Indian Kanoon - Search engine for Indian Law

5. The Ld. CIT(E) after going through the submissions held that the assessee is a Franchisor of Zee Learn Ltd. and the intellectual property rights is vested with the franchisor, the ZEE LEARN LIMITED and the applicant trust merely remains an agent to the franchisor company for promoting its business on commercial basis on the terms and conditions set by the franchisor company for its own benefit, being a commercial enterprise. He held that this fact totally negates the essence of charity and the applicant trust's claims of being charitable get impinged by the arrangement that caters to enhancing the receipts of the franchisor. Independence of the applicant to pursue activities, claimed to be charitable is severely impinged in light of the overarching control of the franchisor in practically aspects.

(a) It is expressly agreed by the parties that the Franchisee shall be responsible for collecting the annual fees from all Students, at the time of admission on behalf of the Franchisor. Such annual fees shall be determined by the Franchisor and may be amended from time to time at the Franchisors sole discretion.

(b) In addition to the above the Student shall also pay monthly tuition fees to the Franchisee before the commencement / completion of the course. The Franchisee shall charge and recover such fees from the Students for different levels of entry inclusive of such taxes as may be applicable from time to time. The Franchisee may be required to charge in addition to the tuition fees any other such charges as indicated by the Franchisor from time to time.

(b) Without limiting the Franchisor's right to terminate this Agreement pursuant to Clause 15, in the event that/any amount is not paid by the Franchisee to the Franchisor when due such amount will bear late payment interest calculated on a daily basis from the due date for payment at the rate of 24% (Twenty Four percent) per annum.

(c) The Franchisee shall collect fees from the Students for the relevant Programs in accordance with the prescribed fee schedule provided by the Franchisor from time to time. The Franchisee shall under no circumstances vary from the fee range as indicated by the Franchisor unless changes are approved by the Franchisor. The Franchisee is also not authorized to offer discounts to Students except as approved in writing by the Franchisor. In the event the Franchisee deviates from the quantum of fees as agreed upon by the Franchisor and the Franchisee, then the Franchisee shall be liable to pay such damages, penalties, losses, etc. to the Franchisee, as may be decided by the Franchisor.

(d) The Franchisee shall not offer any credit facilities to any Students.

(e) Notwithstanding the above, the Franchisor reserves the right to make amendments, alterations to the collection procedures and to the amounts mentioned in this Agreement, to be followed by the Franchisee from time to time, as situations demand and Franchisee shall execute the same, implement and co-

operate in implementing those changes. These may also include directions to collect the Programs fees in the name of the Franchisor and to deposit the same directly in the Franchisor's bank account or instruction received from them, if the Franchisor so desires at a later date for banking and operational convenience.