Bombay High Court
Cit (Exemptions), Mumbai vs St.Joseph Technical School on 3 December, 2018
Bench: Akil Kureshi, M.S.Sanklecha
S.R.JOSHI itxa-593-2016.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO. 593 OF 2016
The Commissioner of Income Tax (Exemptions) .. Appellant.
v/s.
St. Joseph Technical School .. Respondent.
Mr. Ashok Kotangle with Ms. Padma Divakar, for the Appellant.
Mr. M. Subramanian i/b. V. S. Hadade, for the Respondent.
CORAM: AKIL KURESHI &
M.S.SANKLECHA, JJ.
DATE : 3rd DECEMBER, 2018.
P.C:-
The Revenue is in Appeal against the Judgment of Income Income Tax Appellate Tribunal (the Tribunal), raising following questions of law:-
"(a) Whether on the facts and in the circumstance of the case and in law, the Tribunal was right in holding that letting out of premises for Technical education to the trainees of Jet Airways, Tata Sky only and not to the public in general is a charitable activity and not a business activity?
(b) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that accumulation under Section 11(2) of the Act can be used as loan to other Trust of same objects without investing in modes specified in section 11(5) of the Act even though there is specific provision in section 13(1)(d) of the I.T. Act, 1961?"
2 Question (a) relates to the Revenue's objection to the activities of the Respondent-Trust. Revenue had argued that the Assessee 1 of 3 ::: Uploaded on - 06/12/2018 ::: Downloaded on - 28/12/2018 23:02:51 ::: S.R.JOSHI itxa-593-2016.odt had imparted training to the employees of the Tata Sky and Jet Airways and also let out its premises on rent, for such purpose. According to the Revenue, this activity was not in the sphere of imparting educational training. According to the Revenue, Assessee can be seem to have run coaching classes. Revenue, therefore, argued that these, were not charitable activities and the Trust was, therefore, not entitled to exemption under the Income Tax Act, 1961 (for short "the Act")'. The Tribunal, however, ruled in favour of the Assessee and allowed the Appeal. Tribunal observed that, Assessee had let out its property to Tata Sky for no other purpose then of giving technical training to its staff from which activities, the Assessee had earned income. The Assessee had also participated in the training programme. During the training, te staff and the trainee of the Jet Airways were allowed access to the play ground and other amenities available to the students. Similarly, in case of Tata Sky, the Assessee had participated in giving technical training with the specific clause under the Agreement that, the income would be used for the purposes of the activities of the trust. The Tribunal, therefore, observed that, as long as the Assessee had let out the property for efficient utilization of its assets and for other purposes of imparting technical training in the campus, Assessee can be said to be carrying on a charitable activity and its income, therefore, from such activity, would be exempt from tax.
3 Having heard the learned Counsel for the parties and after perusing the material on record, we do not find that the Tribunal has committed any error arising on the above conclusions.
4 As noted, the main object of the Trust is to impart education.
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S.R.JOSHI itxa-593-2016.odt
For better utilization of its infrastructure, Assessee allowed the training programme of Jet Airways and Tata Sky, to be conducted at its premises and in the process, also participated in imparting training. It cannot be stated that the Assessee had undertaken any activity in the nature of commercial venture. In somewhere similar back-ground, Division Bench of this Court in Income Tax Appeal No. 465 of 2012, in the Judgment dated 7th August, 2014 had dismissed the Revenue's Appeal, holding that Assessee, was engaged in imparting education in the area of pre-sea and post-sea training to seamen and was not carrying out activity in nature of running coaching class. The first question as proposed by the Revenue is, therefore, not entertained.
5 The second question pertains to Revenue's objection to the Assessee-Trust- advancing loan to some other Trusts, carrying on same charitable objects. Learned Counsel for the Assessee drew our attention to the Judgment of the Delhi High Court in Director of Income Tax (Exemptions) v/s. ACME Educational Society reported in 326 ITR 146 which was also relied upon by the Tribunal in the impugned judgment. The Delhi High Court in the said Judgment held that grant of interest free loan by the Assessee-Society, to another society for carrying on same activity, does not amounts either investment or deposit. Assessee would be entitled to exemption under the Act. This question, therefore, also is not required to be entertained.
6 Accordingly, Appeal is dismissed.
(M.S.SANKLECHA,J.) (AKIL KURESHI,J.)
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