CIT Vs Niit Foundation (Delhi High Court)
Delhi High Court held that affiliation with and recognition by a regulatory authority are not essential attributes of education under Section 2(15) of the Income Tax Act. NIIT Foundation engaged in conducting systematic and formal instruction, schooling or training qualifies u/s. 2(15).
Facts- The respondent/assessee is a society registered under the Societies Registration Act, 1860 and also holds a registration u/s. 12A of the Income Tax Act. It was also accorded recognition u/s. 80G(5) of the Act. In A.Y. 2014-2015, the assessee filed its return declaring its taxable income to be ‘Nil’. The return was selected for scrutiny assessment. AO accepted the return u/s. 143(3).
Revisionary proceedings were initiated by CIT(E) in exercise of power conferred by section 263. CIT(E) doubted that the respondent was engaged in the activity of imparting education as explained by the Supreme Court in its judgment in Lok Shikshana Trust vs. CIT and consequently that its activities were liable to be placed in the residual category of General Public Utility as contemplated u/s. 2(15).
Aggrieved by the order, the assessee approach the Tribunal where the appeal was allowed. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the Tribunal, in our considered opinion, correctly found in favour of the assessee when it held that affiliation with and recognition by a regulatory authority are not essential attributes of education under Section 2(15). This clearly flows from the principles enunciated by the Supreme Court in both Lok Shikshana Trust and New Noble Educational Society. This, of course, was in addition to it having been duly established that the centers of the respondent/assessee had been duly approved by the NSDC, which undoubtedly is a nodal agency concerned with vocational and technical training. We ultimately bear in mind the precept formulated by the Supreme Court in Lok Shikshana Trust and where it explained Section 2 (15) as being concerned with training and developing knowledge, skill, mind and character by formal schooling. These tests, in our considered opinion, were clearly met by the assessee.
