Case Law Details
J.K. Council for Social Welfare And Information Technology Vs CIT (Exemption) (ITAT Amritsar)
Brief fact of the case is that the assessee-society had submitted an application for registration u/s 12A of the Act. The primary object of the assessee is that running and maintaining institutions in rural area, and enhance the poor marginalised youth to promote evening school, employable skill to the privileged class of people. But the application for registration was rejected by the ld. CIT(E).
In the order, the assessee has taken the registration in MSME in Government of India and the work was to develop the skill to the specific people. The revenue has relied on the order the Hon’ble Apex court in the case of Sole Trustee Lok Shikshana Trust vs. CIT’, 101 ITR 234 (SC). The observation of the ld. CIT(E) is that the activity of the assessee is not coming under the purview section 2(15) relied to education under the charitable activities. During the hearing before the ld. CIT(E), the assessee had filed different submission. But only the development of the skill is not the purpose to fulfilling to section 2(15) to ascertain the objects of the assessee. We find no infirmity in the order of the ld. CIT(E). Accordingly, the appeal of the assessee is dismissed.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
The instant appeal of the assessee-society is directed against the order of the ld. Commissioner of Income Tax(Exemptions), Chandigarh, [in brevity the CIT(E)] bearing DIN& Order No. ITBA/EXM/S/EXM 1/2021-22/1031049811(1), date of order 26.02.2021, the order passed u/s 12AA (1)(b) (iii) of the Income Tax Act, 1961, [in brevity the Act] for A.Y. 2021-22.The assessee has taken the following ground which are extracted as below:
“1. The Ld. CIT (Exemption) is unjustified, illegal and wrong for passing the order u/s 12AA(1)(b)(ii) of the Income Tax Act for rejection of Application to grant registration of Society u/s 12.AA of Income tax Act, 1961.
2. The society claimed its objects which include providing education by running and maintaining institutions in rural areas and many like-wise objects which directly fall under the ambit of Section 2(15) under the limb education. This object has been disapproved by the Lr. AO as he has considered it not to directly imply as education and has quoted the Judgement of Sole Trustee, Lok Shikshana Trust v. Commissioner of Income-tax [1975] 101 ITR 234 (SC).However in this case, emphasis has been laid on systematic education which is clearly an object of the Trust as the Trust intends to open new primary schools/institutions to impart education.”
2. The assessee has request for condonation of delay of 01 day. The delay of 01 day is condoned with the consent of ld. CIT. DR.
3. Brief fact of the case is that the assessee-society had submitted an application for registration u/s 12A of the Act. The primary object of the assessee is that running and maintaining institutions in rural area, and enhance the poor marginalised youth to promote evening school, employable skill to the privileged class of people. But the application for registration was rejected by the ld. CIT(E).
4. Being aggrieved assessee filed an appeal before us.
5. During hearing, none was present on behalf of the assessee. The matter was taken up with the consent of the ld. CIT DR for adjudication.
6. We consider the order of the ld. CIT(E) and the submission of the revenue. The ld. CIT-DR relied on the order of the ld. CIT(E) reason for rejection of registration. The relevant paragraph of order of CIT(E) is extracted as below:
“8.1 The sense in which the word “education” has been used in section 2(15) as interpreted by the Apex Court in the case of Sole trustee, Lok Sikshan Sansthan (101 ITR 234) is systematic instruction, schooling or training given to the young in preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word “education” has not been used in that wide and extended sense, according to which every acquisition of further knowledge constitutes education. The apex court has categorically mentioned that education as per Section 2(15) of the Income tax is for normal schooling.
8.2 The objects in the case of the applicant are based merely on skill enhancement and no systematic education is involved. The aims’ of the applicant trust are to promote skill development among youth, school children in order to be eligible for suitable employment opportunities. The applicant Trust does not undertake the whole course of scholastic instructions which is a prerequisite to be eligible as a charitable institution for education within the ambit of Section 2(15) of the Income Tax Act.
9. In light of the above discussion, the activities of the applicant Trust are not considered to be charitable in nature therefore; application for grant of registration u/s 12AA is rejected.”
6.1 In the order, the assessee has taken the registration in MSME in Government of India and the work was to develop the skill to the specific people. The revenue has relied on the order the Hon’ble Apex court in the case of Sole Trustee Lok Shikshana Trust vs. CIT’, 101 ITR 234 (SC). The observation of the ld. CIT(E) is that the activity of the assessee is not coming under the purview section 2(15) relied to education under the charitable activities. During the hearing before the ld. CIT(E), the assessee had filed different submission. But only the development of the skill is not the purpose to fulfilling to section 2(15) to ascertain the objects of the assessee. We find no infirmity in the order of the ld. CIT(E). Accordingly, the appeal of the assessee is dismissed.
7. In the result, the appeal of the assessee bearing ITA No. 22/Asr/2021 is dismissed.
Order pronounced in the open court on 17.11.2022
