Income Tax Appellate Tribunal - Chandigarh
Unique Educational Society, Ladwa vs Cit(E), Chandigarh on 6 August, 2019
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, "बी" च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH, 'B', CHANDIGARH
ी एन. के. सैनी, उपा य एवं ी संजय गग , या यक सद य
BEFORE SHRI N.K. SAINI, VICE PRE SIDENT &
SHRISANJAY GARG, JUDICIAL MEMBER
आयकरअपीलसं./ITA No. 1052/ C H D / 2 0 1 8
नधा रणवष / Assessment Year : 2 0 1 8 - 1 9
Unique Educational Society, Vs. The CIT (Exemption),
7, Hardev Nagar, बनाम Central Revenue Building,
Ladwa, 5 t h Floor, Sector 17-E
Distt. Yamunanagar Chandigarh
थायीले खासं . / PAN NO: AAAAU1842K
अपीलाथ$/ Appellant &'यथ$/ Respondent
नधा (रतीक*ओरसे/Assessee by : Shri Rohit Goyal , CA
राज वक*ओरसे/ Revenue by : Shri G.S. Phani Kishore, CIT DR
सन
ु वाईक*तार.ख/Date of Hearing : 30.07.2019
उदघोषणाक*तार.ख/Date of Pronouncement : 06.08.2019
आदे श/ Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the appellant society against the order dated 30.06.2018 of the Commissioner of Income Tax (Exemptions), Chandigarh [hereinafter referred to as 'CIT(E)'] agitating the action of the CIT(E) in rejecting the application of the appellant- society for registration u/s 12A of the Income Tax Act, 1961 (in short 'the Act'), as a 'charitable institution'.
ITA No. 1052-c-18 Unique Educational Society, Yamunanagar 2
2. A perusal of the impugned order of the CIT(E) reveals that the appellant society had applied for registration u/s 12A of the Act pleading that it has been running a private Industrial Training Institute, which is imparting vocational training to the students. That the institution has been duly recognized by the Government of Haryana and the same is affiliated and regulated by National Council for Vocation Training (in short 'NCVT'), Ministry of Skill Development and Entrepreneurship, Govt. of India. However, the Ld. CIT(E) rejected the application of the appellant society on three counts; firstly, mainly that gaining of the knowledge of skill do not qualify for label 'Education' in the sense in which the word 'Education' has been used in section 2(15) of the Act and as interpreted by the Hon'ble Supreme Court in the case of 'Sole Trustee Lok Sikshan Sansthan' 101 ITR 234, wherein, it has been held that the term 'Education' means a systematic instruction, schooling or training given to the young in preparation for the work of life and that it connotes the hole course of scholastic instruction which a person has received. The Ld. CIT(A) observed that the word 'Education' is not used in that wide and extended sense, according to which every acquisition of further knowledge constitutes 'Education'. That the assessee was indulged in activity of merely skill enhancement in which no systematic education was involved. He, therefore, held that the activity of the assessee ITA No. 1052-c-18 Unique Educational Society, Yamunanagar 3 would not fall in the definition of 'education' in the sense, the word 'education' has been used in section 2(15) of the Act.
Secondly, he observed that the appellant society was merely an implementing agency of the Government and was being reimbursed for its activities which cannot be held to be a charitable activity, rather, the assessee was doing such activity for commercial purposes. That the receipts of the assessee did not partake the character of voluntary donations and neither the same was income from the property vested in the trust for charitable purposes. The Ld. CIT(E) further observed that even the contribution towards corpus funds by the members of the society has not been corroborated with bank entries.
The Third objection raised by the Ld. CIT(E) is that the appellant society had purchased two cars which were meant for personal use of the members of the society and that such purchases did not enure to the benefit of general public and the utilization of funds to that extent was not for charitable purposes.
3. We have heard the rival contentions and have also gone through the record. So far as the first and foremost observation of the Ld. CIT(E) that the activity of the assessee would not fall within the scope of term 'Education' as used in section 2(15) of the Act is concerned, the Ld. Counsel for the appellant in this respect has invited our ITA No. 1052-c-18 Unique Educational Society, Yamunanagar 4 attention to page Nos. 52 & 53 of the paper book. Page No.52 is the copy of the letter dated 27.7.2012 of the Govt. of India, Ministry of Labour and Employment, Directorate General of Employment & Training issued under the signatures of Director(T) addressed to the State Directors / U.T. Administrators dealing with Craftsmen Training Scheme, whereby, it has been conveyed that the case of the appellant along with others was examined by the Members of the Sub-Committee for NCVT and that the Committee after examination approved the affiliation of the cases for conforming to the NCVT norms. The list of such institution has been mentioned, wherein, the name of the institution namely 'Mahatma Gandhi Private ITI, Distt. Yamunanagar run by appellant society is mentioned at Sr. No.1. Further, page No. 54 is the copy of the letter dated 10.8.2007 of the Industrial Training & Vocational Education Department, Govt. of Haryana, whereby, the Government has given approval to the appellant society for establishment of private Industrial Training Centre in the name and style of 'Mahatma Gandhi Industrial Training Centre' for running the trades with affiliation to State Council for Vocational Training (SCVT). The name of trade and the units approved are mentioned as under:-
S.No. Name of Trade Duration No. of Increase Total units.
units in units /
already units in
approved new
trade
1 Computer 1 year 1 1 2 (in two
operator shifts)
Programming
ITA No. 1052-c-18
Unique Educational Society, Yamunanagar
5
Assistant
2 Fitter 2 year 1 1 2 (in two
shifts)
3 Painter General 2 year 1 1 2 (in two
shifts)
4 Electrician 2 year 1 1 2 (in two
shifts)
4. Further, as per letter dated 23.12.2016 of the Ministry of Skill Development & Entrepreneurship, New Delhi, the appellant has been empaneled as Assessing Body under Modular Employable Skills. The Ld. Counsel for the assessee, therefore, has submitted that the appellant has been running the vocational training course in a systematic manner and is affiliated and regulated by NCVT as well as SCVT, Haryana. That the examinations are conducted on national level and Diploma equivalent to 10+2 degree is awarded by the NCVT.
That the courses run by the appellant being for promotion of skill development and training, class rooms teaching and trainings are designed for generation of employment opportunities for village youths and the same have been duly recognized by the state government as well as Central Government. We are convinced that the vocational educational / training programme run by the appellant society are systematic programme imparting class room as well training with focus on employment generation. The education given by the appellant, in our view, can safely be said to be in the mode of systematic instructions / schooling or training given to the young in preparation ITA No. 1052-c-18 Unique Educational Society, Yamunanagar 6 for the work of life and, in our view, duly fall within the purview and scope of the term 'Education' as used in section 2(15) of the Act.
5. So far as the observation of the CIT(E) that the income of the assessee is not from voluntary donation or that the same cannot be said to be income from property held under the trust is concerned, we are not convinced with the above observation of the Ld. CIT(E) for rejecting the claim of the appellant trust. The appellant trust is reimbursed the amount spent by the Government for carrying out its 'education / training programme as per the skill development programme of the Government. Thus, in our view, it can be safely said to be income generated from the activity of the appellant trust and the said activity as observed above, falls within the purview and scope of charitable purpose. It is not be case of the CIT(E) that the major or main activity of the appellant trust is towards commerce or business. The receipt of income, in our view, is in the course of carrying out of 'Educational activity' of the assessee.
6. The third objection raised by the Ld. CIT(E) is that the appellant could not corroborate the receipts towards the corpus funds from the members of the trust with bank entries. In our view, this cannot be ground for rejection of the application u/s 12A of the Act. The appellant has shown the receipts towards its corpus funds from the members of the trust and the same has been duly recorded in the books ITA No. 1052-c-18 Unique Educational Society, Yamunanagar 7 of account. It makes no difference if the receipts were received in cash or through banking channel. Moreover, whether the receipts are towards corpus funds or for application is to be seen at the time of assessment.
8. So far as the expenditure on two cars is concerned, the Ld. Counsel of the appellant has explained that the said cars are used by the society for its activities as the society members have to travel between Delhi and Chandigarh for meetings and review of its work done by the Central / State Government and further that the said expenditure is completely related to the activities and objects of the appellant society.
9. The Ld. DR has made a further argument that the appellant is also indulging in skill development programme under Pradhan Mantri Kaushal Vikas Yogna (PMKVY) and that this programme is a short duration programme and cannot be said to be a systematic education programme. May it be so, apart from providing the long term course of one year or two years as mentioned above, since the appellant society has skilled instructors for providing vocational training to the students and if the appellant institution has also been imparting training under the Pradhan Mantri Kaushal Vikas Yogna, that itself, cannot be sufficient to hold that the appellant society has done any activity in violation of its objects.
ITA No. 1052-c-18 Unique Educational Society, Yamunanagar 8
10. In view of the observations made above, the impugned order of the CIT(E) is set aside and the Ld. CIT(E) is further directed to grant registration to the appellant society u/s 12A read with section 12AA of the Act in accordance with the relevant provisions of the Act.
In the result, the appeal of appellant society stands allowed. Order pronounced in the Open Court on 06.08.2019.
Sd/- Sd/- (एन. के. सैनी / N.K. SAINI) (संजय गग! / SANJAY GARG) उपा#य$ /Vice President या%यकसद&य/ Judicial Member Dated : 06.08.2019 "आर.के."
आदे शक*& त3ल4पअ5े4षत/ Copy of the order forwarded to :
1. अपीलाथ$/ The Appellant
2. &'यथ$/ The Respondent
3. आयकरआयु6त/ CIT
4. आयकरआयु6त (अपील)/ The CIT(A)
5. 4वभागीय& त न8ध, आयकरअपील.यआ8धकरण, च:डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायकपंजीकार/ Assistant Registrar