Institute of Marine Engineers (India) Vs ITO (ITAT Mumbai)
Marine Engineering Training Is Education: ITAT Restores Section 11 Exemption for Four Years
Summary: Mumbai ITAT held that the Institute of Marine Engineers (India), which provides education and training to seafarers under the guidance and regulation of the Director General of Shipping, was engaged in “education” within Section 2(15) and was eligible for exemption under Section 11. The Assessing Officer had treated the institute as a professional body engaged in advancement of general public utility and denied exemption by invoking the commercial activity proviso to Section 2(15). The Tribunal followed its earlier decision in the institute’s own case for AY 2009-10, where its objects and maritime training activities had been examined and held to constitute education. It noted that the Revenue had demonstrated no difference in the factual position for AYs 2013-14, 2016-17, 2017-18 and 2018-19. Consequently, the general public utility classification and the corresponding proviso to Section 2(15) could not apply. The Tribunal directed the Assessing Officer to modify the assessments and allow Section 11 exemption. It also condoned a 162-day delay in filing the four appeals after finding reasonable cause in the applications and supporting affidavits.
The dispute
Does an institution cease to impart education because it trains working seafarers rather than conducting conventional degree courses? That was the central question in The Institute of Marine Engineers (India) v. ITO. The Assessing Officer treated the institute as a professional body carrying on activities of general public utility and denied its Section 11 exemption on the ground that it earned fees from courses and seminars.
The Mumbai ITAT disagreed. Following its earlier decision in the institute’s own case, it held that the maritime training activities fell within education under Section 2(15). The Tribunal allowed the institute’s appeals for assessment years 2013–14, 2016–17, 2017–18 and 2018–19 and directed the Assessing Officer to modify the assessments accordingly.
What does the institute do?
The Institute of Marine Engineers (India) is a society registered under the Societies Registration Act and with the Charity Commissioner in Mumbai. It also held Section 12A registration and Section 80G approval. Its principal object was the development of marine engineering and the dissemination of knowledge in that field.
To pursue that object, it provided education and training to seafarers under the guidance and regulation of the Director General of Shipping. It received fees for conducting courses and organising seminars. The institute claimed exemption under Section 11 for the years in dispute on the basis that these activities were educational.
The Assessing Officer took a narrower view of “education”. He observed that the institute did not carry on ordinary schooling or award degrees. In his view, it functioned as a professional body providing support and services to its members. He therefore placed its activities under “advancement of any other object of general public utility” and applied the commercial activity proviso to Section 2(15) because the institute earned income from its activities. The Commissioner (Appeals) upheld the denial of Section 11 exemption.
Earlier decision in the institute’s own case
Before the ITAT, the institute pointed to a decision dated 17 December 2025 in its own case for assessment year 2009–10. In that year, the coordinate bench had examined its objects and activities and concluded that it existed for imparting maritime education. Seminars, workshops, research programmes and technical publications were found to advance that educational purpose.
The earlier order had also considered decisions concerning maritime training, including the Bombay High Court’s ruling in Samudra Institute of Maritime Studies Trust. The High Court had recognised that pre-sea and post-sea technical training for seamen could constitute education for the purpose of Section 11. The fact that training was vocational or directed at a specialised profession did not, by itself, turn it into a commercial service.
The institute further submitted that its Section 11 claim had been accepted by the first appellate authority for assessment year 2014–15. The Departmental Representative acknowledged the favourable ITAT decision for 2009–10 but maintained that the institute’s activities belonged under general public utility.
Why the ITAT allowed the appeals
The Tribunal identified the decisive issue as the nature of the institute’s activities: were they education, or advancement of general public utility? Its coordinate bench had already examined that issue in the institute’s own case and found that the trust existed solely to impart education. The Revenue pointed to no difference in the relevant facts for the four years now under appeal.
Following that decision, the ITAT rejected the Department’s general public utility classification. Consequently, the commercial activity proviso applicable to that limb of Section 2(15) could not be used to deny the institute’s claim. The Tribunal held it eligible for exemption under Section 11 and directed the Assessing Officer to amend the assessment orders while giving effect to its ruling.
The four appeals had reached the Tribunal 162 days late. Applications supported by affidavits explained the delay, which the Tribunal found to be due to reasonable cause. It condoned the delay and decided the appeals on merits.
Author’s comments
The decision is significant for institutions providing structured professional and technical training. The absence of a conventional school programme or degree does not settle whether an activity is “education”. Here, the institute’s objects and its training of seafarers, under the regulatory framework of the Director General of Shipping, were central to the Tribunal’s conclusion.
The classification under Section 2(15) also mattered. Once the institute’s activities were held to be education, the Assessing Officer’s reliance on the proviso concerning commercial receipts from general public utility could not sustain the denial of exemption. The receipt of course and seminar fees did not change the character of the activities on the facts already examined in the institute’s earlier appeal.
This order relies strongly on the earlier finding in the same assessee’s case and the absence of any relevant factual change. It does not mean that Section 12A registration or 80G approval alone guarantees a Section 11 exemption in every assessment year. The objects, actual activities and applicable conditions must still support the claim. For this institute and these four years, however, the Tribunal found that the Department had no basis to depart from the established finding that it imparted education.
Cases Discussed/Relied Upon
1. Institute of Marine Engineers India Vs ITO, ITA No. 5666/Mum/2025, AY 2009-10, order dated 17.12.2025 — Followed; coordinate bench had held that the assessee was an educational institution imparting education to seafarers and was entitled to Section 11 exemption.
2. Maritime Training & Research Foundation v. DDIT(E)-1(1), ITA No. 7247/Mum/2012, AY 2009-10, order dated 22.08.2016 — Relied upon in the earlier order for treating maritime training as education.
3. DIT (Exemptions) v. Samudra Institute of Maritime Studies Trust, IT Appeal No. 465 of 2012, Bombay High Court, order dated 07.08.2014 — Relied upon for holding that pre-sea and post-sea maritime training constitutes education and can qualify for Section 11 exemption.
4. DIT (Exemptions) v. National Safety Council [2008] 305 ITR 257 (Bom) — Referred to in the Bombay High Court decision reproduced in the earlier ITAT order.
5. Queen’s Educational Society — Relied upon in the earlier coordinate-bench order on the principle that generation of surplus does not by itself make educational activities commercial where the surplus is applied towards educational objects.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Captioned appeals by the same assessee arise out of separate orders of National Faceless Appeal Centre (NFAC), Delhi, pertaining to Assessment Years 2013-14, 2016-17, 2017-18, and 2018-19.
2. These appeals had been filed with delay of 162 days. Seeking condonation of delay, the assessee has filed applications supported by an affidavits.
3. Upon going through the contents and averments made in the affidavit, we are satisfied that the delay in filing the appeals was due to reasonable cause. Hence, we condone the delay and admit the appeals for adjudication on merits.
4. Since the appeals involve a common issue, they have been clubbed together and disposed of by way of a consolidated order, for the sake of convenience.
5. The solitary grievance of the assessee in these appeals relates to denial claim of exemption under Section 11 of the Income Tax Act, 1961 (in short “the Act”).
6. Briefly the facts are, the assessee is a society registered under the Societies Registration Act. It is also registered with the Charity Commissioner, Mumbai, under Bombay Public Trust Act. Even the Commissioner of Income Tax, being satisfied with the charitable objects of the assessee, has granted registration under Section 12A and approval under Section 80G of the Act to the assessee.
7. Be that as it may, the main object of the assessee is to provide Scientific Development and Marine Engineering in all its branches, and disseminate such knowledge. In this regard, the assessee imparts education and training to seafarers under the guidance and regulation of the Director General of Shipping, Ministry of Surface Transport, Government of India. In course of imparting such education and training, the assessee has received fees for conducting courses for seafarers organizing seminars, etc. Claiming itself to be an educational institution, the assessee has claimed exemption under Section 11 in respect of the receipts. Accordingly, the assessee, for the aforesaid assessment years under dispute filed returns of income claiming exemption from taxation. While examining assessee’s claim of exemption under Section 11 of the Act, the Assessing Officer, on examination, found that the activities carried on by the assessee are not for imparting education, as claimed by the assessee. He observed that the assessee does not carry out normal activities of schooling leading to award of any degree. He observed that the assessee is a professional body which provides support and services to its members. Hence, activities carried on by the assessee are in the nature of objects of general public utility. Thereafter, referring to the proviso under Section 2(15) of the Act, the Assessing Officer held that since the assessee is earning income from commercial activities, it cannot be recognized as an institution having charitable objects in terms of Section 2(15) of the Act. Accordingly, he rejected assessee’s claim of exemption under Section 11 of the Act in all the assessment years in dispute. The decision so taken by the Assessing Officer was confirmed by the First Appellate Authority while deciding assessee’s appeals. Being aggrieved, the assessee is before us.
8. Learned counsel appearing for the assessee, at the very outset, submitted that the issue is squarely covered in favour of the assessee, as, while dealing with identical nature of dispute in assessee’s case in Assessment Year 2009-10, the Tribunal, after thoroughly examining the objects of the assessee and the nature of activities carried on, has held that since the assessee is an educational institution imparting education to seafarers, it is entitled to claim exemption under Section 11 of the Act. In this context, he drew our attention to the order passed by the Tribunal in ITA No. 5666/Mum/2025 17.12.2025, for Assessment Year 2009-10. Proceeding further, he submitted that even the First Appellate Authority, while dealing with similar dispute in assessee’s case in Assessment Year 2014-15, has allowed claim of exemption under Section 11 of the Act. Thus, he submitted, assessee’s claim of exemption under Section 11 of the Act should be allowed.
9. The learned Departmental Representative (DR), though agreed that in Assessment Year 2009-10, the ITAT has decided the issue in favour of the assessee, however, strongly relying upon the observations of the Departmental Authorities, he submitted that the assessee, in reality, is not imparting education. Therefore, its activities would fall within the ambit of objects of general public utility. Hence, the proviso under Section 2(15) of the Act would apply.
10. We have considered rival submissions and perused the materials on record. The moot question, in our view, is with regard to nature of activities carried on by the assessee, whether it imparts education or its objects are for general public utility. While considering this particular aspect in the assessee’s case for Assessment Year 2009-10, in order referred to above, the Coordinate Bench has held as under:
“11. We have heard the rival submissions and perused the material available on record. We note that the original assessment was completed under section 143(3) of the Act and, thereafter, the assessment order was set aside with directions to the Ld. AO for fresh verification of the requisite documents, particularly with regard to the approval granted by the DG(S) for the courses conducted and other aspects forming part of the assessee’s educational activities. On appreciation of the material on record, we find that the assessee is not a society with composite The Institute of Marine Engineers India or minimal objects. As per its Memorandum of Association, the primary objects of the assessee are the promotion and development of marine engineering education and training, in close coordination with the DG(S) and maritime academic bodies. All incidental activities, including seminars, research programmes, workshops, and technical publications, directly facilitate and advance the educational objects of the assessee. Accordingly, the requirement of the institution existing “solely for educational purposes” stands fully satisfied. We further observe that there are no independent or unrelated objects or activities. The activities undertaken by the assessee, such as technical publications, seminars, research, and training programmes, are incidental to education and form an integral continuum of professional maritime training. The subscriptions, donations, and income earned from events such as the WMPC conference are duly reflected in the assessee’s balance sheet and have been entirely utilised for educational purposes. Therefore, following the ratio laid down by the Hon’ble Supreme Court in Queen’s Educational Society (supra), the mere generation of surplus does not render the assessee’s activities commercial in nature, so long as the surplus is applied towards educational objects. We also find that the issue is no longer res integra, having already been considered and decided by the coordinate Bench of the ITAT, Mumbai in the case of Maritime Training & Research Foundation v. DDIT(E)-1(1) in ITA No. 7247/Mum/2012 for A.Y. 2009-10, vide order dated 22.08.2016. The relevant extract of the said order, appearing at pages 5 to 7, is reproduced hereunder:-
“7. We have carefully considered the submissions of the parties, perused the material placed before us including the orders of authorities below and case laws relied upon by the parties. We find that the assessee was denied exemption under section 11 of the Act on the ground that the assessee was engaged in imparting training to cadets and not education within the meaning of section 2(15) of the Act The Institute of Marine Engineers India and motive of the assessee was earning profit from the said activities. We find that the similar issue has been considered by the Hon’ble Jurisdictional High Court in the case of Samudra Institute of Maritime Studies Trust,(supra)/ The operative part of the said judgment is reproduced below :
“3. We have perused the orders passed by the authorities including the Tribunal. We have also perused the two decisions, one of the Hon’ble Supreme Court and relied upon by both the counsel and equally a short judgment of the Division Bench of this Court in the case of DIT (Exemptions) v. National Safety Council [2008] 305 ITR 257 (Bom). We are of the opinion that the Tribunal has applied the correct test in concluding that the exemption under section 11 can be availed of by the Respondent – Assessee. In doing so, the Tribunal referred to the objects as set out in the Trust Deed of the Respondent – Assessee. They are to set up, administer and maintain technical training institution at various places in India for pre-sea and post-sea training for the ships and maritime industry as a Public Charitable Institute for education. That is to provide on-board and offshore training and continuing technical education for Officers, both on the deck and engine side. One of the object was to register with the Director General of Shipping and obtain other necessary approvals at the State and Central levels. We do not find that the ratio of the judgment of the Hon’ble Supreme Court or of this Court, which may be dealing with section 10(22), has been applied to such an extent as complained by Mr Malhotra. In the present case, the Tribunal in paragraph 9.6 of the impugned order concludes that the Assessee is giving training in the above area to seamen. All thecourses may not be approved by the Director General of Shipping but that by itself is no ground to hold that the purpose is not charitable. The exemption under section 11 can be claimed and bearing in mind the object of the Trust. We are of the opinion that the Tribunal and the CIT (Appeals) have approached the issue correctly and in the light of the definition so also the tests laid down came to a factual conclusion that the Respondent is entitled to exemption under section 11 of the Act. This is not a case where the purpose can be said to run a coaching class or a centre. This is an institution which imparts education in the area of pre-sea and post-sea training to seamen so as to prepare them for all duties. In such circumstances, we do not find that the concurrent findings of fact are vitiated by error of law apparent on the face of the record or perversity enabling us to entertain this Appeal. There is no substantial question of law. The Appeal is therefore dismissed with no order as to costs.”
8. On perusal of the above judgement it is revealed that the assessee trust was set up to administer and maintain technical training institution at various places in India for pre-sea and post-sea training for the ships and maritime industry and was engaged to provide on-board and offshore training and also seems to be education and accordingly, held that there is no substantial question of law and dismissed the appeal of the revenue. We find that the case of assessee is squarely covered by the ratio laid down by the jurisdictional High Court in the case of Samudra Institute of Maritime Studies Trust,(supra). Respectfully following the above mentioned judgment of Hon’ble High Court we set aside the order of the ld.CIT(A) and direct the AO to allow the benefit an enumerated under section 11 of the Act by deleting the addition
9. In the result, the appeal of the assessee is allowed.”
12. In view of the foregoing discussion, and respectfully following the binding judicial precedents, including the decision of the coordinate Bench of the ITAT, Mumbai in Maritime Training & Research Foundation (supra), as well as the judgment of the Hon’ble Jurisdictional High Court in Samudra Institute of Maritime Studies Trust (IT Appeal No. 465 of 2012 order dated 07/08/2014), we hold that the assessee is an educational institution existing solely for educational purposes within the meaning of section 2(15) of the Act. The activities carried on by the assessee are integrally connected with and incidental to imparting structured maritime education and training duly approved and regulated by the Director General of Shipping, Government of India. The mere generation of surplus, which has been wholly applied towards educational objects, does not render the assessee’s activities commercial in nature. We further find that the Ld. AO failed to comply with the specific directions issued by the Tribunal in the earlier round of litigation and that the Ld. CIT(A) erred in upholding the impugned assessment order without properly appreciating the factual matrix, evidences on record, and the applicable judicial principles. Accordingly, the impugned order passed by the Ld. CIT(A) is set aside, and the Ld. AO is directed to allow the assessee’s claim of exemption under section 11 of the Act. So, the appeal filed by the assessee is allowed.”
11. As could be seen from the observations of the Coordinate Bench, it had clearly and categorically held that the assessee Trust is existing solely for the purpose of imparting education. Thus, Department’s objection that the objects of the assessee are for general public utility cannot be accepted. That being the case, proviso under Section 2(15) of the Act will not be applicable to the assessee. Notably, while deciding a dispute of identical nature in assessee’s case for Assessment Year 2014-15, the First Appellate Authority has held that the assessee is engaged in imparting education, hence, eligible to claim exemption under Section 11 of the Act.
12. There being no difference in the factual position relating to the issue in dispute in the impugned assessment years. Respectfully following the decision of the Coordinate Bench in assessee’s case (supra), we hold that the assessee is eligible to claim exemption under Section 11 of the Act. The Assessing Officer is directed to modify the assessment orders accordingly while giving effect to our directions.
13. In the result, appeals are allowed.
Order pronounced in the open court on 25/09/2026.
