Deshpande Educational Trust Vs DCIT (Exemptions) (ITAT Bangalore)
Skill Development = “Education” – ITAT Allows Sec 11 Exemption to Charitable Trust
In the ITAT Bangalore allowed exemption under Sections 11 & 12 to a charitable trust engaged in skill development and vocational training, holding that such activities qualify as “education” under Section 2(15).
The assessee trust conducted training programs aimed at empowering rural and semi-urban youth. The Assessing Officer denied exemption, treating the activities as commercial in nature and falling under “general public utility,” mainly because fees were charged and service tax was paid. This view was upheld by the CIT(A).
However, the Tribunal noted that the trust was providing systematic instruction and structured training, including degree-linked programs (e.g., affiliation with Karnataka University), vocational courses, and rural empowerment initiatives. It emphasized that education is not restricted to formal schooling but includes organized training and skill development.
Crucially, the Tribunal relied on the Karnataka High Court ruling in assessee’s own case, which had already settled that such activities constitute education and are eligible for exemption.
Accordingly, the ITAT:
- Held that activities fall under “education” and not business/commercial activity
- Rejected the AO’s reliance on service tax and fee collection as indicators of profit motive
- Directed grant of exemption under Sections 11 & 12
FULL TEXT OF THE ORDER OF ITAT BANGALORE
