Deshpande Education Trust Vs ACIT (Karnataka High Court)
Karnataka High Court held that vocational training qualifies as education under section 2(15) of the Income Tax Act. Exemption under section 11 of the Income Tax Act allowed since surplus generated is used only for educational purposes. Accordingly, writ allowed.
Facts- The appellant is a registered trust u/s. 12AA of the Act engaged in the activity of running coaching classes and training programmes for skill development and vocational training to students by charging fees. The appellant filed the return of income for AYs 2011-12 and 2012-13 declaring nil income. The case of the appellant was selected for scrutiny. AO passed the assessment Order denying the exemption claimed by the appellant u/s. 11 of the Act. Further, AO passed the assessment Order for AY 2012-13 u/s. 143(3) of the Act on 14.11.2014 denying the exemption claimed by the appellant u/s. 11 of the Act.
CIT(A) and Tribunal dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that the appellant’s activity includes vocational training for the development of soft skills of underprivileged, poor and women to develop their skills in the area of science, arts, business and commerce by providing various programmes in order to make them employable. The activity that the appellant is indulged in includes systematic instructions or training which involves the process of teaching and learning various subjects. Moreover, in the subsequent AYs, the appellant has affiliated with Karnataka University, Dharwad and is offering Master of Social Entrepreneurship Course in exchange of fees. Hence, it cannot be stated that the activities offered by the appellant are not ‘education’ under Section 2(15) of the Act.
