADVERSE MATERIAL ON THE BASIS OF WHICH IT CAN BE RE ASONABLY HELD THAT THE ACTIVITIES OF THE APPELLANT TRUST CAN NOT BE TERMED AS EDUCATION CONSIDERING THAT WE HAVE ALRE ADY HELD, AFTER CONSIDERING JUDICIAL PRECEDENTS THAT TH E WORD EDUCATION IS TO BE INTERPRETED WIDELY AND LIBERAL LY. IN THE CASE BEFORE US, WE HAVE ALREADY NOTED EARLIER IN PA RAGRAPHS 4 AND 6.1 OF THIS ORDER THAT THE APPELLANT TRUST IS P ROVIDING PROFESSIONAL EDUCATION AND TRAINING THROUGH COURSES IN THE ITA NO. 3748/DEL/2014 23 FIELDS OF MASS COMMUNICATION, JOURNALISM, ACTING, R ADIO JOCKEY , NEWS READING AND ANCHORING, ADVERTISING AN D PUBLIC RELATIONS. THOUGH LD. DIT(E) HAS STATED IN PARAGRAP H 5.5 OF HER IMPUGNED ORDER THAT IT (R.K. CONVENT SCHOOL EDU CATION SOCIETY) WAS NOT AUTHORISED TO RUN THE COURSES UNDE R ITS BANNER WITHOUT HAVING NECESSARY PERMISSION / AFFILI ATION IN THIS REGARD FROM THE COMPETENT AUTHORITY ; THIS IS QUITE CONTRARY TO HER OWN FINDING IN PARAGRAPH 5.2 OF HER IMPUGNED ORDER, WHERE SHE HERSELF HAS NOTED THAT THESE COUR SES WERE BEING SUCCESSFULLY RUN BY R.K. CONVENT SCHOOL EDUCA TIONAL SOCIETY BEFORE BEING TAKEN OVER BY THE APPELLANT TR UST. SHE HAS ALSO NOTED IN PARAGRAPH 4.3 OF HER IMPUGNED ORD ER THAT DETAILS REGARDING NATURE OF COURSES RUN BY APPELLAN T TRUST AND ABOUT ASSOCIATION WITH UNIVERSITY OF DELHI AND SHYA M LAL COLLEGE WERE FURNISHED. BE THAT AS IF MAY. THERE IS NO STATUTORY REQUIREMENT FOR THE PURPOSE OF GRANTING REGISTRATION U/S 12AA / 12A OF I.T. ACT, THAT EDUCA TIONAL COURSES OR PROGRAMMES MUST BE RUN IN AFFILIATION WI TH A COLLEGE OR A UNIVERSITY. WHETHER THE EDUCATIONAL CO URSES OR PROGRAMMES BEING RUN BY AN APPLICANT ARE RECOGNISED BY OR ARE IN AFFILIATION WITH A COLLEGE / A UNIVERSITY / A GOVERNMENT ITA NO. 3748/DEL/2014 24 AUTHORITY IS IRRELANT FOR THE PURPOSE OF SECTION 12 AA / 12A OF I.T. ACT. 9. IT IS SETTLED LAW THAT WHEN TWO REASONABLE VIEWS ARE POSSIBLE, THE VIEW FAVOURABLE TO THE ASSESSEE SHOUL D BE ADOPTED. IT IS ALSO SETTLED LAW THAT BENEFICIAL PRO VISIONS SHOULD BE INTERPRETED LIBERALLY. MANY TIMES, WHEN T HE COURTS ARE ADJUDICATING A TAX DISPUTE, THEY HAVE TO RECONC ILE CONFLICTS BETWEEN PUBLIC INTEREST AND PRIVATE INTER EST. REVENUE, REPRESENTING PUBLIC INTEREST AND ASSESSEE, REPRESENTING PRIVATE INTEREST DO MANY TIMES PRESENT SITUATIONS IN MATTERS RELATING TO TAX DISPUTES IN W HICH THE ADJUDICATION HAS TO FACTOR IN THE CONFLICTING REQUI REMENTS OF PUBLIC INTEREST AND PRIVATE INTEREST. HOWEVER IN A SITUATION LIKE THE ONE BEFORE US, IN WHICH AN ISSUE REGARDING REGISTRATION U/S 12AA / 12A OF I.T. ACT IS A SUBJEC T MATTER, THERE IS LITTLE CONFLICT, IF ANY, BETWEEN PUBLIC IN TEREST AND PRIVATE INTEREST. THE SOCIETY DOES NEED CHARITABLE ACTIVITIES AND IN THAT SENSE CHARITABLE ACTIVITIES ARE IN PUBL IC INTEREST. REGISTRATION U/S 12AA/12A OF I.T. ACT IS MEANT TO F ACILITATE CHARITABLE ACTIVITIES PROPOSED TO BE CARRIED OUT BY THE ENTITIES (PRIVATE PARTIES) APPLYING FOR REGISTRATIO N. WHEN ITA NO. 3748/DEL/2014 25 PRIVATE PARTIES (SUCH AS THOSE WHO APPLY FOR REGIST RATION U/S 12A / 12AA OF I.T. ACT) WISH TO CARRY OUT CHARITABL E ACTIVITIES FOR THE LARGER BENEFIT OF SOCIETY I.E. IN PUBLIC IN TEREST; THERE IS LITTLE CONFLICT BETWEEN PRIVATE INTEREST AND PUB LIC INTEREST. IN SITUATIONS WHEN THERE IS LITTLE CONFLICT BETWEE N PRIVATE INTEREST AND PUBLIC INTEREST, LAW SHOULD BE INTERP RETED LIBERALLY, SUBJECT TO REASONABLE LIMITS, IN A WAY W HICH ADVANCES PUBLIC INTEREST THROUGH CHARITABLE ACTIVIT IES OF PRIVATE PARTIES. THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF SOLE TRUSTEE, LOK SHIKSHANA TRUST VS. CIT ( SUPRA) PROVIDES US WITH A SENSE OF REASONABLE LIMITS OF LI BERAL INTERPRETATIONS IN SUCH SITUATIONS, THOUGH ; AND THE WORDS SHOULD NOT BE SO WIDELY AND LIBERALLY INTERPRETED A S TO RESULT IN FARFETCHED EXAGGERATION. 10. IN VIEW OF THE FOREGOING DISCUSSION AND IN T HE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE IT IS HELD TH AT THE ACTIVITIES OF THE APPELLANT TRUST ARE TO BE REGARDE D AS EDUCATION. 11. AS FAR AS GENUINENESS OF ACTIVITIES IS CONCE RNED LD. DIT(E) HAS ONCE AGAIN TAKEN AN ADVERSE VIEW AGAINST THE ITA NO. 3748/DEL/2014 26 APPELLANT TRUST ON THE BASIS OF INADEQUATE/IRRELEVA NT FACTS. FOR THE PURPOSES OF REGISTRATION U/S 12A / 12AA OF I.T. ACT , IT IS OF NO RELEVANCE THAT THE AFORESAID EDUCATIONA L UNITS TAKEN OVER BY THE APPELLANT TRUST WERE EARLIER RUN BY R.K. CONVENT SCHOOL EDUCATIONAL SOCIETY AND THAT ASSETS AND AFFAIRS OF THE AFORESAID TWO EDUCATIONAL UNITS WERE TRANSFERRED TO THE APPELLANT TRUST, ESPECIALLY AS T HERE IS NO FINDING BY LD. DIT(E) THAT THE TRANSFER OF ASSETS W AS NOT VOLUNTARY. ALSO IT IS OF NO RELEVANCE THAT AUTHOR O F THE APPELLANT TRUST, MR. DEEPAK BANSAL IS SON OF MR. M. C. BANSAL, PRESIDENT OF R.K. CONVENT SCHOOL EDUCATION SOCIETY AND WAS ENGAGED IN RUNNING OF THE AFORESAID EDUCATIONAL UNI TS UNDER R.K. CONVENT SCHOOL EDUCATIONAL SOCIETY. THE OBSERV ATION OF LD. DIT(E) THAT THE TRANSFER OF ASSETS OF R.K. CONV ENT SCHOOL EDUCATION SOCIETY TO THE APPELLANT TRUST WAS IN THE NATURE OF DIVISION OF ASSETS OF A FAMILY IS ILL FOUNDED IN TH E ABSENCE OF ANY COMPREHENSIVE DISCUSSION ON WHAT WERE THE TOTAL ASSETS OF THE FAMILY AND HOW THESE ASSETS WERE DISTRIBUTED AMONGST DIFFERENT MEMBERS OF THE FAMILY. MERELY BECAUSE SOM E ASSETS AND ACTIVITIES WERE TRANSFERRED FROM R.K. CONVENT S CHOOL EDUCATION SOCIETY TO APPELLANT TRUST, IT CANNOT BE SAID THAT ITA NO. 3748/DEL/2014 27 THE TRANSFER AMOUNTED TO TRANSFER OF FAMILY ASSETS EVEN IF PRESIDENT OF TRANSFEROR SOCIETY AND AUTHOR OF APPEL LANT TRUST ARE CLOSE RELATIVES. IT IS A SETTLED PRINCIPLE THAT IN CERTAIN SITUATIONS AUTHORITIES CAN LIFT THE CORPORATE VEIL. THE VEIL CAN BE LIFTED BY AUTHORITIES IN THE CASE OF OTHER NON-C ORPORATE LEGAL ENTITIES ALSO SUCH AS TRUSTS, SOCIETIES ETC. BUT VEIL CANNOT BE LIFTED UNLESS THERE ARE FACTS AND CIRCUMS TANCES TO JUSTIFY THIS EXTRAORDINARY STEP. THE UNVEILING OF L EGAL ENTITIES MUST ONLY FOLLOW AFTER THE CONCERNED AUTHORITY HAS ESTABLISHED THAT THERE ARE RELEVANT AND ADEQUATE FA CTS TO JUSTIFY IT. IN THE ABSENCE OF ADEQUATE FACTS RELEVA NT FOR THIS PURPOSE THE VIEW OF THE LD. DIT(E) THAT THE TRANSFE R OF ACTIVITIES AND ASSETS FROM R.K. CONVENT SCHOOL EDUC ATION SOCIETY TO THE APPELLANT TRUST WAS IN THE NATURE OF DIVISION OF FAMILY ASSETS HAS TO BE REJECTED AS BEING FANCIFUL, IMAGINARY AND UNCONCEIVABLE. EVEN IF, FOR THE SAKE OF ARGUMEN T, IT IS TREATED AS DIVISION OF ASSETS OF THE FAMILY, EVEN THEN THERE IS NOTHING IN SECTIONS 12AA / 12A OF I.T. ACT WHICH MAKES THE APPELLANT LIABLE TO DENIAL OF REGISTRATION BASED ON THE CONSIDERATION. THE LD. DIT(E) HAS NOT SPECIFIED WHA T SPECIFIC APPROVALS / SANCTIONS WERE REQUIRED TO BE TAKEN BY R.K. ITA NO. 3748/DEL/2014 28 CONVENT SCHOOL EDUCATION SOCIETY BEFORE TRANSFER OF ASSETS TO THE APPELLANT TRUST AND UNDER WHICH PROVISIONS OF S ECTION 12AA / 12A OF I.T. ACT REGISTRATION MUST BE DENIED TO THE APPELLANT TRUST BASED ON THE UNSUBSTANTIATED AND VA GUE CONSIDERATION THAT R.K. CONVENT SCHOOL EDUCATION SO CIETY HAD INDEED NOT TAKEN SUCH APPROVALS / SANCTIONS. LD. DI T(E) HAS ALSO NOT SPECIFIED IN HER IMPUGNED ORDER WHETHER AN Y ACTION HAS BEEN TAKEN AGAINST R.K. CONVENT SCHOOL EDUCATIO N SOCIETY FOR THE ALLEGED FAILURE OF THE SAID SOCIETY TO OBTA IN NECESSARY APPROVALS / SANCTIONS FROM THE COMPETENT AUTHORITY IN TERMS OF SOCIETIES REGISTRATION ACT AND FROM DIRECTORATE OF INCOME TAX (EXEMPTIONS). FURTHER EVEN IF R.K. CONVENT SCH OOL EDUCATION SOCIETY TRANSFERRED THE ASSETS WITHOUT NE CESSARY APPROVALS / SANCTIONS FROM COMPETENT AUTHORITY IN T ERMS OF SOCIETIES REGISTRATION ACT AND FROM DIRECTORATE OF INCOME TAX (EXEMPTIONS) AS ALLEGED, THERE IS NOTHING IN SECTIO N 12AA / 12A OF I.T. ACT THAT MAKES THE APPELLANT, THE TRANS FEREE, LIABLE TO REJECTION OF REGISTRATION. PERUSAL OF PAR AGRAPH 5.4 OF IMPUGNED ORDER OF LD. DIT(E) WHERE SHE OPINED TH AT IT WAS IN THE INTEREST OF REVENUE THAT SUCH TRANSACTIONS W ERE NOT ALLOWED TO BE PASSED OFF AS GENUINE CHARITABLE ACTI VITIES ; ITA NO. 3748/DEL/2014 29 SHOWS THAT SHE WAS GUIDED BY WHAT WAS IN THE INTERE ST OF REVENUE. THIS ONE SIDED APPROACH MUSTBE DISAPPROVED . THE PARTISAN APPROACH OF AUTHORITIES TO BE GUIDED MEREL Y BY WHAT IS IN THE INTEREST OF REVENUE MAY CAUSE UNNECESSARY HARDSHIPS TO PERSONS AND MUST BE AVOIDED. IN GENERA L, IN COMING TO CONCLUSIONS AND IN TAKING DECISIONS ; AUT HORITIES CONCERNED MUST ALSO BE GUIDED BY WHAT IS IN THE INT EREST OF JUSTICE AND NOT MERELY BY WHAT IS IN THE INTEREST OF REVENUE. IN THE FACTS AND CIRCUMSTANCES OF A CASE, QUESTIONS OF FACT AND QUESTIONS OF LAW AND MIXED QUESTIONS OF LAW AND FACT MUST BE DECIDED BY AUTHORITIES BASED ON WHAT, IN A CCORDANCE WITH LAW ; IS JUST, FAIR, REASONABLE , PROPER, ETC. IN THE FACTS OF THE CASE ; AND NOT MERELY BY WHAT IS IN THE INTE REST OF REVENUE. THUS NOT ONLY THE LD. DIT(E) HAS BASED HE R CONCLUSIONS ON INCOMPLETE FACTS, BUT ALSO HAS RELIE D ON PARTISAN / INADEQUATE / IRRELEVANT CONSIDERATIONS. WHAT WAS RELEVANT WAS TO SEE WHETHER THE OBJECTS OF THE APPE LLANT TRUST WERE IN THE NATURE OF CHARITABLE PURPOSES AND WHETHER THE ACTIVITIES OF THE APPELLANT TRUST WERE GENUINE. LD. DIT(E) HAS FAILED TO BRING OUT RELEVANT AND ADEQUATE MATER IALS ON ITA NO. 3748/DEL/2014 30 THE BASIS OF WHICH IT CAN BE REASONABLY HELD THAT T HE ACTIVITIES OF THE APPELLANT TRUST WERE NOT GENUINE. 12. WE HAVE ALREADY NOTICED THAT OBJECTS OF THE APPELLANT TRUST INCLUDED TO ESTABLISH, MAINTAIN, SU PPORT AND RUN SCHOOLS, COLLEGES, SOCIAL SERVICE CENTRES, INDU STRIAL TRAINING CENTRES, SKILL DEVELOPMENT CENTRES, COACHI NG INSTITUTES, BOARDING HOUSES, DAY SHELTERS, RESEARCH AND TRAINING CENTRES AND OTHER INSTITUTIONS OF EDUCATIO N, HAVING OBJECTS SIMILAR TO THOSE OF THIS TRUST FOR IMPARTIN G ELEMENTARY AND HIGHER EDUCATION, TECHNICAL, INDUSTR IAL OR COMMERCIAL KNOWLEDGE OR TRAINING AMONGST PUBLIC. TH ESE OBJECTS ARE CLEARLY IN THE NATURE OF CHARITABLE PUR POSES, AND MORE PARTICULARLY, ARE TO BE REGARDED AS EDUCATION . WE HAVE ALSO ALREADY HELD THAT THE COURSES AND PROGRAM S ACTUALLY RUN BY THE AFORESAID UNITS OF THE APPELLANT TRUST A RE TO BE REGARDED AS EDUCATION. THUS, THE ACTIVITIES OF TH E APPELLANT TRUST ARE GENUINE. WE HAVE ALSO FOUND THA T LD. DIT(E) HAS FAILED TO BRING OUT RELEVANT AND ADEQUAT E MATERIALS ON THE BASIS OF WHICH IT CAN BE REASONABL Y HELD THAT THE ACTIVITIES OF THE APPELLANT TRUST WERE NOT GENU INE. FURTHER, WE HAVE ALSO NOTICED THAT ON IDENTICAL FAC TS THE ITA NO. 3748/DEL/2014 31 ACTIVITIES OF THE AFORESAID EDUCATIONAL UNITS OF TH E APPELLANT TRUST WERE TREATED AS EDUCATION WHEN THESE U NITS WERE BEING RUN UNDER R.K. CONVENT SCHOOL EDUCATIONAL SOC IETY BEFORE TRANSFER TO THE APPELLANT TRUST. WE HAVE ALS O NOTICED THAT R.K. CONVENT SCHOOL EDUCATION SOCIETY WAS GRAN TED REGISTRATION U/S 12AA ON THE STRENGTH OF EDUCATIONA L ACTIVITIES SINCE MANY YEARS INCLUDING THE EDUCATION AL ACTIVITIES OF THE AFORESAID EDUCATIONAL UNITS TRANS FERRED SUBSEQUENTLY TO THE APPELLANT TRUST. IN THESE FACTS AND CIRCUMSTANCES, AND IN VIEW OF THE LEGAL POSITION DI SCUSSED EARLIER IN THIS ORDER IT IS HELD THAT THE LD. DIT(E ) FAILED TO MAKE OUT A CASE FOR REJECTION OF REGISTRATION U/S 12AA / 12A OF I.T. ACT. THEREFORE, WE DIRECT LD. DIT(E) TO GRA NT REGISTRATION U/S 12AA/12A OF I.T. ACT TO THE APPELL ANT. BY WAY OF ABUNDANT CAUTION, WE HEREBY CLARIFY THAT WE HAVE NOT EXPRESSED ANY OPINION ON WHETHER OR NOT ANY ACTION IS REQUIRED TO BE TAKEN AGAINST R.K. CONVENT SCHOOL ED UCATION SOCIETY. THE MATTER REGARDING R.K. CONVENT SCHOOL E DUCATION SOCIETY IS NOT BEFORE US. THE MATTER BEFORE US IS R EGARDING REGISTRATION TO THE APPELLANT TRUST U/S 12AA / 12A OF I.T. ACT ITA NO. 3748/DEL/2014 32 AND WE CONFINE OURSELVES TO GIVING THE DIRECTION TO THE LD. DIT(E) TO GRANT REGISTRATION TO THE APPELLANT TRUST . IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2016. SD/- SD/- (KULDIP SINGH) (ANADI N MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 TH AUGUST, 2016. * VEENA * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR