DDIT (E), New Delhi V. The Institute of Chartered Accountants of India, New Delhi

ITA 6526/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7569 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 18-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 06-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA M BISWAS
• Keywords: Business income; Charitable institution
• Section: 143(3); 12A; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 6526/DEL/2013 A.Y. : 2010-11 D Y. DIRECTOR OF INCOME TAX(E), TRUST CIRCLE-IV, NEW DELHI ROOM NO. 2409, 24 TH FLOOR, BLOCK E-2, PRATYAKSH KAR BHAWAN, CIVIL CENTRE, JL NEHRU MARG, NEW DELHI VS. THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, PB-7100, ICAI BHAWAN, IP ESTATE, NEW DELHI 110 002 (PAN : AAAAT7798M) (APPELLANT ) (RESPONDENT ) ASSEESSEE BY : SH. RAJESH JAIN, CA DEPARTMENT BY : MS. PARAMITA M. BISWAS, CIT(DR) ORDER PER H.S. SIDHU : JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 1 2.9.2013 PERTAINING TO ASSESSMENT YEAR 2010-11. 2. THE FOLLOWING ISSUES HAVE BEEN RAISED BY THE RE VENUE:- ITA NO.6526/DEL/2013 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN IGNORING THA T THE ASSESSEE'S PREDOMINANT OBJECTIVES ARE TO CONDUCT EXAMINATIONS FOR THE CANDIDATES FOR CHARTERED ACCOUNTANTS AND TO REGULATE IT'S MEMBERS AND IT DOE S NOT PROVIDE ANY SCHOLASTIC EDUCATION, THEREFORE, IT S ACTIVITIES DO NOT FALL WITHIN THE CATEGORY OF EDUCA TION COVERED BY THE DEFINITION OF THE EXPRESSION 'CHARIT ABLE PURPOSE' WHICH IS SECOND LIMB OF THE SECTION 2(15) OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AS HON'B LE SUPREME COURT IN THE CASE OF SOLE TRUSTY, LOK SHIKSHANA TRUST VS. COMMISSIONER OF INCOME TAX (1975) 10 ITR 234 (SC) HAS DEFINED WORD 'EDUCATION' AND OBSERVED THAT 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. THE WORD ITA NO.6526/DEL/2013 3 'EDUCATION' HAS NOT BEEN USED IN THAT WIDE AND EXTENDED SENSE ACCORDING TO WHICH EVERY ACQUISITIO N OF FURTHER KNOWLEDGE CONSTITUTES EDUCATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) HAS ERRED IN IGNORING THA T THE ASSESSEE'S ACTIVITY FALLS UNDER THE CATEGORY OF 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' AND FIRST PROVISO TO SECTION 2(15) IS EARL Y APPLICABLE ON IT AS 'INCOME-FROM COACHING CLASS' WA S EXPLICITLY BUSINESS RECEIPT IN NATURE. 4. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING.' 3. IN THIS CASE ASSESSING OFFICER HAS OBSERVED THA T THE ASSESSEE IS ESTABLISHED BY THE ACT OF PARLIAMENT O F ICAI ACT OF 1949 AND THE ASSESSEE COMES UNDER THE MINISTRY OF C ORPORATE AFFAIRS. THE ASSESSEE IS REGISTERED U/S. 12A OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED THE ACT) AND HAS BE EN CLAIMING ITA NO.6526/DEL/2013 4 EXEMPTION U/S. 11 OF THE ACT WHICH HAS BEEN DENIED BY THE ASSESSING OFFICER MAINLY ON THE GROUND THAT THE AS SESSEE IS INVOLVED IN COMMERCIAL ACTIVITIES AS THE ASSESSEE R ECEIVES COACHING FEES FROM THE STUDENTS OF CA WHILE GIVING COACHING TO THE CA STUDENTS. HE FURTHER HELD THAT ASSESEES CA SE FALLS UNDER THE CATEGORY OF GENERAL PUBLIC UTILITY AND PROVISO TO SECTION 2(15) OF THE ACT IS CLEARLY APPLICABLE IN THIS CASE . ACCORDINGLY, EXEMPTION U/S. 11 & 12 OF THE ACT IS DENIED TO THE ASSESSEE SOCIETY AND ITS INCOME IS COMPUTED AS NORMAL AOP. THE ASSESSING OFFICER ASSESSED THE INCOME OF THE ASS ESSEE AT RS. 12305.37 LACS VIDE HIS ORDER DATED 21/3/2013 PASSED U/S. 143(3) OF THE I.T. ACT, 1961. 4. AGAINST THE AFORESAID ORDER OF THE AO, ASSESSEE APPEALED BEFORE THE CIT(A), WHO VIDE HIS IMPUGNED ORDER DAT ED 12.9.2013 HAS ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A) DATED 12.9.2013, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.6526/DEL/2013 5 6. LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFF ICER AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL AND REQUESTED THAT APPEAL FILED BY THE REVENUE MAY BE A LLOWED BY SETTING ASIDE THE ORDER OF THE LD. CIT(A), BECAUSE THE ACTIVITIES OF THE ASSESSEE-SOCIETY DOES NOT FALL WITHIN THE CATEG ORY OF EDUCATION COVERED BY THE DEFINITION OF THE EXPRESSI ON CHARITABLE PURPOSE. HOWEVER, SHE SUBMITTED THAT THE ASSESSEE S ACTIVITY FALLS UNDER THE CATEGORY OF ADVANCEMENT OF ANY OTH ER OBJECT OF GENERAL PUBLIC UTILITY. LD. DR HAS FURTHER STATED THAT DEPARTMENT HAS FILED AN APPEAL AGAINST THE ORDER OF THE HON BLE HIGH COURT WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A) IN THE IM PUGNED ORDER WHILE ALLOWING THE APPEAL OF ASSESSEE BEFORE THE HO NBLE SUPREME COURT WHICH IS STILL PENDING, THEREFORE, SHE REQUESTED THAT THE DECISION OF THE TRIBUNAL MAY BE KEPT IN A BEYANCE TILL THE OUTCOME OF THE HONBLE SUPREME COURT. 7. ON THE OTHER HAND, LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS STATED THAT THE MAIN ACTIVITIES OF TH E ASSESSEE- SOCIETY ARE TO ENROLL CA STUDENTS, TO PROVIDE STUD Y MATERIAL, TO CONDUCT CLASSES, TO CONDUCT EXAMINATION, TO AWARD D EGREE OF CA AND OTHER COURSES, TO REGULAR THE PROFESSION OF CA AND TO ISSUE ACCOUNTING STANDARDS ETC. THE COACHING CLASSES ARE CONDUCTED FOR ITA NO.6526/DEL/2013 6 THE BENEFIT OF THE CA STUDENTS TO MAKE THEM PROFESS IONALLY EFFICIENT AND THE COACHING CLASSES ARE INTEGRAL PAR T OF IMPARTING EDUCATION AND ITS ACTIVITIES COME UNDER THE DEFINIT ION OF EDUCATION U/S. 2(15) OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE EXEMPTION TO THE ASSESSEE WAS DENIED EARLIER ON THE GROUND THAT THE ASSESSEE IS INVOLVED IN COMMERCIAL ACTIVITIES B UT THE EXEMPTION HAS BEEN GRANTED TO THE ASSESSEE FOR THE ASSESSMENT YEARS 2005-06, 2006-07, 2007-08 BY THE LD. CIT(A) AN D THE TRIBUNAL AND THE HIGH COURT. HENCE, THE PRESENT ISS UES IN DISPUTE IS SQUARELY COVERED BY THE VARIOUS DECISIONS OF THE TRIBUNAL, HONBLE HIGH COURT AND THE HONBLE SUPREME COURT OF INDIA. TO SUPPORT HIS CONTENTION, HE FILED THE PAPER BOOK CON TAINING PAGES 1 TO 96 HAVING THE COPIES OF THE FOLLOWING JUDICIAL DECISIONS:- 1. DISMISSAL OF DEPARTMENT SLP BY HONBLE SUPREME COURT OF INDIA IN THE MATTER OF DDIT AND ORS. VS. ICAI AND ORS DATED 27.1.2014. ITA NO.6526/DEL/2013 7 2. JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE MATTER OF ICAI AND ANR. VS. DGIT AND ORS. DATED 4.7.2013. 3. JUDGMENT OF THE HONBLE HIGH COURT IN THE MATTER OF DIT (E) VS. ICAI DATED 11.5.2012. 4. ITAT ORDER DATED 18.10.2010 FOR THE AY 2005-06 IN ITA NO. 1853/DEL/2010 TITLED AS ICAI VS. DIT(E). 5. ITAT ORDER DATED 09.1.2012 FOR THE AY 2006-07 IN ITA NO. 1384/DEL/2010 TITLED AS ADIT(E) VS. ICAI. 6. ITAT ORDER DATED 16.6.2011 FOR AY 2007-08 IN ITA NO. 1930/DEL/2011 TITLED AS ADIT(E) VS. ICAI. 7. ITAT ORDER DATED 17.4.2014 FOR AY 2009-10 IN ITA NO. 2088/DEL/2013 TITLED AS DDIT(E) VS. ICAI. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE IMPUGNED ORDER AND THE CASE LAWS CIT ED THEREIN AND ALSO BY THE LD. COUNSEL OF THE ASSESSEE, AS AFORESA ID. WE FIND ITA NO.6526/DEL/2013 8 THAT THE REQUEST OF THE LD. DR FOR KEEPING IN ABEYAN CE THE TRIBUNAL ORDER IS NOT TENABLE, BECAUSE SHE WAS UNAB LE TO PRODUCE THE COPY OF ANY STAY ORDER GRANTED BY THE HONBLE S UPREME COURT OF INDIA, IN THE SLP APPEAL FILED BY THE REVEN UE, AS STATED BY HER. HENCE, UNDER THE CIRCUMSTANCES, WE REJECT T HE SAID REQUEST OF THE LD. DR AND PROCEED FURTHER TO ADJUDI CATE THE ISSUE IN DISPUTE ON MERIT. 8.1 WE FIND THAT THE LD. CIT(A) HAS ELABORATELY DISC USSED THE ISSUE IN DISPUTE IN HIS IMPUGNED ORDER DATED 12.9. 2013 VIDE PARA NO. 2.2 TO 3 AT PAGE NO. 3 TO 4. THE RELEVANT PORTI ON OF HIS FINDING IS REPRODUCED AS UNDER:- 2.2 I HAVE CONSIDERED THE ORDER OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE AND I FIND THE CONSIDER ABLE MERIT IN THE SUBMISSIONS OF THE ASSESSEE THAT THE C ASE OF THE ASSESSEE IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THE LD. CIT(A), HON'BLE TRIBUNAL AND HON'BLE HIGH COURT ALLOWING EXEMPTION TO THE ASSESSEE ULS 11 AND HOLDING THAT THE ASSESSEE I S AN ITA NO.6526/DEL/2013 9 EDUCATIONAL INSTITUTION. THERE WAS A SIMILAR ISSUE OF DENIAL OF EXEMPTION ULS 11 AND MY PREDECESSOR AFTER EXAMINING THE ISSUE HAS ALLOWED EXEMPTION U/S 11 FO R THE ASSESSMENT YEARS 2006-07, 2007-08 & 2009-10. THE LD. CIT (A) HAD ALLOWED EXEMPTION TO THE ASSESSE E FOR THE ASSESSMENT YEAR 2007-08 WHICH HAS BEEN ALSO ALLOWED BY THE HON'BLE TRIBUNAL VIDE THE ORDER DATE D 16/06/2011 IN ITA NO. 1930IDEL/2011 AND THE DEPARTMENTAL APPEAL HAS BEEN DISMISSED. THE DIT(E) HAD DENIED EXEMPTION TO THE ASSESSEE IN THE PROCEEDINGS ULS 263 FOR THE A.Y 2005-06 BUT THE HON'BLE TRIBUNAL HAS CANCELLED THE ORDER OF THE DIT (E) VIDE THE ORDER DATED 18/10/2010 IN ITA NO. 1853/DEL/2010. THE DEPARTMENT HAD FILED APPEAL AGAINST THE ORDER OF THE HON'BLE TRIBUNAL BUT THE HON'BLE HIGH COURT HAS DISMISSED THE DEPARTMENTAL APPEAL VIDE THE ORDER DATED 19/9/2011 IN ITA NO. 869/2011. THE HON'BLE DELHI HIGH COURT IN THE ORDER DATED 4/7/2013 HAS ALSO DIRECTED THE DGIT(E) TO GRA NT ITA NO.6526/DEL/2013 10 EXEMPTION TO THE ASSESSEE ULS 10(23C)(IV) HOLDING T HAT THE ASSESSEE IS AN EDUCATIONAL INSTITUTION. THE AO IS ALSO AWARE THAT THE CASE OF THE ASSESSEE IS COVERED IN FAVOUR OF THE ASSESSEE BUT HAS NOT ALLOWED EXEMPTIO N TO THE ASSESSEE AND THE GROUND THE DEPARTMENT HAS N OT ACCEPTED THESE ORDERS AND THE DEPARTMENT IS IN APPE AL IN THE HON'BLE SUPREME COURT VIDE PARA 43 OF THE ASSESSMENT ORDER. AFTER CONSIDERING ALL THE FACTS A ND CIRCUMSTANCES OF THE, CASE I AM OF THE VIEW THAT TH E CASE OF THE ASSESSEE IS FULY COVERED IN FAVOUR OF T HE ASSESSEE BY THE ASSESSEES OWN CASE OF EARLIER YEAR S BY THE ORDERS OF THE LD. CIT(A), HONBLE TRIBUNAL AND HONBLE HIGH COURT AND AS SUCH RESPECTFULLY FOLLOWI NG THE ABOVE ORDERS THE APPEAL OF THE ASSESSEE IS ALLO WED AND THE AO IS DIRECTED TO ALLOW EXEMPTION TO THE ASSESSEE. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.6526/DEL/2013 11 8.2 AFTER GOING THROUGH THE AFORESAID FINDINGS, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DISPUTE IS SQ UARELY COVERED BY THE VARIOUS DECISIONS OF THE ITAT, HONBLE HIGH COURT AND THE HONBLE SUPREME COURT OF INDIA IN ASSESSEES OWN IN PRECEDING ASSESSMENT YEARS. FOR THE SAKE OF CLARITY, WE ARE DISCUSSING HERE-IN-BELOW THE ITAT, DELHI BENCH DECISION DATED 17.4.2014 PASSED IN ITA NO. 2088/DEL/2013 FOR THE PRECEDING ASSESSMENT YEAR I.E. 2009-10, TITLED DY. DIRECTOR OF INCOME TA X (E) VS. THE INSTITUTE OF CHARTERED ACCOUNTANTS IN WHICH THE EXA CTLY SIMILAR ISSUES HAVE BEEN DEALT WITH AND THE APPEAL HAS BEEN DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION I.E. PARA NO. 2 TO 7 AT PAGES 1 TO 8 OF TH E AFORESAID ORDER OF THE TRIBUNAL DATED 17.4.2014 IS REPRODUCED AS UNDER:- 2. GROUND NO.3 OF THE REVENUE IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. REMAINING GROUNDS OF THE REV ENUE READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN IGNORING THAT THE ITA NO.6526/DEL/2013 12 ASSESSEES PREDOMINANT OBJECTIVES ARE TO CONDUCT EXAMINATIONS FOR THE CANDIDATES FOR THE CHARTERED ACCOUNTANTS AND TO REGULATE IT MEMBERS AND IT DOES NOT PROVIDE ANY SCHOLASTIC EDUCATION, THEREFORE, ITS ACTIVITIES DO NOT FALL WITHIN THE CATEGORY OF EDUCATION COVERED BY THE DEFINITION OF THE EXPRESSION CHARITABLE PURPOSE WHICH IS SECOND LIMB OF THE SECTION 2(15) OF THE I.T. ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN IGNORING THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF SOLE TRUSTY, LOK SHIKSHANA TRUST VS. COMMISSIONER OF INCOME TAX (1975) 10 ITR 234(C) WHEREIN THE HONBLE APEX COURT HAS DEFINED THE WORD EDUCATION AND OBSERVED THAT THE SENSE IN WHICH THE WORD EDUCATION HAS BEEN SUED IN SECTION 2(15), IS THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO YOUNG IN PREPARATION FOR THE WORK OF LIFE. THE WORD EDUCATION HAS NOT BEEN USED IN ITA NO.6526/DEL/2013 13 SECTION 2(15), IS THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING GIVEN TO YOUNG IN PREPARATION FOR THE WORK OF LIFE. THE WORD EDUCATION HAS NOT BEEN USED IN THAT WIDE AND EXTENDED SENSE ACCORDING TO WHICH EVERY ACQUISITION OF FURTHER KNOWLEDGE CONSTITUTES EDUCATION. 3. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S AND CAREFULLY PERUSED THE RECORD PLACED BEFORE US. DURI NG THE ARGUMENTS, ASSESSEES REPRESENTATIVE SUBMITTED COPI ES OF THE DECISIONS OF ITAT DELHI H BENCH IN ASSESSEES OWN CASE I.E. ITA NO. 1930/D/2011 DATED 16.6.2011 FOR AY 200 7-08, COPY OF THE JUDGMENT OF HONBLE HIGH COURT OF DELHI DATED 04.07.2013 IN ASSESSEES OWN CASE BY WHICH WRIT PET ITIONS OF THE ASSESSEE FOR AY FROM 2006-07 TO 2011-12 HAVE BE EN ALLOWED BY SETTING ASIDE IMPUGNED ORDERS OF DIRECTO R GENERAL INCOME TAX (EXEMPTION) DATED 13.04.2012 AND 28.9.2012 WITH A DIRECTION TO DGIT(E) TO RECOGNIZE THE PETITIONER/ASSESSEE AS ELIGIBLE U/S 10(23)(C)(IV) O F THE INCOME TAX ACT, 1961(FOR SHORT THE ACT) FOR CHARITA BLE ITA NO.6526/DEL/2013 14 PURPOSES, HAVING REGARD TO ITS OBJECT AND IMPORTANC E, SUBJECT TO THE PETITIONER/ASSESSEE COMPLYING WITH T HE OTHER PROVISIONS OF THE ACT. THE AR ALSO SUBMITTED A CO PY OF THE ORDERS OF HONBLE SUPREME COURT OF INDIA IN SPECIAL LEAVE TO APPEAL (CIVIL) NO. CC792/2014 DATED 27.01.2014 BY W HICH SPECIAL LEAVE PETITION OF THE DEPARTMENT AGAINST TH E ORDER OF THE JUDGMENT OF HONBLE HIGH COURT OF DELHI DATED 04.07.2013 (SUPRA) HAVE BEEN DISMISSED. LD. DR SUBMI TTED THAT THE COMMISSIONER OF INCOME TAX(A) HAS ERRED IN IGNORING THAT THE ASSESSEES PREDOMINANT OBJECTIVES ARE TO CONDUCT EXAMINATION FOR THE CAS AND TO REGULATE ITS MEMBERS AND IT DOES NOT PROVIDE ANY SCHOLASTIC EDUC ATION, THUS, ITS ACTIVITIES DO NOT FALL WITHIN THE CATEGOR Y OF EDUCATION COVERED BY THE DEFINITION OF THE EXPRESSI ON CHARITABLE PURPOSES WHICH IS THE SECOND LIMB OF S ECTION 2(15) OF THE ACT. 4. THE DR FURTHER POINTED OUT THAT THE COMMISSIONE R OF INCOME TAX(A) HAS ERRED IN NOT TAKING COGNIZANCE OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SO LE ITA NO.6526/DEL/2013 15 TRUSTEE, LOKA SHIKSHANA TRUST VS COMMISSIONER OF INC OME TAX (1975) 101 ITR 234 (SC) WHEREIN THE HONBLE APE X COURT HAS DEFINED THE WORD EDUCATION AND OBSERVED THAT THE MEANING OF THE WORD EDUCATION HAS BEEN DEFINE D AND USED IN SECTION 2(15) OF THE ACT AND AS PER THIS PR OVISION, THE SYSTEMATIC INSTRUCTION, SCHOOLING OR TRAINING G IVEN TO THE YOUNG IS PREPARATION FOR THE WORK OF LIFE IS EDUCAT ION. THE DR FURTHER POINTED OUT THAT THE WORD EDUCATION HAS N OT BEEN USED IN THAT WIDE AND EXTENDED SENSE AND, ACCORDIN GLY, ANY OTHER ACQUISITION OF FURTHER KNOWLEDGE CONSTITUTES EDUCATION. 5. REPLYING TO THE ABOVE, THE AR POINTED OUT PARA 4 TO 8 OF THE ORDER OF ITAT H BENCH IN ITA NO. 1930/D/20 11 (SUPRA) WHEREIN DISMISSING THE APPEAL OF THE REVENU E, IT HAS BEEN HELD THAT THE ASSESSEE INSTITUTE IS AN EDUCATI ONAL INSTITUTE, HENCE ITS INCOME WILL BE EXEMPT U/S 11 A S EDUCATION FALLS WITHIN THE MEANING OF CHARITABLE PU RPOSES U/S 2(15) OF THE ACT. THE RELEVANT OPERATIVE OBSERVATIO NS AND FINDINGS PART OF THIS ORDER READ AS UNDER:- ITA NO.6526/DEL/2013 16 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS), REFERRED TO HIS OWN APPELLATE ORDER FOR A.Y. 2006-07 AS UNDER:- I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE LD. AUTHORISED REPRESENTATIVE OF THE APPELLANT INSTITUTION VISA-VIS FINDING OF THE ASSESSING OFFICER MADE OUT IN THE ASSESSMENT ORDER IN RESPECT OF HOLDING THE INCOME OF COACHING CLASSES AS AN ACTIVITY OF BUSINESS. THE MAIN EMPHASIS OF THE ASSESSING OFFICER IN ARRIVING TO CONCLUSION THAT INCOME OF THE APPELLANT INSTITUTE FROM COACHING CLASSES IS AN ACTIVITY OF BUSINESS, IS THE FIGURE OF EARNING FROM COACHING CLASSES AS REFLECTED BY HIM IN THE TABLE PREPARED IN THE ASSESSMENT ORDER GIVING DETAILED OF GROSS INCOME OF COACHING, EXPENDITURE INCURRED IN COACHING AND NET EARNING FROM COACHING CLASSES FROM ASSESSMENT YEAR 2002-03 TO ASSESSMENT YEAR 2008- 09 AND HIS REMARK THAT THE APPELLANT INSTITUTE IS EARNING HUGE INCOME OVER THE ITA NO.6526/DEL/2013 17 YEARS LIKE ANY BUSINESSMAN EARN FROM THE ACTIVITIES OF BUSINESS. HOWEVER, ON THE OTHER SIDE THE LD. AUTHORISED REPRESENTATIVE OF THE APPELLANT EMPHASIZED THAT THE CONDUCTING OF COACHING CLASSES THROUGH REGIONAL COUNCILS, THE APPELLANT INSTITUTE, FOLLOWING ITS MAIN PURPOSE AND OBJECTIVE OF GIVING TRAINING TO THE FUTURE CHARTERED ACCOUNTANTS, FOR WHICH IT HAS BEEN ENACTED BY THE PARLIAMENT AND FURTHER EMPHASIZING THAT CBDT WHILE GRANTING NOTIFICATION U/S 10(23C)(IV) OF THE ACT TO THE APPELLANT INSTITUTE WAS WELL AWARE ABOUT THE COMPONENT OF ITS INCOME REFLECTED IN ANNUAL ACCOUNTS FILED WITH THE APPLICATION FOR APPLYING FOR EXEMPTION OF INCOME U/S. 10(23C)(IV) OF THE ACT CONSISTENTLY TO THE ASSESSMENT YEAR 2005-06, AND THEREFORE THE OBJECTION OF THE ASSESSING OFFICER IN THIS RESPECT IS MISCONCEIVED, EVEN ON THE PRINCIPLE OF DOCTRINE OF CONSISTENCY ENUNCIATED BY HONBLE SUPREME COURT IN THE CASE OF RADHASWAMY SATSANG (CITED ITA NO.6526/DEL/2013 18 SUPRA). PURSING THE CHARTERED ACCOUNTANTS REGULATIONS, ANNUAL ACCOUNTS OF THE APPELLANT INSTITUTE AND WRITTEN ARGUMENTS OF THE LD. AUTHORISED REPRESENTATIVE AND JUDICIAL PRECEDENTS BROUGHT TO MY NOTICE ON THE ISSUE INVOLVED, I AM INCLINED TO ACCEPT THE ARGUMENT OF THE LD. COUNSEL THAT INCOME OF COACHING CLASSES OF THE APPELLANT INSTITUTE IS NOT AN ACTIVITY OF BUSINESS AS ALLEGED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, BUT THE SAID INCOME HAS ARISEN FROM THE ANCILLARY ACTIVITY ARISEN FROM THE MAIN OBJECTS FOR WHICH IT HAS BEEN ENACTED BY THE PARLIAMENT AND FURTHER ACCEPTED AS SUCH BY CENTRAL BOARD OF DIRECT TAXES YEAR TO YEAR, WHILE NOTIFYING IT FOR THE PURPOSE OF SECTION 10(23C)(IV) OF THE ACT. THE OBSERVATION OF THE ASSESSING OFFICER THAT THE APPELLANT INSTITUTE IS EARNING HUGE INCOME OVER THE YEARS AND THIS SURPLUS INCOME IS EARNED IN A SYSTEMATIC AND ORGANIZED WAY, THE WAY IN WHICH BUSINESS ACTIVITIES ARE CARRIED OUT IS ALSO ITA NO.6526/DEL/2013 19 MISCONCEIVED AS MERELY BECAUSE PROFIT HAS RESULTED FROM THE ACTIVITY OF IMPARTING EDUCATION WOULD NOT CHANGE THE CHARACTER OF THE INSTITUTION. THE HONBLE SUPREME COURT IN THE CASE OF SURAT ART SILK CLOTH MANUFACTURES ASSOCIATION AND HONBLE DELHI HIGH COURT IN THE VERY RECENT JUDGEMENT IN THE CASE OF SISTER CONCERN OF THE APPELLANT INSTITUTE ICAI ACCOUNTING RESEARCH FOUNDATION REPORTED AT 321 ITR 73 HELD THAT THE MERE FACT OF GENERATING INCOME, WHILE CARRYING OUT THE ANCILLARY OBJECTS FOR ACHIEVING THE MAIN OBJECTS, WOULD NOT PER SE CHANGE THE CHARACTER OF THE ASSESSEE TILL THE SURPLUS RECEIVED QUA THESE ACTIVITIES ARE UTILIZED FOR ADVANCEMENT OF THE OBJECTIVES FOR WHICH THE ASSESSEE HAS BEEN ESTABLISHED. HENCE, GROUND NO. 6 IS ALLOWED IN FAVOUR OF THE APPELLANT. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER TOOK NOTE THAT HONBLE ITAT, DELHI BENCH IN ITA NO. 1853/DEL/2010 ALSO HELD THAT: ITA NO.6526/DEL/2013 20 THE INSTITUTE AS SUCH MERELY IT IS RECEIVING COACHING FEE FROM STUDENTS FOR IMPARTING EDUCATION, CANNOT BE SAID TO HAVE BEEN CARRYING ON THE BUSINESS AND ACCORDINGLY IT IS NOT REQUIRED TO MAINTAIN SEPARATE BOOKS OF ACCOUNTS AS ALLEGED BY DIT(E). THE INCOME OF THE COACHING CLASSES EARNED BY THE ASSESSEE INSTITUTE IS WITHIN ITS OBJECTS AND ITS REGULATIONS AND FURTHER THESE ACTIVITIES ARE EDUCATIONAL ACTIVITY WITHIN THE DEFINITION OF SECTION 2(15) OF THE INCOME TAX ACT, 1961, AND CONSEQUENTLY THEREFORE CANNOT BE ACTIVITY OF BUSINESS FOR WHICH SEPARATE BOOKS OF ACCOUNTS ARE REQUIRED TO BE MAINTAINED. THE ORDER OF THE DIT(E) IS THEREFORE NOT SUSTAINABLE AS THE INCOME OF THE INSTITUTE IS EXEMPT NOT ONLY U/S 10(23C)(IV) BUT ALSO UNDER SECTION 11. THE INSTITUTE IS AN EDUCATIONAL INSTITUTE AND HENCE ITS INCOME WILL ALSO BE EXEMPT U/S. 11 AS EDUCATION FALLS WITHIN THE MEANING OF CHARITABLE PURPOSE UNDER SECTION 2(15) OF THE ACT. ITA NO.6526/DEL/2013 21 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL BEFORE US. 6. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 1853/DEL/2010 FOR A.Y. 2005-06. IN THIS REGARD, LD. COUNSEL OF THE ASSESSEE REFERRED PARA 15 OF THE ABOVE SAID ORDER WHICH READS AS UNDER:- 15. THE INSTITUTE AS SUCH MERELY IT IS RECEIVING COACHING FEE FROM STUDENTS FOR IMPARTING EDUCATION, CANNOT BE SAID TO HAVE BEEN CARRYING ON BUSINESS AND ACCORDINGLY IT IS NOT REQUIRED TO MAINTAIN SEPARATE BOOKS OF ACCOUNTS AS ALLEGED BY DIT(E). THE INCOME OF THE COACHING CLASSES EARNED BY THE ASSESSEE INSTITUTE IS WITHIN ITS OBJECTS AND ITS REGULATIONS AND FURTHER THESE ACTIVITIES ARE EDUCATIONAL ACTIVITY WITHIN THE DEFINITION OF SECTION 2(15) OF THE INCOME TAX ACT, 1961, AND CONSEQUENTLY THEREFORE CANNOT BE ACTIVITY OF BUSINESS ITA NO.6526/DEL/2013 22 FOR WHICH SEPARATE BOOKS OF ACCOUNTS ARE REQUIRED TO BE MAINTAINED. THE ORDER OF THE LD.DIT(E) IS THEREFORE, NOT SUSTAINABLE AS THE INCOME OF THE INSTITUTE IS EXEMPT NOT ONLY U/S 10(23C)(IV) BUT ALSO UNDER SECTION 11. THE INSTITUTE IS AN EDUCATIONAL INSTITUTE AND HENCE ITS INCOME WILL ALSO BE EXEMPT UNDER SECTION 11 AS EDUCATION FALLS WITHIN THE MEANING OF CHARITABLE PURPOSE UNDER SECTION 2(15) OF THE ACT. 7. IN LIGHT OF THE ABOVE, LD. COUNSEL OF THE ASSESSEE CONTENDED THAT THIS ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL AS ABOVE. 7.1 LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THIS PROPOSITION. HE FAIRLY AGREED THAT THIS ISSUE STANDS COVERED BY THE SAID TRIBUNAL ORDER. 8. ACCORDINGLY, IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT, WE DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER OF THE LD. COMMISSIONER OF ITA NO.6526/DEL/2013 23 INCOME TAX (APPEALS), HENCE, WE UPHOLD THE SAME. 6. IN THE LIGHT OF ABOVE, LD. AR SUBMITTED THAT THE SOLE ISSUE AGITATED BY THE REVENUE IN THIS APPEAL STANDS COVER ED IN FAVOUR OF THE ASSESSEE BY ABOVE DECISION OF THIS TR IBUNAL. LD. DR COULD NOT SUBSTANTIALLY CONTROVERT THIS PROPOSIT ION AND HAS FAIRLY AGREED THAT THIS ISSUE STANDS COVERED BY THE SAID TRIBUNAL ORDER IN FAVOUR OF THE ASSESSEE AND AGAINS T THE REVENUE. ACCORDINGLY, ON THE BASIS OF DISCUSSION AN D EARLIER ORDER OF THIS TRIBUNAL AS REPRODUCED HEREINABOVE AN D RESPECTFULLY FOLLOWING THE SAME AS AN ORDER OF COOR DINATE BENCH OF THIS TRIBUNAL AS A PRECEDENT, WE DO NOT FI ND ANY INFIRMITY, ILLEGALITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME TA X(A). HENCE, WE UPHOLD THE SAME. ACCORDINGLY, BOTH THE GR OUNDS OF THE REVENUE BEING DEVOID OF MERITS ARE DISMISSED . 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 9 . RESPECTFULLY FOLLOWING THE PRECEDENTS OF THE COORD INATE BENCHES OF THE TRIBUNAL, DECISIONS OF THE HONBLE H IGH COURT OF ITA NO.6526/DEL/2013 24 DELHI AND THE HONBLE SUPREME COURT OF INDIA DELIV ERED IN THE PRECEDING ASSESSMENT YEARS IN ASSESSEES OWN, AS DI SCUSSED ABOVE, WE DO NOT FIND ANY INFIRMITY, ILLEGALITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE WELL REASONED ORDER PA SSED BY THE LD. CIT(A), HENCE, WE UPHOLD THE SAME AND DISMISS THE APPEAL FILED BY THE REVENUE. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/06/2016. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 02/06/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES