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.
