Income Tax Appellate Tribunal - Delhi
Tci Institute Of Logistic, Gurgaon vs Cit(E), Chandigarh on 19 January, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'D' : NEW DELHI)
BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER
and
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No.5401/Del./2015
ITA No.5402/Del./2015
TCI Institute of Logistic, vs. CIT (E),
69, Institutional Area, Chandigarh.
Sector 32, Gurgaon.
(PAN : AAECT9627P)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri P.C. Yadav, Advocate
REVENUE BY : Shri Vijay Verma, CIT DR
Date of Hearing : 07.12.2017
Date of Order : 19.01.2018
ORDER
PER KULDIP SINGH, JUDICIAL MEMBER :
Since common questions of facts and law have been raised in both the aforesaid appeals, the same are being disposed of by way of consolidated order to avoid repetition of discussion.
2. The Appellant, TCI Institute of Logistic (hereinafter referred to as 'the assessee company') by filing the present appeals sought to set aside the impugned orders dated 29.05.2015 passed by the 2 ITA Nos.5401 & 5402/Del/2015 Commissioner of Income-tax (Exemptions), Chandigarh on the grounds inter alia that :-
"ITA No.5401/Del/2015
1. That the Ld. CIT (E) has erred in rejecting the application of the appellant to register the Trust u/s 12AA of the Income Tax Act.
2. That the Ld. CIT (E) has erred in rejecting the application of the appellant to register the Trust u/s 12AA of the Income Tax Act, despite the fact that objects are Charitable, within the definition of sub-section 15 of Section 2 of the Income Tax Act, 1961.
3. That the Ld. CIT (E) has erred in observing that the activities of the appellant are merely for promotion of transportation business and rejecting the application of the appellant to register the Trust u/s 12AA of the Income Tax act on this ground.ITA No.5402/Del/2015
1. That the Ld. CIT (E) has erred in rejecting the application of the appellant to register the Trust u/s 80G of the Income Tax Act.
2. That the Ld. CIT (E) has erred in rejecting the application of the appellant to register the Trust u/s 80G of the Income Tax Act, despite the fact that objects are Charitable, within the definition of sub-section 15 of Section 2 of the Income Tax Act, 1961.
3. That the Ld. CIT (E) has erred in observing that the activities of the appellant are merely for promotion of transportation business and rejecting the application of the appellant to register the Trust u/s 80G of the Income Tax act on this ground."
3. Briefly stated the facts necessary for adjudication of the controversy at hand are : the applications moved by the assessee company in Form No.10A and 10G for registration under section 12AA of the Income-tax Act, 1961 (for short 'the Act') and approval u/s 80G of the Act respectively have been rejected by the 3 ITA Nos.5401 & 5402/Del/2015 ld. CIT on the ground that the activities of the assessee company does not fall within the ambit of section 2(15) of the Act being merely into the promotion of transport business.
4. Feeling aggrieved, the assessee company has come up before the Tribunal by challenging the impugned order passed by ld. CIT by way of filing the present appeals.
5. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
6. It is not in dispute that the assessee company has got affiliation from National Skill Development Corporation (NSDC), a public private partnership in India under the Ministry of Skill Development and Entrepreneurship as on 30.03.2015, as its vocational training partner.
7. It is also not in dispute that the assessee company is registered u/s 25 of the Companies Act having been barred from distribution of profit amongst its members by way of dividends with following aims and objects :
"1. To initiate, carryout, execute, implement, aid and assist activities towards developing knowledge, skill expertise, competencies and capabilities for Logistics sector and in meeting the entire value chain's requirements of-appropriately trained manpower in quantity and quality on a sustained and evolving basis.4 ITA Nos.5401 & 5402/Del/2015
2. To establish / run schools, colleges, institutes, training centers, and such other agencies as may be required to promote competency building in logistics sector.
3. To design, develop & implement skill competency development plan for the Logistics Sector and maintain skill inventory.
4. To collaborate with other organizations, institutes, schools, colleges, universities, and centers to encourage / promote competency development & employability in Logistics Sector in India and abroad.
5. To determine skills / competency standards and qualifications in consonance with the Sector norms.
6. To establish a well- structured Logistics and supply Chain Sector specific labour market information system ("LMIS") to assist planning and delivery of training.
7. To facilitate in standardizing the affiliation and accreditation process for the Sector.
8. To coordinate participation of social partners, employers in the private sector, training providers, professional societies and NGOs/civil society groups in the process of skill development for the Sector.
9. To identify the skill development needs of the Sector, review international trends in Sector skill development and identify Sector skill gaps and technology.
10. To do and undertake the task of educational, vocational and professional skill upgrade for the Sector.
11. To facilitate in setting up a robust and stringent certification and accreditation process for the Sector to ensure consistency and acceptability of standards.
12. To promote research and development, development & deployment of technological solutions, improving efficiencies and innovation in Logistics and Supply Chain industry sector.
13. To collaborate with national and international partners suitably for furtherance of its objectives.
14. To provide consultancy to other educational institutes, universities, training centers, & such other organization which are into / willing to develop competencies for Logistics Sector.5 ITA Nos.5401 & 5402/Del/2015
15. No objects of the Company shall .carried out without obtaining prior permission of competent authority, whenever require or prescribed.
16. None of the objects of the company shall be carried out on a commercial basis."
8. Ld. CIT declined the registration u/s 12AA and approval u/s 80G to the assessee company on the sole ground that, "the activities of the assessee company does not fall within the ambit of section 2(15) of the Act i.e. charitable purpose" as the activities of the assessee company are merely in relation to promotion of transportation business.
9. Major aims and objects of the assessee company is to design, development and implement skill/competency development plan for logistic sector by establishing schools, colleges, institutes, training centers and such other agencies to promote competency building in logistics sectors. When we examine the aforesaid aims and objects of the assessee company pursued by the assessee company, it leads to the conclusion that it will certainly lead to creating of job opportunities in the logistic, warehouse and courier sectors to the unemployed youth of our country. Moreover, when we examine the aims and objects of the assessee company in the light of the fact that it is a company registered u/s 25 of the Companies Act, it again leads to the conclusion that the assessee 6 ITA Nos.5401 & 5402/Del/2015 company is established to bridge the skill gaps in the logistic industry in collaboration with NSDC.
10. No doubt, the mere registration of a company u/s 25 of the Companies Act, as contended by ld. DR, is not enough for registration u/s 12AA and 80G of the Act but the factum of the registration of the assessee company u/s 25 of the Companies Act has to be seen in the light of the aims and objects of the assessee company which are certainly lead to creating job opportunities by providing skill expertise and by promoting knowledge in the logistic sector.
11. Ld. DR for the Revenue further contended that since assessee company has been formed for conducting courses for TCI employees and trainee after getting training are to serve the TCI, the assessee company cannot be said to be formed for rendering services to the public at large. However, we are of the considered view that when skill training is given by the assessee company in logistics to the trainee though from TCI but without any binding agreement that they were to serve TCI for a specified period, the argument raised by the ld. DR is not sustainable. Training imparted to the trainee which would create job opportunities for the trainee with liberty to serve anywhere would certainly amount to rendering services to the public at large.
7 ITA Nos.5401 & 5402/Del/2015
12. When we examine the annual operational report of the assessee company for FY 2014-15, available at pages 14 to 17 of the paper book, and attendance roll of the trainee with class room photographs, available at pages 18 to 29 of the paper book, it is proved that the assessee company has been established to carry out the skill mission in collaboration with NSDC as per curriculum lay down by the NSDC. Annual operation report for FY 2014-15, available at pages 14 to 17, also shows that the assessee company is providing curriculum of 18 days each for Transportation and Supply Chain Solutions; Certificate in Warehouse Management; Certificate in Transport System & Management; Certificate in Ware House Management; Certificate in Transport System & Management; Certificate in Courier Management and Certificate in Courier Management etc.. The assessee company also placed on record certificate of partnership dated 30.03.2015 issued by NSDC certifying that the assessee company is an approved partner of NSDC for AYs 2014-15 & 2015016.
13. Hon'ble Delhi High Court in case cited as Institute of Chartered Accountant vs. DIT Exemption - 347 ITR 99 (Del.), after discussing the decision rendered by the Hon'ble Gujarat High Court in Gujarat State Co-operative Union vs. CIT - (1992) 195 ITR 279 (Guj.), held that "the word education does not confine to 8 ITA Nos.5401 & 5402/Del/2015 scholastic instructions but other forms of education are also included in the word education which means instructing or educating."
14. The ld. DR for the Revenue vide synopsis filed in this case brought to our notice Circular No.11/2008 DATED 19.12.2008 explaining the amendment in section 2(15) of the Act w.e.f. 01.04.2009 as under :-
"Section 2(15) of the Income Tax Act, 1961 defines "charitable purpose" to including the following :-
(i) Relief of the poor
(ii) Education
(iii) Medical relief, and
(iv) The advancement of any other object of
general public utility"
15. When we examine the aims and objects of the assessee company in the light of the aforesaid definition of charitable purpose imparting skill education in logistics, warehousing management and courier management, it would certainly lead to fulfilling the object of general public utility. Furthermore, by imparting skill development in logistics industry, warehouse and courier management, to be deployed in the logistics industry, would certainly serve the object of general public utility as driving vehicles by the untrained drivers on the roads are also leading to numerous road accidents in our country.9 ITA Nos.5401 & 5402/Del/2015
16. In view of what has been discussed above, we are of the considered view that assessee company registered u/s 25 of the Companies Act is carrying out its activities with specific aims and objects of imparting training in logistics, warehousing management and courier management for the benefit of the public at large being a public private partnership having affiliation of NSDC under the Ministry of Skill Development and Entrepreneurship as its vocational training partner and as such, is entitled to be registered u/s 12AA and consequent approval u/s 80G of the Act. So, the impugned orders passed by the CIT (Exemption), Chandigarh are not sustainable in the eyes of law, hence the ld. CIT is directed to grant registration u/s 12AA to the assessee company forthwith, with approval u/s 80G of the Act. Consequently, both the appeals filed by the assessee company are allowed.
Order pronounced in open court on this 19th day of January, 2018.
Sd/- sd/-
(R.K. PANDA) (KULDIP SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated the 19th day of January, 2018
TS
10 ITA Nos.5401 & 5402/Del/2015
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(E), Chandigarh.
5.CIT(ITAT), New Delhi.
AR, ITAT
NEW DELHI.