Mudra Foundation for Communications Research & Education v. Chief CIT

INCOME TAX ACT, 1961

--Exemption under section 10(23C)(vi)--Educational institutionApplicability of proviso to section 2(15)--The assessee was a society registered under the Societies Registration Act, 1860 as well as under the provisions of the Bombay Public Trusts Act, 1950. It was the case of the assessee that the institution was engaged in imparting higher and specialised education. It was specialised in imparting education in the field of communication including advertising and its related subjects. The assessee had also been granted the registration under section 12A. The assessee submitted an application for getting an exemption certificate under section 10(23C)(vi) for the assessment year 2013-14 and onwards. The CIT refused to issue the certificate under section 10(23C)(vi) on various grounds. Hence, this petition. The AR would submit that the assessee was established solely with the purpose of providing training in communication including advertisement and related subjects for the persons from industry, institutions as well as individuals so as to equip them thoroughly to practice the art and profession of communication in which they had been trained. He would further submit that the assessee, educational institution, was existing solely for the educational purposes and not for the purpose of profit. Held: It was an admitted position that a certificate under section 12A had already been issued in favour of the petitioner and the same had continued till date. Therefore, it was established that the petitioner-institution was a charitable trust as far as applicability of the IT Act is concerned. Education does not mean teaching the students only, in the manner and method, the regular schools or colleges adopt to teach. In the progressive world, it is expected from certain institutions that they educate, teach and train persons so that those persons can compete similar experts worldwide. Therefore, court was not in agreement with the submissions made by revenue that the sole object of the institution is not to impart education. By providing latest information and thereafter training to those persons who are already in the field of advertising communication, etc., and in such process if certain persons become super-specialists in particular field and for which the institution is charging fee, the case would not fall under proviso to section 2(15). The assessee institution is established for the sole purpose of imparting education in a specialised field. Hence, the petition was allowed. Order passed by the Chief CIT, vide which he refused to issue exemption certificate under section 10(23C)(vi) in favour of the petitioner, had been set aside.

Income Tax Act, 1961, Section 10(23C)(vi)

Income Tax Act, 1961, Section 2(15), proviso

Constitution of India, 1950, Articles 19(1)(g) & 226

Relied:Queen's Educational Society v. CIt (2015) 231 Taxman 286 (SC), Aditanar Educational Institution v. Addl. CIT (1997) 224 ITR 310 (SC), American Hotel & Lodging Assn. Educational Institute v. CBDT (2003) 301 ITR 86 (SC) and Pine Grove International Charitable Trust v. UOI (2010) 327 ITR 73 (P&H).

REFERRED : DIT (Exemption) v. Ahmedabad Management Association (2014) 366 ITR 85 (Guj).

FAVOUR : In assessee/petitioenr's favour.

A.Y. : 2013-14

IN THE GUJARAT HIGH COURT

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