Vishwa Vikas Sankalp Sansthan, Meerut V. CIT, Meerut

ITA 5226/DEL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69179 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 06-08-2013
• Assessment Year: misc
• Appeal Filed On: 24-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S MEENA
• Assessee Lawyers: ANIL KUKRETI
• Keywords: Charitable institution
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H : NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.5226/DEL/2011 M/S. VISHWA VIKAS SANKALP SANSTHAN, VS. COMMISSION ER OF INCOME-TAX, 111, CHAUDHRY COLONY, MEERUT. NEAR MALIYANA POLICE CHOWKI, MEERUT. (PAN NO.AAATV7233J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL KUKRETI, ADVOCATE REVENUE BY : SHRI R.S. MEENA, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THE ASSESSEE IS A SOCIETY AND FILED APPLICATION FO R RENEWAL OF REGISTRATION U/S 80G(5)((VI) OF INCOME-TAX ACT, 1961 ON 28.03.2011. CIT, MEERUT REJECTED THIS RENEWAL APPLICATION BY HOLDING AS UNDER :- 4. IN RESPONSE TO THE ABOVE QUERIES THE SOCIETY FU RNISHED REPLY STATING THAT I. THE SOCIETY IS PROVIDING EDUCATION TO NEEDY STUD ENTS FREE OF COST; II. ALTHOUGH IT IS NOT PRIMARY EDUCATION, BUT IT IS EITHER WAY COVERED UNDER CHARITY AS THIS IS EDUCATION TO THE POOR OR/A ND THE ADVANCEMENT OF ANY OBJECT OF THE GENERAL PUBLIC UTI LITY & III ITS GROSS RECEIPTS ARE MUCH LOWER THE LIMITS OF RS.10 LACS EVIDENTLY SOCIETY CAN NOT AS AN EDUCATIONAL INSTITU TION OR PROVIDING REGULAR OR SYSTEMATIC EDUCATION AS DEFINED IN THE STATUTORY PROVISIONS TO CONSIDER TO THE GRANT OF REGISTRATION. THE SAME HAS ALSO BEEN HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF SOLO TRUSTEE LOKA SHIKSHAK TRUST V/S C. I.T. REPORTED IN 101 ITR 234 ITA NO.5226/DEL/2011 2 WHICH READS THE SENSE IN WHICH THE WORLD 'EDUCATION ' HAS BEEN USED IN SECTION 2(15) IN THE SYSTEMATIC INSTRUCTION, SCHOOLING OR T RAINING 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 WORLD '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 TRA VELLING YOU ACQUIRE FRESH KNOWLEDGE. BUT THAT IS NOT THE SENSE IN WHICH THE W ORD 'EDUCATION' IS USED IN CLAUSE (15) OF SECTION 2. WHAT EDUCATION CONNOTES IN THAT CLAUSE IS THE PROCE SS OF TRAINING AND DEVELOPING THE KNOWLEDGE, SKILL, MI ND AND CHARACTER OF STUDENTS BY NORMAL SCHOOLING. (HIGHLIGHTED TO PROVIDE EMPHASIS) THE SAME HAS FURTHER BEEN UPHELD BY THE HON'BLE GUJ ARAT HIGH COURT AND BY THE HON'BLE HIGH COURT OF PATNA IN THE CASES OF SAURASH TRA EDUCATION FOUNDATION V/S. CIT (GUJ) 273 ITR 139 AND BIHAR INS TITUTE OF MINING SURVEYING V/S CIT (PAT) 208 ITR 608 WHEREIN IT HAS BEEN HELD AS FOLLOWS:- 'CHARITABLE TRUST CARRYING ON EDUCATIONAL ACTIVITIE S-BUT NOT CONDUCTING ANY COURSES IN FORMAL EDUCATION-NOT AFFILIATED TO/ REGISTERED B Y ANY AUTHORITY- NO EXEMPTION.' IT HAS FURTHER BEEN HELD IN THE CASE OF SAFDARJUNG ENCLAVE EDUCATIONAL SOCIETY V/S MUNICIPAL CORPORATION OF DELHI (1990) 1 81 ITR 154 (DEL) THAT MERELY BECAUSE THE SOCIETY WAS NOT DISTRIBUTING PRO FITS OR WAS APPLYING THE PROFITS EARNED FROM THE RUNNING OF THE SCHOOL ON THE CONSTR UCTION OF THE SCHOOL BUILDING WAS NOT ENOUGH FOR THE SOCIETY TO CLAIM THE CHARITA BLE CHARACTER UNDER SECTION L15(4)(A) OF THE DELHI MUNICIPAL CORPORATION ACT, 1 957. ACCORDINGLY THE SOCIETY IS NOT ENGAGED IN THE BUSINESS OF PROVIDING 'EDUCATION ' AS DEFINED U/S 2(15) OF THE LT. ACT, 1961. THE SOCIETY HAS ALSO SUBMITTED THE COPIES OF AUDITE D ACCOUNTS UPTO 31/3/2010, WHICH ARE REPRODUCED BELOW:- INCOME & EXPENDITURE ACCOUNT AS ON 31/3/2010 EXPENDITURE AMOUNT INCOME AMOUNT (IN RS.) (IN RS.) TO, SALARY 82,500 BY DONATION 159,011 OFFICE RENT INCLUDING ELECTRICITY 61,800 (INCLUD ING MEMBERS) POSTAGE, COURIER & TELEPHONE 4,140 BANK INTER EST 77 STATIONARY, PRINTING & PHOTOCOPY 2,954 EXCESS OF EXPENDITURE TRAVELLING & CONVEYANCE EXP. 4,250 OVER INCOM E 231 SEMINAR EXPENSES 3,675 159,319 159,319 BALANCE SHEET AS ON 31/3/2010 LIABILITIES AMOUNT ASSETS AMOUNT (IN RS.) (IN RS.) CAPITAL ACCOUNT: FIXED ASSETS: GENERAL FUND 15,690 FURNITURE & FIXTURE 3 ,000 ITA NO.5226/DEL/2011 3 EXCESS OF EXPENDITURE OVER INCOME (231) CURRENT ASSETS : SECURITY WITH LAND LORD 10,000 BALANCE WITH BANK 2,417 - CASH IN HAND 42 15,459 15,459 5. FROM THE PERUSAL OF INCOME & EXPENDITURE ACCOUN T AS ON 31/3/2010 SOCIETY HAS DEBITED AMOUNTS OF RS.82,500/- ON SALARY, RS.61 ,800/- ON OFFICE RENT INCLUDING ELECTRICITY, RS.4,140/- TO POSTAGE, COURIER & TELEP HONE, RS.2,954/- STATIONARY, PRINTING & PHOTOCOPY AND RS.4,250 ON THE TRAVELLING & CONVEYANCE EXPENSES. THE SOCIETY WAS REQUIRED TO PRODUCE ITS BOOKS ALSO AND IN ITS REPLY SOCIETY FAILED TO PRODUCE BOOKS. 6. FROM THE SUBMISSIONS MADE BY THE SOCIETY AND FRO M THE EXPENSES DEBITED IN INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDING ON 31/3/2010 IT CAN BE NOTICED THAT AS FAR AS ACTIVITIES ARE CONCERNED, THE SOCIET Y HAS INCURRED ADMINISTRATIVE EXPENSES ONLY. SUCH ACTIVITIES DO NOT FALL UNDER TH E PARAMETERS OF CHARITABLE ACTIVITIES AS DEFINED IN SECTION 2(15) OF THE I.T. ACT, 1961. 7. THEREFORE, I AM UNABLE TO RENEW THE REGISTRATION U/S 80 G(5)(VI) OF THE I.T. ACT, 1961. A SEPARATE NOTICE OF WITHDRAWAL OF REGIS TRATION GRANTED EARLIER U/S 12AA OF THE I.T. ACT, 1961 IS ALSO BEING ISSUED TO THE S OCIETY AS IT IS NOT ENGAGED IN ACTIVITIES OF CHARITABLE PURPOSE AS ENVISAGED IN SE CTION 2(15), SPECIALLY IN VIEW OF AMENDMENTS MADE W. E. F. 01.04.2009. 2. NOW ASSESSEE IS IN APPEAL BY TAKING THE FOLLOWIN G GROUNDS OF APPEAL :- 1. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN HOLDING THAT THE OBJECTS OF THE TRUST ARE NOT CHARITABLE IN NATURE. 2. THE LD. COMMISSIONER OF INCOME TAX HAVE ERRED IN NOT GRANTING THE ASSESSEE REGISTRATION U/S 80G OF THE I NCOME-TAX ACT, 1961. 3. THE ORDER PASS BY THE LD. COMMISSIONER OF INCOM E TAX IS ILLEGAL ARBITRARY AND NOT BASED ON THE FACTS. 3. LD. AR SUBMITTED THAT THE CIT WAS NOT JUSTIFIED IN HOLDING THAT THE TRUST IS NOT OF CHARITABLE NATURE. THE CIT HAS NOT GRANTED R EGISTRATION U/S 80G OF THE INCOME-TAX ACT, 1961. LD. AR SUBMITTED THAT ASSESSE E WAS PROVIDING EDUCATION TO NEEDY STUDENTS FREE OF COST. ALTHOUGH IT WAS NOT PR OVIDING PRIMARY EDUCATION BUT IS EITHER WAY COVERED UNDER THE CHARITY AS THIS IS EDU CATION TO THE POOR OR/AND THE ITA NO.5226/DEL/2011 4 ADVANCEMENT OF ANY OBJECT OF THE GENERAL PUBLIC UTI LITY AS THE ASSESSEE IS PROVIDING COACHING FOR THE IAS/PCS/ COMPETITIVE EXAMS. THE GR OSS RECEIPTS OF THE ASSESSEE WERE ALSO LESS THAN RS.10 LACS. HE PLEADED TO SET A SIDE THE ORDER OF CIT. 4. ON THE OTHER HAND, LD. DR SUBMITTED THAT ASSESSE E IS PROVIDING COACHING TO IAS/PCS/COMPETITIVE EXAMS WHICH CANNOT FALL IN THE DOMAIN OF CHARITABLE WORK AS PROVIDED IN SECTION 2(15) OF THE INCOME-TAX ACT, 19 61. THE SOCIETY CANNOT BE SAID TO BE EDUCATIONAL INSTITUTION PROVIDING REGULAR OR SYS TEMATIC EDUCATION TO BE COVERED BY WORD EDUCATION AS PROVIDED IN THE STATUTORY PR OVISIONS TO GRANT OF REGISTRATION. THE HON'BLE SUPREME COURT IN THE CASE OF SOLO TRUST EE LOKA SHIKSHAK TRUST VS. CIT REPORTED IN 101 ITR 234 HAS HELD THAT THE WORD EDUCATION HAS BEEN USED IN SECTION 2(15) OF THE ACT IN THE SENSE WHERE A SYSTE MATIC INSTRUCTION, SCHOOLING OR TRAINING IS GIVEN TO THE YOUNG FOR PREPARATION FOR THE WORK OF LIFE. IT ALSO CONNOTES THE WHOLE COURSE OF SCHOLASTIC INSTRUCTION WHICH A PERSON HAS RECEIVED. THEREFORE, THE ASSESSEES ACTIVITIES ARE NOT COVERED UNDER THE SENSE IN WHICH THE WORD EDUCATION HAS BEEN USED IN SECTION 2(15) OF THE I NCOME-TAX ACT, 1961. HE ALSO RELIED ON THE DECISION OF HON'BLE GUJARAT HIGH COUR T IN THE CASE OF SAURASHTRA EDUCATION FOUNDATION VS. CIT REPORTED IN 273 ITR 13 9 AND HON'BLE PATNA HIGH COURT IN THE CASE OF BIHAR INSTITUTE OF MINING SURV EYING VS. CIT REPORTED IN 208 ITR 608 WHEREIN THE HON'BLE COURT HAS HELD THAT CHA RITABLE TRUST CARRYING ON EDUCATIONAL ACTIVITIES BUT NOT CONDUCTING ANY COURS ES IN FORMAL EDUCATION AND NOT AFFILIATED TO OR REGISTERED BY ANY AUTHORITY, NO EX EMPTION CAN BE GRANTED. LD. DR ALSO RELIED ON THE DECISION OF HON'BLE DELHI HIGH C OURT IN THE CASE OF SAFDARJUNG ENCLAVE EDUCATIONAL SOCIETY VS. MCD REPORTED IN 181 ITR 154 (DEL.) FOR THE ITA NO.5226/DEL/2011 5 PROPOSITION THAT MERELY BECAUSE THE SOCIETY WAS NOT DISTRIBUTING PROFITS OR WAS APPLYING THE PROFITS EARNED FROM THE RUNNING OF THE SCHOOL ON THE CONSTRUCTION OF THE SCHOOL BUILDING WAS NOT ENOUGH FOR THE SOCIETY TO C LAIM THE CHARITABLE CHARACTER U/S 115(4)(A) OF THE DELHI MUNICIPAL CORPORATION ACT, 1 957. IN VIEW OF THESE FACTS AND LEGAL POSITION, THE SOCIETY IS NOT ENGAGED IN THE B USINESS OF EDUCATION AS DEFINED U/S 2(15) OF THE INCOME-TAX ACT, 1961. LD. DR ALSO SUBM ITTED THAT INCOME AND EXPENDITURE ACCOUNT OF THE ASSESSEE ALSO SHOWS THAT NO EXPENSES CAN BE TERMED AS INCURRED FOR CHARITABLE PURPOSES. THE CIT, MEERUT H AS ALSO NOTED THAT THE NOTICE FOR WITHDRAWAL OF REGISTRATION U/S 12AA HAS BEEN ISSUED TO THE ASSESSEE AS ASSESSEE WAS NOT ENGAGED IN THE ACTIVITIES OF CHARITABLE PURPOSE AS ENVISAGED IN SECTION 2(15) OF THE INCOME-TAX ACT, 1961, SPECIALLY AFTER THE AMEND MENT IN THE PROVISIONS OF THE ACT W.E.F. 01.04.2009 AND PLEADED TO SUSTAIN THE OR DER OF THE CIT. 5. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. ADMIT TEDLY, THE ASSESSEE WAS PROVIDING COACHING FOR IAS/PCS/COMPETITIVE EXAMS. T HE ASSESSEE CLAIMS THAT ITS ACTIVITIES ARE CHARITABLE IN NATURE. THE WORD EDUC ATION IN SECTION 2(15) OF THE ACT CONNOTES THE PROCESS OF TRAINING AND DEVELOPING THE KNOWLEDGE, SKILL, MIND AND CHARACTER OF STUDENTS BY NORMAL SCHOOLING. IT HAS N OT BEEN USED IN THE WIDE AND EXTENSIVE SENSE ACCORDING TO WHICH EVERY ACQUISITIO N OF FURTHER KNOWLEDGE CONSTITUTE EDUCATION. THE FACTS OF THIS CASE SHOW T HAT ASSESSEE WAS NOT PROVIDING EDUCATION AS MENTIONED IN THE SENSE IN WHICH THE WO RD EDUCATION HAS BEEN USED IN SECTION 2(15) OF THE INCOME-TAX ACT, 1961. THE ASSE SSEE IS NOT PROVIDING REGULAR OR SYSTEMATIC EDUCATION IN THE SENSE AS DEFINED IN THE STATUTORY PROVISIONS U/S 2(15) OF THE ACT. THE SCOPE OF SECTION COVERS ONLY INSTITUTI ONS WHERE SYSTEMATIC INSTRUCTION, ITA NO.5226/DEL/2011 6 SCHOOLING OR TRAINING GIVEN TO THE YOUNG IS PREPARA TION FOR THE WORK OF LIFE. EVERY TYPE OF ACQUISITION OF KNOWLEDGE CANNOT BE SAID TO BE COVERED BY THE WORD EDUCATION AS PROVIDED IN SECTION 2(15) OF THE INC OME-TAX ACT, 1961. FURTHER, THE INCOME AND EXPENDITURE ACCOUNT DETAILS AS ON 31.03. 2010 SHOWS THAT ASSESSEE HAS RECEIVED DONATION OF RS.1,59,011/- AND THE DETAILS OF EXPENDITURE SHOW THAT ASSESSEE HAD SPENT RS.82,500/- ON SALARY, RS.61,800/- ON OFF ICE RENT INCLUDING ELECTRICITY, RS.4,140/- ON POSTAGE, COURIER & TELEPHONE, RS.2,95 4/- ON STATIONARY, PRINTING & PHOTOCOPY, RS.4,250/- ON TRAVELING & CONVEYANCE EXP ENDITURE AND RS.3,675/- ON SEMINAR EXPENSES. THUS, THE PATTERN OF EXPENDITURE SHOWS THAT NO AMOUNT HAD BEEN SPENT ON THE CHARITABLE ACTIVITIES. ASSESSEE IS ALS O NOT PURSUING ANY ACTIVITY WHICH COULD BE SAID TO BE OF THE GENERAL PUBLIC UTILITY. CONSIDERING ALL THESE FACTS, WE FIND NO FAULT IN THE ORDER OF CIT FOR NOT GRANTING THE E XEMPTION U/S 80G OF THE INCOME- TAX ACT, 1961 AND THE APPEAL OF THE ASSESSEE IS DIS MISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 22 ND DAY OF AUGUST, 2013. SD/- SD/- (R.P. TOLANI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 22 ND DAY OF AUGUST, 2013 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT, MEERUT 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.