ST. JOSEPH'S TECHNICAL SCHOOL, MUMBAI V. ASST DIT (E) II (1), MUMBAI

ITA 5973/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92914 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 08-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA P YADAV
• Keywords: Business income; Charitable institution; Competent authority; Benefit of exemption
• Section: 80G; 12A; 10B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' J ' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI SANJAY ARORA , ACCOUNTANT MEMBER ITA NO. 5973/MUM/2013 (ASSESSMENT YEAR: 2009 - 10 ) ST. JOSEPH'S TECHNICAL SCHOOL VS. ASST. DIT (E) - II(1) PREMIER AUTOMOBILES ROAD KURLA (W), MUMBAI 400070 PIRAMAL CHAMBERS PAREL, MUMBAI 400012 PAN - AACTS0971N APPELLANT RESPONDENT APPELLANT BY: SHRI ANIL THAKRAR RESPONDENT BY: SHRI AKHILENDRA P. YADAV DATE OF HEARING: 09.06. 2015 DATE OF PRONOUNCEMENT: 17 .06.2015 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE TRUST IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A) - 1, MUMBAI AND IT PERTAINS TO A.Y. 2009 - 10. 2. ASSESSEE IS A SOCIETY REGISTERED WITH THE CHARITY COMMISSIONER AS WELL AS UNDER SECTION 12A OF THE INC OME TAX ACT. THE MAIN OBJECTS OF THE SOCIETY ARE PROMOTION OF EDUCATION IN INDIA AND RUNNING EDUCATIONAL COURSES IN MUMBAI. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ASSESSEE FILED ITS RETURN ON INCOME ON 16.09.2009 ALONG WITH INCOME AND EXPENDITURE ACCOUNT, BALANCE SHEET AND AUDIT REPORT IN FORM NO. 10B DECLARING NIL INCOME. THE INCOME EARNED BY THE ASSESSEE WAS CLAIMED AS EXEMPT UNDER SECTION 11 OF THE INCOME TAX ACT. 3. THE CASE HAVING BEEN SELECTED F OR SCRUTINY, THE AO CALLED FOR THE DETAILS WITH REGARD TO THE ACTIVITIES CARRIED ON BY THE ASSESSEE AND NOTICED THAT THE FOLLOWING ACTIVITIES CANNOT BE CONSIDERED AS CHARITABLE ACTIVITIES: - (A) P ROVIDING TECHNICAL TRAINING TO JET AIRWAYS INDIA LTD. AND OTHER PRIVATE COMPANIES EMPLOYEES; ASSESSEE RECEIVED COMPENSATION OF ITA NO. 5973/MUM/2013 ST. JOSEPH'S TECHNICAL SCHOOL 2 ` 87,84,000/ - FOR TRAINING AND ALSO FOR PROVIDING SPACE ON RENTAL BASIS. (B) ASSESSEE TRUST GAVE ADVANCE OF ` 97,60,000/ - TO VARIOUS FIRMS; FOR EXAMPLE AMOUNT WAS ADVANCED TO DON BOSCO INSTITUTE, WH ICH IS RUN BY THE BOMBAY SALESIAN SOCIETY AND IS RUNNING AN ENGINEERING COLLEGE IN THE SAME CAMPUS OF ST. JOSEPHSS TECHNICAL SCHOOL, KURLA. 4. WHEN CALLED UPON TO EXPLAIN AS TO WHY THE ABOVE ACTIVITIES SHOULD NOT BE TREATED AS COMMERCIAL ACTIVITIES, ASSESSEE TRUST, VIDE ITS REPLY DATED 19.11.2011, SUBMITTED THAT DON BOSCO INSTITUTE WAS RUNNING AN ENGINEERING COLLEGE IN THE CAMPUS OF THE SOCIETY. DUE TO INSUFFICIENCY OF FUNDS THEY TEMPORARILY BORROWED FUNDS FROM ST. JOSEPHS TECHNICAL SCHOOL. SINCE THAT SOCIET Y IS ALSO RUNNING AN EDUCATIONAL INSTITUTION, THE AMOUNT ADVANCED CANNOT BE TREATED AS AN ACTIVITY FALLING OUTSIDE THE AMBIT OF PROVISIONS OF SECTION 11/13 OF THE ACT. SIMILARLY, ASSESSEE RECEIVED SOME AMOUNT FROM TATA SKY ; THE TRAINEES FROM TATA SKY WERE TRAINED IN SHORT TERM TECHNICAL COURSES, WHO HAD TO RESIDE IN THE PREMISES OF THE SOCIETY FOR WHICH STAY CHARGES ARE REIMBURSED BY TATA SKY. SIMILAR IS THE SITUATION WITH THE AMOUNT RECEIVED FROM GODREJ AND EKBOTE AUTO CONSULTANT AS WELL AS JET AIRWAYS. IN THE CASE OF JET AIRWAYS THE MANAGEMENT APPROACHED THE SOCIETY TO MAKE AVAILABLE VACANT CLASSROOMS ON LEASE BASIS FOR THEIR EDUCATIONAL ACTIVITIES , IN THE FORM OF TRAINING CENTRES , FOR WHICH THE BOMBAY SALESIAN SOCIETY, WHO IS THE OWNER OF THE PLACE , GAVE THEM NECESSARY PERMISSION. 5. DURING THE COURSE OF HEARING ASSESSEE TRUST FILED ANOTHER LETTER DATED 05.12.2011 WHEREIN IT WAS SUBMITTED THAT THE ASSESSEE HAS PROVIDED FUNDS TO DON BOSCO INSTITUTE FOR A SHORT PERIOD WHICH WAS IMMEDIATELY RETURNED IN THE NEXT ASSESSMENT YEAR. PLACING RELIANCE UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIT VS. A LARIPPU 244 ITR 358 IT WAS SUBMITTED THAT THE LOAN GIVEN BY THE ASSESSEE WOULD NOT CONSTITUTE EITHER INVESTMENT OR DEPOSIT AND HENCE THE ASSESSEE CO ULD NOT HAVE CHARGED INTEREST SO AS TO INVOKE PROVISIONS OF SECTION OF 13(1)(D) OF THE ACT. REGARDING THE FACILITIES GIVEN TO THE TRAINEES OF TATA SKY IT WAS SUBMITTED THAT THE ITA NO. 5973/MUM/2013 ST. JOSEPH'S TECHNICAL SCHOOL 3 AMOUNT RECEIVED FROM THEM WAS FOR PROVIDING ACCOMMODATION TO THE STUDEN T S WHO H AD COME FOR GAINING TECHNICAL KNOWLEDGE, WHICH IS THE MAIN ACTIVITY OF THE ASSESSEE TRUST. HE RELIED UPON THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF DIT VS. SAHU JAIN TRUST (ITA NO. 38 OF 2001 DATED 31 ST MARCH, 2011) TO SUBMIT THAT MERE LY BECAUSE RENTAL INCOME WAS RECEIVED, EXEMPTION SHOULD NOT BE DENIED SO LONG AS THE OBJECT OF LEASING OUT THE PROPERTY WAS TO ENABLE THE TRUST TO CARRY OUT ITS OBJECT OF EDUCATION. IN OTHER WORDS, IT CANNOT BE TREATED AS BUSINESS INCOME SINCE IT WAS LET O UT TO TATA SKY FOR THE PURPOSE OF IMPARTING TECHNICAL EDUCATION. 6. THE AO WAS, HOWEVER, OF THE VIEW THAT THE ASSESSEE PROVIDED TECHNICAL SERVICES TO VARIOUS COMPANI ES AND FEE WAS RECEIVED FOR PROF ESSIONAL/ TECHNICAL SERVICES. THE TERM EDUCATION MEANS TO BR ING UP CHILDREN BY TRAINING THEM PROPERLY WHEREAS , IN THE INSTANT CASE , THE COURSES OFFERED BY THE ASSESSEE ARE NOT RECOGNISED AS SUCH BY ANY COMPETENT AUTHORITY. THE ASSESSEE INSTITUTE HAS NOT GOT ANY RECOGNITION EITHER FROM THE STATE OR CENTRAL GOVERNMENT. IN THIS REGARD HE RELIED UPON THE DECISION IN THE CASE OF BIHAR INSTITUTE OF MINING & MINE SURVEYING 208 ITR 608 (PATNA) WHEREI N IT WAS HELD THAT THE INSTITUTION WHICH WAS NOT AUTHORISED, CANNOT BE SAID TO HAVE ANY ELEMENT OF NORMAL SCHOOLING. HE THUS CONCLUDED THAT THE ACT IVITIES OF CONSULTANCY AND TECH NICAL & PROFESSIONAL SERVICES FOR WHICH THE INSTITUTE RECEIVES PAYMENT ARE NOT CERTAINLY AN EDUCATIONAL ACTIVITY BUT THEY AR E THE JOBS DONE FOR THIRD PARTIES AGAINST CONSIDERATION. THE AO DISTINGUISHED THE DECISIONS OF THE APEX COURT IN THE CASE OF SOLE TRUSTEE, LOK SIKSHANA TRUST VS. CIT 101 ITR 234 AS WELL AS THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE COOPERATIVE UNION VS. CIT 195 ITR 279. ON THE FACTS OF THE AFORESAID CASES THE ACTIVITIES OF DEVELOPING BANKERS AND FINANCE PROFESSIONALS ARE DIFFERENT FROM FEES COLLECTED BY THE ASSESSEE FROM DIFFERE NT PARTIES. IN HIS OPINION THERE SHOULD BE FORMAL EDUCATION WHO, IN TURN , SHOULD APPEAR FOR A PARTICULAR EXAMINATION SUCH AS DIPLOMA/ENGINEERING COURSE. HE THUS CONCLUDED THAT THE I NCOME EARNED BY THE ASSESSEE - TRUST CANNOT BE TREATED AS INCOME FROM EDUCATI ONAL ACTIVITY AND HENCE IT HAS TO BE TREATED AS BUSINESS INCOME. ITA NO. 5973/MUM/2013 ST. JOSEPH'S TECHNICAL SCHOOL 4 7. WITH REGARD TO THE INTEREST FREE LOAN GIVEN TO DON BOSCO INSTITUTE OF TECHNOLOGY, THE COLLEGE RUN BY THE BOMBAY SALESIAN SOCIETY, THE AO WAS OF THE OPINION THAT THE TRANSACTION BETWEEN THE T WO TRUSTS CAN BE HIT BY THE PROVISIONS OF SECTION 13(2)(A) OF THE ACT SINCE THE ASSESSEE HAS GIVEN MONEY TO ANOTHER TRUST WITHOUT ADEQUATE INTEREST/SECURITY AND HENCE EVEN PROVISIONS OF SECTION 11(5) ARE ATTRACTED IN WHICH EVEN T ASSESSEE WOULD LOSE THE RIG HT TO EXEMPTION IN THE LIGHT OF THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ALARIPPU (SUPRA). 8. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE ADIT ERRED IN NOT GRANTING SUFFICIENT OPPORTUNITY WHILE FRAMING THE ASSESSMENT AND ALSO E RRED IN DENYING THE CLAIM OF EXEMPTION UNDER SECTION 11 OF THE ACT. IT WAS ALSO CONTENDED THAT HE OVERLOOKED THE CONTENTION OF THE ASSESSEE THAT EVEN RENTING OF SPACE WAS EXTENSION OF THE OBJECT OF EDUCATION SINCE THE PREMISES WAS USED FOR THE PURPOSE OF I MPARTING VOCATIONAL TRAINING. BY GRANTING LOAN TO DON BOSCO INSTITUTE , ASSESSEE HAS NOT VIOLATED PROVISIONS OF SECTION 13(2)(A) R.W.S. 11(5) OF THE ACT. ASSESSEE ALSO RELIED UPON SEVERAL CASE LAW IN SUPPORT ITS CONTENTION THAT IT WAS AN APPROVED PROFESSION AL TRAINING INSTITUTE AFFILIATED TO THE NATIONAL COUNCIL FOR VOCATIONAL TRAINING, DGET, MINISTRY OF LABOUR & EMPLOYMENT, GOVERNMENT OF INDIA. IT WAS ALSO SUBMITTED THAT THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ALARIPPU (SUPRA) WAS WRONGL Y APPLIED BY THE AO TO THE FACTS OF THE CASE. 9. THE LEARNED CIT(A) WAS, HOWEVER, OF THE OPINION THAT THE ASSESSEE ADVANCED SOME AMOUNT TO DON BOSCO INSTITUTE OF TECHNOLOGY WHICH RESULTED IN PARKING OF AMOUNT OTHER THAN IN THE MANNER REQUIRED UNDER SECTION 11 (5) OF THE ACT. HE ALSO OBSERVED THAT ANY MONEY SET APART , INVESTED/DEPOSITED IN THE FO RMS OR MODES OTHER THAN THAT SPECIFIED IN SECTION 11(5) WOULD BE SUFFICIENT TO DENY THE CLAIM OF EXEMPTION. HE ALSO OBSERVED THAT THE ASSESSEE EARNED RENTAL INCOME, WHIC H IS LIABLE TO BE TAXED AS BUSINESS INCOME. THOUGH THE CASE OF THE ASSESSEE IS THAT THE ACTIVITY OF CONSULTANCY, TECHNICAL AND PROFESSIONAL SERVICES ARE JOB DONE FOR THIRD PARTIES AGAINST CONSIDERATION, THE CIT(A) APPLIED THE DECISION OF THE HON'BLE PATNA HIGH COURT IN THE CASE OF BIHAR INSTITUTE OF MINING & MINE SURVEYING 208 ITR 608 ITA NO. 5973/MUM/2013 ST. JOSEPH'S TECHNICAL SCHOOL 5 AS WELL AS THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SOLE TRUSTEE, LOK SIKSHANA TRUST VS. CIT 101 ITR 234 TO CONCLUDE THAT PROVIDING ACCOMMODATION AND GRANTING COMPUTER LABS TO PUBLIC IN GENERAL WOULD AMOUNT TO CARRYING ON AN ADVENTURE IN THE NATURE OF TRADE AND IT CANNOT BE TREATED AS AN ACTIVITY IN THE NATURAL COURSE OF FURTHERANCE OF THE OBJECTS OF THE TRUST. HE ALSO RELIED UPON THE DECISION OF THE UTTARAKHAN D HIGH COURT IN THE CASE OF CIT VS. NATIONAL INSTITUTE OF AERONAUTICAL ENGINEERING AND EDUCATIONAL SOCIETY 315 ITR 428 WHEREIN THE COURT OBSERVED THAT MERE IMPARTING OF EDUCATION WITH THE PRIMARY PURPOSE OF EARNING PROFIT CANNOT BE SAID TO BE A CHARITABLE ACTIVITY. HE THUS CONFIRMED THE ORDER OF THE AO. 10. FURTHER AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED BEFORE US A CHART CHRONOLOGING THE REASONS GIVEN BY THE AO AS WELL AS THE CIT(A) AND THE REMARKS AGAINST THE RE ASONS GIVEN BY THE TAX AUTHORITIES TO SUBMIT THAT THE TRUST HAD ALREADY BEEN GRANTED REGISTRATION UNDER SECTION 12A AND SECTION 80G OF THE INCOME TAX ACT AND IT HAS BEEN GRANTED EXEMPTION FROM YEAR TO YEAR. EVEN IN THE SUBSEQUENT YEAR, I.E. A.Y. 2010 - 11 THE LEARNED CIT(A) HAS ALLOWED THE PLEA OF THE ASSESSEE THAT IT IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT AGAINST WHICH THE REVENUE HAS NOT PREFERRED ANY APPEAL. THEREFORE THE L IMITED ISSUE THAT NEEDS TO BE ADDRESSED IS WHETHER LETTING OUT OF PROPERTIES TO ENABLE OTHER PARTIES TO IMPART EDUCATION, WHEREIN THE ASSESSEE IS ALSO GIVING TRAINING, THE INCOME EARNED THEREON CAN BE CONSIDERED AS FURTHERANCE OF THE OBJECT OF EDUCATION AS PER THE MAIN CLAUSE OF THE TRUST. IT IS NOT IN DISPUTE THAT ASSESSEES MAIN OBJECT IS IMPARTING VOCATIONAL TRAINING AND IT IS A RECOGNISED INSTITUTION. THE CHARGES COLLECTED BY THE ASSESSEE FOR IMPARTING EDUCATION ARE MUCH LESS THAN WHAT THE PRIVATE/UNAID ED INSTITUTIONS, WHICH ARE NOT RECOGNISED, ARE CHARGING. IT IS ALSO NOT IN DISPUTE THAT ASSESSEE HAS BEEN RUNNING CERTIFIED COURSES. THE NET INCOME OF THE ASSESSEE IS, UNDOUBTEDLY, UTILISED/APPLIED FOR THE PURPOSE OF CHARITY. WHEN ADDITIONAL SPACE WAS AVAI LABLE IT WAS LET OUT TO TATA SKY, JET AIRWAYS, ETC. WHEREFROM ASSESSEE NOT ONLY RECEIVED RENTAL INCOME BUT ALSO RECEIVED FEES FOR PROVIDING TECHNICAL TRAINING TO THOSE TRAINEES AND HENCE IT HAS TO BE TREATED AS AMOUNT RECEIVED IN THE NATURAL COURSE OF ADVA NCEMENT OF ITS MAIN OBJECT, I.E. ITA NO. 5973/MUM/2013 ST. JOSEPH'S TECHNICAL SCHOOL 6 EDUCATION. HE ALSO REFERRED TO THE DECISION OF THE LEARNED CIT(A) IN ASSESSEES OWN CASE FOR A.Y. 2010 - 11 TO SUBMIT THAT THE ASSESSEE HAS BEEN CONDUCTING EXAMINATIONS FOR ITI STUDENTS AS PER THE PROCEDURE PRESCRIBED BY THE NCVT AND EVEN ON THE RENTED PREMISES CERTAIN CLASS TIMINGS ARE MAINTAINED AND ASSESSEE ALSO HAS BEEN TRAINING STUDENTS IN WH ICH EVENT IT WOULD AMOUNT TO AN EDUCATIONAL ACTIVITY FALLING WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. THE ORDER OF THE LEARNE D CIT(A) FOR A.Y. 2010 - 11 WAS ACCEPTED BY THE REVENUE. IN FACT IN THE AFORESITED DECISION THE LEARNED CIT(A) HAS ALSO TAKEN INTO CONSIDERATION THAT THE AMOUNT GIVEN AS LOAN TO DON BOSCO INSTITUTE CANNOT BE TREATED AS DEPOSIT OR INVESTMENT WITHIN THE MEANIN G OF SECTION 13(2) R.W.S. 11(5) OF THE ACT. IN THIS REGARD THE LEARNED CIT(A) RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF ACME EDUCATIONAL SOCIETY 326 ITR 146. 11. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO PLACED BEFORE US THE DECISION OF THE ITAT, MUMBAI IN THE CASE OF SAMUDRA INSTITUTE OF MARITIME VS . DDIT (ITA NO. 5760/MUM/2010 DATED 30.11.2011) WHEREIN THE BENCH OBSERVED THAT EVEN THOUGH THE ASSESSEE HAS BEEN CONDUCTING TWO CATEGORIES OF COURSES, I.E. ONE WHICH WAS APPROVED BY THE DG SHIPPING AND ANOTHER WHICH WAS NOT RECOGNISED, GOING BY THE BROADER DEFINITION OF EDUCATION AND THE PRINCIPLE LAID DOWN BY THE APEX COURT IN THE CASE OF SOLE TRUSTEE, LOK SIKSHANA TRUST VS. CIT 101 ITR 234 IT IS NOT NECESSARY THAT , IN ORDER TO CLAIM E XEMPTION , THE INSTITUTION SHOULD BE AFFILIATED WITH A UNIVERSITY OR BOARD. IN THIS REGARD HE REFERRED TO THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF DIT VS. NATIONAL SAFETY COUNCIL 305 ITR 257 AND CONTENDED THAT MERELY BECAUSE SOME COURSES ARE NOT RECOGNISED BY DG SHIPPING IT CANNOT BE A GROUND FOR DENIAL OF EXEMPTION UNDER SECTION 11 OF THE ACT. THE LEARNED COUNSEL ALSO REFERRED TO CIRCULAR NO. 11 OF 2008 DATED 19 TH DECEMBER, 2008 ISSUED BY CBDT WHEREIN THE BOARD OBSERVED THAT HAVING REGAR D TO THE NUMBER OF ENTITIES ENGAGED IN COMMERCIAL ACTIVITIES THE EXPRESSION ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY WAS AMENDED BY FINANCE ACT, 2008 BUT THE NEWLY INSERTED FIRST PROVISO TO SECTION 2(15) WILL NOT APPLY WHERE THE PURPOSE OF THE TRUST OR INSTITUTION IS EDUCATION EVEN IF IT INCIDENTALLY INVOLVES ITA NO. 5973/MUM/2013 ST. JOSEPH'S TECHNICAL SCHOOL 7 COMMERCIAL ACTIVITY. IN OTHER WORDS, THE VIEW OF THE CBDT WAS THAT SO LONG AS THE CASE OF THE ASSESSEE FALLS WITHIN THE BROADER SPECTRUM OF ADVANCEMENT OF GENERAL PUBLIC UTILITY IT MAY AMOUNT TO CHAR I TABLE PURPOSE. I N THE INSTANT CASE THE ASSESSEE WAS MAINLY ENGAGED IN IMPARTING TECHNICAL TRAINING WHICH WERE APP ROVED BY THE NCVT. BY LETTING OUT THE PREMISES, THE SPACE IS UTILISED FOR TRAINING THE JET AIRWAYS EMPLOYEES AND OTHERS TO OBTAIN TECHNICAL KNOWLEDGE WHEREIN THE ASSESSEE WAS ALSO IMPARTING TRAINING AND HAD THE BENEFIT OF THE LAB, ETC. , PROVIDED BY THEM , A ND THUS THE RENTAL INCOME AND INCOME RECEIVED FOR SERVICES RENDERED CANNOT BE TREATED AS COMMERCIAL ACTIVITY SINCE IT IS FOR THE ADVANCEMENT OF THE OBJECT OF GENERAL PUBLIC UTILITY. IN THIS REGARD HE RELIED UPON THE DECISION OF THE HON'BLE CALCUTTA HIGH CO URT IN THE CASE OF DIT VS. SAHU JAIN TRUST (ITA NO. 38 OF 2001 DATED 31 ST MARCH, 2011) WHEREIN THE COURT OBSERVED THAT IF THE RENTAL INCOME W AS RECEIVED BY WAY OF SUBLETTING, TO ENABLE THE TRUST TO CARRY OUT ITS CHARITABLE OBJECT IN EFFECTIVE MANNER, EXEMP TION CANNOT BE DENIED. HE THUS STRONGLY SUBMITTED THAT ASSESSEE IS STILL ENGAGED IN EDUCATIONAL ACTIVITY AND LETTING OUT OF PREMISES IS EXTENSION OF ITS ACTIVITY SINCE THE SPACE IS UTILISED FOR THE SAME PURPOSE, I.E. VOCATIONAL TRAINING. AT ANY RATE, IT FA LLS WITHIN THE MEANING OF EDUCATION SINCE IT IS NOT DENIED THAT THE INCOME IS UTILISED FOR CHARITABLE ACTIVITIES. 12. ON THE OTHER HAND, THE LEARNED D.R. STRONGLY RELIED UPON THE ORDERS PASSED BY THE TAX AUTHORITIES. HE SUBMITTED THAT IN RE SPECT OF A.Y. 2010 - 11 PROVISION TO SECTION 2(15) WAS NOT APPLICABLE SINCE THE RECEIPTS ARE LESS THAN ` 10 LAKHS WHEREAS IN THE YEAR UNDER CONSIDERATION THE RECEIPTS FROM JET AIRWAYS AND OTHERS EXCEED ` 10 LAKHS AND AN AUTOMATIC PRESUMPTION ARISES THAT ASSESSEE IS ENGAGED IN C OMMERCIAL ACTIVITY. HOWEVER, HE HAS NOT DENIED THE FACT THAT THE PRESUMPTION CAN BE REBUTTED BY THE ASSESSEE BY PRODUCING SUFFICIENT MATERIAL TO PROVE THAT THE INCOME EARNED IN THE COURSE OF THE ACTIVITY FALLS OUTSIDE THE AMBIT OF EXPRESSION ADVANCEMENT O F ANY OTHER OBJECT OF THE GENERAL PUBLIC UTILITY SINCE THE PURPOSE OF THE TRUST WAS PROVIDING EDUCATION WHICH CONSTITUTES CHARITABLE PURPOSE EVEN IF IT INCIDENTALLY INVOLVES COMMERCIAL ACTIVITY. ITA NO. 5973/MUM/2013 ST. JOSEPH'S TECHNICAL SCHOOL 8 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSE D THE RECORD. THE MAIN CLAIM OF THE REVENUE IS ESSENTIALLY ON TWO COUNTS , I.E. (I) ASSESSEE ADVANCED SOME AMOUNT TO DON BOSCO INSTITUTE OUT OF ACCUMULATED INCOME SET APART FOR APPLICATION , IN TERMS OF SECTION 11(2) OF THE ACT , WHICH IS IN VIOLATION OF THE PROVISIONS OF SECTION 11(5) OF THE ACT, AND (II) ASSESSEE LET OUT ITS PREMISES PARTLY TO JET AIRWAYS AND OTHERS AND THE INCOME EARNED THEREFROM IS ASSESSABLE TO TAX AS BUSINESS INCOME. ON THE OTHER HAND, THE CASE OF THE ASSESSEE IS THAT THE ACTIVITY OF LEA SING OUT PROPERTY WAS FOR ADVANCEMENT OF THE OBJECT OF GENERAL PUBLIC UTILITY; ASSESSEE WAS ENGAGED IN IMPARTING VOCATIONAL TRAINING AND THE INSTITUTE WAS RECOGNISED BY NCVT. THE PROPERTY WAS LET OUT FOR NO OTHER PURPOSE THAN FOR GIVING TECHNICAL TRAINING. JET AIRWAYS AND OTHERS TO WHOM THE PREMISES WERE LET OUT WAS ALSO ENGAGED IN IMPARTING TECHNICAL TRAINING AND THE ASSESSEE HAD ALSO EARNED INCOME BY PARTICIPATING IN THE TRAINING PROGRAMMES CONDUCTED BY THEM IN THE FORM OF OFFERING THE SERVICES TO THE LES SEE. IN FACT THE AGREEMENT WITH TATA SKY CLEARLY STIPULATES THAT THE INCOME SHOULD BE APPLIED SOLELY TOWARDS PROMOTION OF THE OBJECT OF THE SOCIETY. SIMILARLY, JET AIRWAYS SOUGHT THE EXPERTISE FOR CONDUCTING PROGRAMMES FOR THEIR EMPLOYEES AND STAFF AND ASSESSEE CHARGED FOR IMPARTING SUCH TRAINING. THE STAFF AND TRAINEES OF JET AIRWAYS WILL HAVE ACCESS TO THE PLAY GROUND AND OTHER AMENITIES AVAILABLE TO ALL STUDENTS. LEAVE LICENCE AGREEMENT WITH EKBOTE AUTO CONSULTANT WAS TO CONDUCT REPAIRING AND SERVICING OF CARS AS WELL AS PROVIDING HANDS - ON PRACTICAL TRAINING IN AUTOMOBILE REPAIRS TO THE STUDENTS OF THE ASSESSEE FREE OF COST. TRAINING TIMINGS ARE TO BE OBSERVED STRICTLY AS PER NORMAL SCHOOLING. IN THE CASE OF DIT VS. SAHU JA IN TRUST 56 DTR 402 (CALCUTTA) IT WAS OBSERVED THAT EXEMPTION UNDER SECTION 11 CANNOT BE DENIED ON TH E GROUND THAT THE TRUST HAD LET OUT PROPERTY FOR EFFICIENT UTILISATION OF ITS ASSETS. THE CBDT IN ITS CIRCULAR DATED 19 TH DECEMBER, 2008 CLARIFIED BY MENTIONING THAT THE NEWLY INSERTED PROVISO TO SECTION 2(15) WILL NOT APPLY WHERE THE PURPOSE OF A TRUST OR INSTITUTION IS EDUCATION, EVEN IF IT INCIDENTALLY INVOLVES CARRYING ON OF COMMERCIAL ACTIVITIES. IN THE CASE OF SAMUDRA INSTITUTE OF MARITIME VS . DDIT (ITA NO. 5760/MUM/2010) ITAT H BENCH, MUMBAI, VIDE ITS ORDER DATED 30.11.2011 , OBSERVED THAT EVEN IF T HE COURSES ARE NOT APPROVED BUT IF ITA NO. 5973/MUM/2013 ST. JOSEPH'S TECHNICAL SCHOOL 9 THE INTENTION OF THE ASSESSEE WAS TO GIVE TECHNICAL TRAINING, EXEMPTION UNDER SECTION 11 CANNOT BE DENIED. IN OTHER WORDS, AS LONG AS THE TRUST IS IMPARTING EDUCATION AS PER THE OBJECT OF THE TRUST, INCOME EARNED BY SUCH TRUST SHOULD BE ALLOWED THE BENEFIT OF EXEMPTION UNDER SECTION 11 OF THE ACT. HAVING REGARD TO THE CASE LAW CITED BEFORE US WE ARE OF THE VIEW THAT SO LONG AS THE ASSESSEE HAS LET OUT THE PROPERTY FOR EFFICIENT UTILISATION OF ITS ASSETS WITH A LARGER PURPO SE OF IMPARTING TECHNICAL TRAINING IN THE SAID CAMPUS, ASSESSEE CAN BE SAID TO BE CARRYING ON A CHARITABLE ACTIVITY AND INCOME THEREFROM IS EXEMPT FROM TAX. 14. THIS LEAVES US WITH THE ISSUE OF THE AMOUNT GIVEN TO DON BOSCO INSTITUTE WITHOUT CHARGING ANY INTE REST FOR A SHORT PERIOD. THE CASE OF THE ASSESSEE IS THAT THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ALARIPPU (SUPRA) WAS WRONGLY APPLIED BY THE TAX AUTHORITIES SINCE IT IS IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE CASE OF THE AO AS WELL AS THE CIT(A) WAS THAT THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 11(5) OF THE ACT SINCE THE MONEY IS NOT INVESTED OR DEPOSITED IN THE FORMS OR M ODES SPECIFIED IN SECTION 11(5) WHEREAS THE CASE OF THE ASSESSEE IS THAT NO PART OF THE INCOME IS APPLIED OR INVESTED BY WAY OF ADVANCES TO DON BOSCO INSTITUTE AND ON IDENTICAL ISSUE THE HON'BLE DELHI HIGH COURT, IN THE CASE OF ACME EDUCATIONAL SOCIETY 326 ITR 146 , OBSERVED THAT INTEREST FREE LOAN GIVEN BY THE ASSESSEE SOCIETY TO ANOTH ER SOCIETY WITH IDENTICAL OBJECT CANNOT BE TREATED AS INVESTMENT OR DEPOSIT IN WHICH EVENT THERE IS NO VIOLATION OF SECTION 13(1)(D) R.W.S. 11(5) OF THE ACT. THE CASE OF THE ASSESSEE HEREIN IS THAT BOTH THE ASSESSEES HAVE SIMILAR OBJECTS AND WERE REGI STERED UNDER SECTION 12A OF THE ACT AND INTEREST FREE LOAN WAS RETURNED SUBSEQUENTLY. THE CLAIM OF THE ASSESSEE IS NOT DISPUTED BY THE LEARNED D.R. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE AND IN THE LIGHT OF THE DECISION OF THE HON'BLE DELHI HIGH CO URT, WE ARE OF THE VIEW THAT THE AMOUNT ADVANCED BY THE ASSESSEE TO DON BOSCO INSTITUTE IS NOT COVERED BY SECTION 11(5) OF THE ACT AND EVEN ON THAT COUNT THE CLAIM OF EXEMPTION COULD NOT HAVE BEEN DENIED TO THE ASSESSEE. UNDER THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE PLEA TAKEN BEFORE US BY THE ASSESSEE MERITS ACCEPTANCE AND WE ITA NO. 5973/MUM/2013 ST. JOSEPH'S TECHNICAL SCHOOL 10 DIRECT THE AO TO GRANT EXEMPTION UNDER SECTION 11 OF THE ACT ON THE INCOME EARNED BY THE ASSESSEE, INCLUDING LEASE RENT, ETC. 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2015. SD/ - SD/ - ( SANJAY ARORA ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 17 TH JUNE, 2015 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 1 , MUMBAI 4. DIRECTOR OF INCOME TAX (E) , MUMBAI 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.