M/S.AGASTYA GURUKULAM PUBLIC CHARITABLE TRUST,CHENNAI V. CIT, EXEMPTIONS, CHENNAI

ITA 377/CHNY/2025

AI Insights

The case involves M/s Agastya Gurukulam Public Charitable Trust, which appealed against the decision of the Commissioner of Income Tax (Exemptions), Chennai, denying their registration under Section 12AB of the Income Tax Act, 1961. The CIT(E) had rejected the application based on the grounds that the trust's activities did not qualify as charitable education and did not provide relief to the poor. The Tribunal considered the arguments and evidence presented by both the assessee and the CIT, including the trust's curriculum, accreditation by the National Institute of Open Schooling (NIOS), and financial records. Ultimately, the Tribunal found that the trust's activities did not meet the legal definitions and requirements for charitable status under the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793763 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 06-02-2025
• Other Referred Cases: Sole Trustee, LokaShikshana Trust v. CIT, New Noble Educational Society v. CCIT, Raja Sir Annamalai Chettiar Foundation vs CCIT
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A

Judgement Text

" आयकर अपीलीय अिधकरण ‘ए’ \u0010ा यपीठ चे\u0015ई म\u0018। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA No. 376 & 377/Chny/2025 (Assessment Year N/A) M/s Agastya Gurukulam Public Charitable Trust, Origin Towers, 11-13 Type-2, Dr. VSI Estate, Thriuvanmiyur, Chennai-600041. PAN No. AAITA 2106 R Vs. C.I.T.(Exemptions), Chennai. Appellant/ Assessee Respondent/ Revenue Assessee represented by Shri R. Vishwanathan, C.A. Department represented by Mr. Clement Ramesh Kumar, CIT. Date of hearing 23/09/2025 Date of pronouncement 26/09/2025 PER: RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER: 1. These appeals by the same assessee are directed against the order of learned Commissioner of Income Tax (Exemptions), Chennai [in short, the ld. CIT(E)] both dated 30/12/2024. Since, both these appeals have common facts and grounds, therefore, with the consent of parties, both these appeals were clubbed and heard together and are being decided by this common order. As a lead case, we take ITA No. 376/Chny/2025 as a lead case. In this appeal, the assessee has raised following grounds of appeal: “1. The order dated 30.04.2024 of the Learned CIT Exemptions, Chennai, in ITBA /EXM/F/EX<45/2024-25/1071704388(1) is contrary to facts, opposed to law and untenable. 2. The Learned CIT Exemptions erred in Rejecting the registration of the Trust, without giving any specific finding for the rejection of Appellant trust on the Printed from counselvise.com 2 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) issue of genuineness of the activities of the Appellant trust and Compliance with the other laws for achieving the objects of the trust. 3. Learned CIT Exemptions, Chennai grossly erred in overlooking the fact that the Appellant is registered for recognition with Accredited Educational body. National Institute of Open Schooling (NIOS) as the order received on 26.11.2024. 3.1 The Ld CIT Exemptions grossly further erred in not considering that the Appellant trust is imparting education under a systematic instruction, Schooling and training given to the Students. 3.2 The Ld CIT Exemptions failed to understand that the Syallbus are framed as per the National Council of Educational Research and Training [NCERT] NCERT, upon which the accreditation is given by NIOS. 4. Ld CIT Exemptions without appreciating the on going Scholastic educational activity, came to a conclusion that the Appellant trust is engaged in training the students without systematic curriculum as approved. 5. Ld CIT Exemptions failed to appreciate that the Appellant trust has received donation and applied towards the objects for education and also applied for charity as evident from Financials 31.03.2021, 31.03.2022 and 31.03.2023 and erroneously observed that the Appellant trust is not carrying Charitable activity. 6. Ld CIT Exemptions grossly erred in not considering the Scholarship and discounts given in earlier years 31.03.2021 and concluded that for 31.03.2024 the amount spent is NIL and has not given any scholarship/concession to students. 2. The brief facts of the case are that the assessee is a Public Charitable Trust filed an application on 17/06/2024 in Form 10AB under Rule 17A of the Income Tax Rules, 1962 (in short, the Rules) under item (iii) of clause (ac) of sub-section (1) of Section 12A seeking registration under Section 12AB of the Income Tax Act, 1961 (in short, the Act). The ld. CIT(E) while processing the application under Section 12AB of the Act, noticed that in the Form 10AB dated 17/06/2024 that the objects of the trust are “relief of the poor” and “education”. The ld. CIT(E), therefore, asked the assessee-trust to explain the actual activities of the assessee-trust in pursuing these two objects stated as above. In response to that, the assessee-trust filed details of activities being carried out by the Printed from counselvise.com 3 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) assessee-trust in the field of education and claimed that in pursuance of the above two objects, following activities are being carried out by the assessee- trust as under: “1. Objectives • Develop Basic Listening Skills • Enhance Speaking Abilities • Build Foundational Reading Skills • Establish Early Writing Skills • Introduce Basic Grammar Concepts Thus, the applicant trust has its own curriculum and it has not obtained necessary approval from any authority. It has mentioned that it is carrying open school system. 1. The applicant has stated that it has launched home-school programs in India during the academic year 2020-21. The institution is dedicated to providing a decolonized Indian education. 2. The curriculum in our impart of Education aims to achieve fluency in Samskritam and its rich literary tradition, opening doors to the vast expanse of Bhrateeya Shastric knowledge. The educational experience is enhanced by combining online instruction with biannual camps. 3. The Gurukulam is a class apart from regular institutions with a unique approach to education. Our students engage in India-based subjects like Ganitam, Vigyanam, Samaskritham and Bharateeyalthihasa. 4. The applicant trust has applied for recognition vide Mou dated 24.03.2024 for recognition with National Institute of Open Schooling (NIOS) which is coming under Ministry of Education, Government of India and received the order on 28.11.2024.” The assessee-trust also referred to the income and expenditure account for the A.Y. 2023-24 and also the balance sheet as on 31/03/2024 showing the expenses incurred to achieve these objectives. The ld. CIT(E), however, rejected the claim of the assessee-trust and denied the registration under Section 12AB of the Act on following grounds: Printed from counselvise.com 4 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) (i) That the applicant-trust had received by way of “Fees from Educational Activity” etc. and it has applied income towards “Camp expenses”, “Salary”, “Professional and Consultancy Charges”, “Rent” etc. and no amount has been spent towards “Charity” as envisaged under Section 2(15) of the Act. (ii) The activities of trust cannot be held as education and in turn a charitable one since the term education is not defined as broadly as the trust believes but in a specific and brittle manner under section 2(15) of the Act which has been endorsed by the Hon'ble Supreme Court in its various decisions. The word 'education' has always remained a subject of debate in India for income-tax assessment and exemptions. Education for the purposes of Section 2(15), has a very specific meaning and is not used in a wide and extended sense. Education should normally be considered a process, training and development of students' knowledge, mind, and character in normal schooling. The meaning of the word \"Education\" and the context in which it is used under the Income-tax Act has been explained by the Supreme Court in the case of Sole Trustee, LokaShikshana Trust v. CIT (1975) 101 ITR 234 wherein the Hon’ble Supreme Court has made the observations as under: (a) The sense in which the word \"education\" has been used in section 2(15) is the systematic instruction, schooling or training given to the young in preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. Printed from counselvise.com 5 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) (b) 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 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 other 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 in the great school of life. But that is not the sense 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 the knowledge, skill, mind and character of students by normal schooling. Based on the above reasoning, the Hon’ble Supreme Court held that trust, the object of which is to supply the people with an organ of educated public opinion should not be considered to be one for education but as one for any other object of public utility. Therefore, the scope of the term 'education' is relatively narrow in India and Section 2(15) is not wide enough to include every acquisition of further knowledge within the purview of education. In re., the Trustees of Tribune [1939] 7 ITR 415 (PC), the Privy Council had held that setting up of press and printing of newspaper which provides an educated opinion to the public may or may not be an object of general public utility but it could not be considered as a charitable activity imparting education. 3. The ld. CIT(E) further placed reliance on the decision of the Hon’ble Supreme Court in the case of New Noble Educational Society v. CCIT [2022] 143 Printed from counselvise.com 6 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) taxmann.com 276 reaffirmed the narrow and restricted meaning of the term education, while delivering this judgment, the Supreme Court observed that it is not the broad meaning of the expression which is involved in this case. As was held in T.M.A Pai Foundation v. State of Karma- taka (2002) 8 SCC 481: AIR 2003 SC 355 education in the narrower meaning of the term as scholastic structured learning is what is meant in Article 21A Articles 29-30 and Articles 45- 46 of the Constitution. As to what is 'education' in the context of the IT Act, was explained in LokaShikshana Trust v Commissioner of Income Tax [1975] 101 ITR 234 (SC) in the following terms. \"5. The sense in which the word \"education\" has been used in section 2(15) is the instruction, schooling or training given to the young in preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word \"education\" has not been used in that wide and extended sense, according to which every acquisition of further knowledge constitutes education. According to this wide and extended sense, travelling is education, because as a result of travelling you acquire fresh knowledge. Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge..... All this in a way is education in the great school of life. But that is not the sense 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 the knowledge, skill, mind and character of students by formal schooling. Thus, education imparting formal scholastic learning, is what the Income-tax Act provides for under the head of \"charitable\" purposes, under section 2(15). In other words, the Supreme Court reaffirmed that education will continue to have a narrow scope covering only formal education. Printed from counselvise.com 7 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) 4. The ld. CIT(E), therefore, held that the activities of the trust being collecting fees for giving training the students will not fit into the limbs set by the Income Tax Act and the Hon’ble Supreme Court as the assessee-trust is: (a) not conducting a formal education/scholastic education (b) not having a valid recognition from any authority. (c) only engaged in training the students without systematic curriculum, as approved and not engaged in the process of providing training and development of students' knowledge, mind and character in a normal schooling way. The applicant's system of Gurukulam has not been under any formal recognition from any authority viz., CBSE, State Board etc. Further, The High Court of Madras in the case of Raja Sir Annamalai Chettiar Foundation vs CCIT 2020 116 Taxman.com 128 has held that where the only source of income for schools run by applicant trust was fees from students and no free education or scholarship was provided, such schools were to be held established with profit motive. For the year ending 31.03.2024 under the head \"Scholarships and Discounts\" only \"NIL\" amount is shown and hence, it is construed that it has not given any scholarship/concessions to the students.” The ld. CIT(E) also referred to the CBDT Circular No. 11/2008 wherein it is clearly described as under: \"Relief of poor encompasses a wide range of objects for the welfare of the economically and socially disadvantaged or needy. It will, therefore, include within its ambit purposes such as relief to destitute, orphans or the handicapped, disadvantaged women or children, small and marginal farmers, indigent artisans or senior citizens in need of aid.” Finally, the ld. CIT(E) held that from the details available on records and from the financials, it is seen that the trust is not actually engaged in any such activities which can be treated as relief of the poor. Hence, the activities of the trust cannot be relief of the poor and charitable in nature. Printed from counselvise.com 8 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) 5. Aggrieved by the order of ld. CIT(E), the assessee filed present appeal before this Tribunal. Before us, it was argued by the ld. AR of the assessee as under: that before rejecting the application of the assessee-trust, the application under Section 12AB, he has to satisfy himself about: (A) the genuineness of activities of the trust or institution; and (B) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects. It is submitted that the Ld CIT(E) after receiving all the desired information as per his query letter and did not controvert them on genuineness of activity or compliance in relation to any other law in achieving its objects, but raised a issue which ought to be done in a regular /scrutiny assessment in relation to the amount spent and registration. Thus the action of the Ld CIT(E) suffers from infirmity which cannot be sustained. It is further submitted that the assessee being registered for recognition with Accredited Educational body, National Institute of Open Schooling (NIOS) as the order received on 26.11 2024.. Copy enclosed in page no 36-46. This fact was not considered by the Ld CIT(E) NIOS is a registered body and it is recognized as equivalent CBSE and other boards. NIOS is recognized for admission with all Indian Universities. Thus the assessee is registered with accredited Educational body to carry on Education activity. The assessee trust submit that the Curriculum for subjects taught, Tamil, English, Ganitham [maths], Hindi, and it is overview of the subjects taught. In the proceeding the time table for the primary and middle classes were given and sample copy of the Transfer Certificate given to the student leaving the school Printed from counselvise.com 9 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) was given. Copy enclosed herewith... 54-55. it is submitted that the syllabus is based on NCERT, upon which the NIOS has given accreditation. Thus the assessee demonstrated that a formal education activity was carried on which the Ld CIT(E) did not find any objection and having accepted it, and without considering these details furnished in the proceeding, the Registration under Section 12AB/80G was rejected. It is submitted that Ld CIT Exemptions failed to appreciate that the Appellant trust has received donation and applied towards the objects for education and also applied for charity as evident from Financials 31.03.2021, 31.03.2022 and 31.03.2023 and erroneously observed that the Appellant trust is not carrying Charitable activity Copy of Audited Financials enclosed in Page no 17-27. It is further submitted that the Ld CIT Exemptions grossly erred in not considering the Scholarship and discounts given in earlier years 31.03.2021/2023 and concluded that for 31.03.2024 the amount spent is NIL and has not given any scholarship/concession to students. Further the Ld CIT(E) relied upon High Court of Madras in the case of Raja Sir Annamalai Chettiar Foundation vs CCIT 2020 116 Taxman.com 128, as per the facts of this case, in the deed there is no clause to for providing free education for children coming from different social and educational background and for providing scholarship to underprivileged children. Copy enclosed in page number However in the Appellant trust deed do have clause related to education to Below poverty line students and underprivileged. Ld CIT (E) Further relied on the SC case of New Noble Educational Society v. CCIT [2022) 143 taxmann.com 276 is also not applicable as the Appellant trust is registered with accredited body for education Printed from counselvise.com 10 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) M/s NIOS. The ld. AR further submitted that the assessee-trust is registered for recognition with Accredited Educational body, National Institute of Open Schooling (NIOS), the order of which was received on 26.11.2024 and pursuing the objectives of the assessee-trust to impart education under a systematic instruction, Schooling and training given to the Students. The syallbus are framed as per the National Council of Educational Research and Training [NCERT] after getting accreditation by NIOS. Further it was submitted that the assessee-trust has received donation and applied towards the objects for education and also applied for charity as evident from Financials of the assessee- trust for the period ending 31.03.2021, 31.03.2022 and 31.03.2023. The ld. CIT(E) was wrong in coming to the conclusion that the assessee-trust has not given by scholarship/concession to the students. 6. On the other hand, the ld. CIT-DR for the revenue supported the order of ld. CIT(E). 7. We have considered the rival submissions and it is found that though, the objectives of the assessee-trust has been claimed as to pursue “relief of the poor” and “education”, the activities being carried out by the assessee-trust failed to satisfy the conditions laid down by the Hon’ble Supreme Court in the case of Sole Trustee, LokaShikshana Trust v. CIT (supra) and in the case of New Noble Educational Society v. CCIT (supra). Accordingly, we find that the ld. CIT(E) was right in rejecting the application of the assessee-trust denying the registration of the assessee-trust under Section 12AB of the Act. We hold it accordingly. Printed from counselvise.com 11 ITA376 & 377/Chny/2025 M/s Agastya Gurukulam Public Charitable Trust Vs CIT(E) 8. In the result, this appeal of assessee is dismissed. 9. Now we take ITA No. 377/Chny/2025. In this appeal also, the assessee has raised identical grounds of appeal as raised in ITA No. 376/Chny/2025. The facts and arguments of this appeal are also similar to the facts and arguments as taken in ITA No. 376/Chny/2025. As we have dismissed the appeal of assessee in ITA No. 376/Chny/2025, therefore, considering the principles of consistency, this appeal of assessee is also dismissed with similar observation. 10. In the result, both these appeals of the assessee are dismissed. Order pronounced in the open court on 26/09/2025. Sd/- Sd/- (SS VISWANETHRA RAVI) (RATNESH NANDAN SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai, Dated: 26/09/2025 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR 5. Guard File By order Sr. Private Secretary, ITAT, Chennai Printed from counselvise.com "