| The Tax Publishers2019 TaxPub(DT) 5578 (Bang-Trib) INCOME TAX ACT, 1961
Sections 10(23C)
Though it was not clear as to whether the assessee itself had conducted training or not, yet the vocational training given by the assessee, if any, and the franchisees could fall under the category of “Coaching institutesâ€, that were excluded from the meaning of “education” as provided in section 2(15). Hence, assessee's claim that it was running an “educational institution” within the meaning of section 10(23C) was rejected and exemption under section 10(23C)(iiiab) and (iiiad) was rightly denied by revenue.
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Exemption under sections 10(23C)(iiiab) & (iiiad) - Educational institution - Assessee-contractor appointed by Government to implement its scheme of conducting vocational training courses - Whether educational institution or not
Assessee was running an educational institution and was substantially financed by the Government. Accordingly, assessee submitted that it was eligible for exemption under section 10(23C)(iiiab) and (iiiad). Revenue contended that as assessee had appointed franchisees to conduct short-term vocational activities on sub-contract basis, it could not be considered to be running an “educational institutionâ€. Assessee was only a contractor appointed by Government of Karnataka to implement its scheme of conducting vocational training courses. Revenue further contended that the “educational institution” referred to in section 10(23C) should be one imparting 'education' as defined in section 2(15). Held: Though it was not clear as to whether the assessee itself had conducted training or not, yet the vocational training given by the assessee, if any, and the franchisees could fall under the category of “Coaching institutesâ€. Since the Coaching institutes did not provide normal schooling and systematic instruction and education, they were excluded from the meaning of “education” as provided in section 2(15). Hence, assessee's claim that it was running an “educational institution” within the meaning of section 10(23C) was rejected and exemption under section 10(23C)(iiiab) and (iiiad) was rightly denied by revenue.
Relied:Sole Trustee, Loka Shikshana Trust v. CIT (1975) 101 ITR 234 (SC) : 1975 TaxPub(DT) 0344 (SC)
REFERRED : CIT v. Andhra Chamber of Commerce (1965) 55 ITR 722 (SC) : 1965 TaxPub(DT) 0190 (SC),Mudra Foundation for Communications Research & Education v. CIT (2016) 237 Taxman 139 (Guj) : 2016 TaxPub(DT) 0114 (Guj-HC),Saurashtra Education Foundation v. CIT (2005) 273 ITR 139 (Guj) : 2005 TaxPub(DT) 0156 (Guj-HC),Bihar Institute of Mining and Mine Surveying v. CIT (1994) 208 ITR 608 (Pat) : 1994 TaxPub(DT) 0865 (Pat-HC),CIT v. Sole Trustee, Loka Shikshana Trust (1970) 77 ITR 61 (Mys) : 1970 TaxPub(DT) 0315 (Mys-HC)
FAVOUR : Against the assessee
A.Y. : 2005-06 & 2006-07
INCOME TAX ACT, 1961
Section 40(a)(ia)
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