CIT Vs Adharshila Shikshan Sangh (Chhattisgarh High Court)
Summary: The Chhattisgarh High Court dismissed the Revenue’s appeal challenging the Income Tax Appellate Tribunal, Raipur Bench order directing grant of approval to Adharshila Shikshan Sangh under Section 80G of the Income-tax Act, 1961. The assessee-society had applied for approval under Section 80G on 28.02.2014. The Commissioner of Income Tax, Raipur rejected the application on 25.08.2014 after considering the Society’s activities, including establishment of educational institutions, vocational and skill-development courses, receipt of fees, amounts received from Sikkim Manipal University and rental income. The Commissioner concluded that the Society was operating its institutes on commercial lines and could not be regarded as charitable. The Departmental report had similarly questioned whether the Society’s activities constituted charitable work. The Society, however, had existing registration under Section 12AA.
The ITAT allowed the Society’s appeal on 15.01.2019 and directed grant of approval under Section 80G. It relied upon the principle that where registration under Section 12AA had been granted after examination of the genuineness of the activities and that registration continued without being revoked or cancelled, rejection of Section 80G approval on the ground that the activities were not genuine was not justified. The Revenue challenged that conclusion before the High Court, contending, among other things, that vocational education provided for fees could not constitute “education” under Section 2(15), and that the ITAT had failed to properly address the grounds on which the CIT had refused approval.
