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IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI
BEFORE S/SHRI P.M.JAGTAP (AM) AND VIVEK VARMA, (JM)
.. , ,
./I.T.A.No.2668/Mum/2012
( / Assessment Year: 2008-09)
Additional Director of / Samudra Institut e of Maritime
Income Tax (E) I(2), Vs. Studies Trust,
Room No.504, 5th Floor, 507, 5 t h floor,
Piramal Chambers, Parel, Sai Commercial Complex,
Mumbai-400012. BKS Devshi Marg, Govandi,
Mumbai-400088
. / . /PAN/GIR No. : AACTS9557L
( /Appellant) .. ( / Respondent)
/ Appellant by : Shri Girija Dayal
/Respondent by Shri S.A.Mukadam
/ Date of Hearing
: 6.5.2014
/Date of Pronouncement : 16 .5.2014
/ O R D E R
PER P.M.JAGTAP,AM:
This appeal is preferred by the Revenue against the order of ld. CIT(A)-
1, Mumbai, dated 7.3.2012 and in the solitary ground raised therein, the
Revenue has challenged the action of the ld. CIT(A) in holding that the assessee
is entitled to exemption u/s 11 of the Income Tax Act, 1961 (the Act).
2. The assessee in the present case is a charitable trust with its main object
being to impart post-sea and pre-seal training to all seamen. It has got post
sea training centre at Govandi, Mumbai and Pre-sea training centre at
Lonavala. It is duly registered u/s 12A of the Act. The return of income for
the year under consideration was filed by the assessee trust on 29.9.2008
declaring total income at NIL after claiming exemption u/s 11 of the Act. From
the relevant details furnished by the assessee in respect of courses conducted, it
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I.T.A.No. .2668/Mum/2012
was noted by the AO that there are two to categories of courses, one approved
and recognized by the Directorate General of Shipping and other category of
courses which were not approved and recognized by the Directorate General of
Shipping. According to the AO, the courses which were not approved and
recognized by the Directorate General of Shipping were conducted by the
assessee as private coaching classes and the same could not be treated as
having character of charitable purposes as provided under section 2(15). He
held that these courses were conducted by the assessee purely as a commercial
activity with only motive of earning profit. He therefore disallowed the benefit
of exemption claimed by the assessee u/s 11 of the Act and completed an
assessment u/s 143(3) vide order dated 21.12.2010 assessing the total income
of the assessee at Rs.38,13,726/-.
3. Against the order passed by the AO u/s 143(3) of the Act, the appeal was
preferred by the assessee before the ld. CIT(A) and after considering the
submissions made on behalf of the assessee and following the decision of the
Tribunal rendered in assessee's own case on similar issue for assessment year
2007-08 vide its order dated 30.11.2011 passed in ITA No.5760/Mum/2010 , the
ld. CIT(A) vide para 4 of his order allowed the claim of the assessee for
exemption u/s 11 of the Act by observing as under :
"4. The AO analyzed the courses actually conducted during the period
relevant to the Assessment Year 2007-08. From the various details
furnished by the assessee he noted that the assessee has made profit of
Rs.99,22,167/- on account of DG Shipping approved courses conducted at
Lonavala and made a profit of Rs.2,08,19,001/- on account of non
approved courses conducted at Govandi, Mumbai. The AO was of the
opinion that this is an indicator of the assessee's indulgence in the
commercial and profit making activities under the garb of Charitable
Institution. He, therefore, asked the assessee to explain as to why the
claim of the assessee for exemption u/s.11 of the I.T. Act should not be
rejected. Rejecting the various explanation offered by the assessee he
noted that the assessee is projecting the courses which are more
profitable and provide more earning to the assessee, rather than offering
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I.T.A.No. .2668/Mum/2012
education through recognized courses. The entire institution is being run
with a sole motive of earning profit. However, a feeble attempt has been
made by the assessee of giving the colour of charitable institution to the
Trust whose activities are not covered within the meaning of education as
contemplated u/s.2(15) of the I.T. Act. Relying on the decision of Hon'ble
Patna High Court in the case of Bihar Institute of Mining and Mine
Surveying Vs. CIT reported in 208 ITR 608 and the decision of the Hon'ble
Supreme Court in the case of Sole Trustee Loka Shikshana Trust vs. CIT
reported in 101 ITR 234, the decision in the case of Mazgaon Docks Ltd.
vs. CIT reported in 34 ITR 368 at 376 and various other decisions he held
that the activities of the assessee in connection with the conducting of
commercial courses are clearly business activities within the meaning of
sec.2(13) of the I.T. Act., since all the elements of business are present
in these courses. He accordingly rejected the claim of exemption u/s.11 of
the I.T. Act."
4. Aggrieved by the order of ld. CIT(A), the Revenue has preferred this
appeal before the Tribunal.
5. We have heard the arguments of both the sides and also perused the
relevant material on record. It is observed that the claim for the assessee for
exemption u/s 11 was disallowed by the AO in AY -2007-08 on the similar
ground and the order of the ld CIT(A) reversing the order of the AO and
allowing the claim of the assessee for exemption claim u/s 11 was upheld by
the Tribunal vide its order dated 30.11.2011 passed in ITA No.5760/Mum/2010
for the reasons given in para 9.6 which reads as under :
"9.6 We find the Delhi Bench of the Tribunal in the case of S.R.M
Foundation of India (supra) while deciding the issue u/s.10(22) of the I.T.
Act has held that there is no requirement prescribed u/s.10(22) that the
institution should be recognized by an University or State or Central
Government. The Tribunal in the said decision held 33 lessons of what is
termed as Science of Creative Intelligence (SCI) which are in the nature of
Yoga Classes as education. The Tribunal while deciding the issue has
considered the decision of the Hon'ble Supreme Court in the case of Sole
Trustee, Lok Shikshan Trust (supra). We find the various other decisions
relied on by the Ld. Counsel for the assessee also support its case. The
decision in the case of Bihar Institute of Mining and Mine Surveying
(supra) in our opinion is not applicable to the facts of the present case. In
that case it was coaching of students for particular examination, for which
it was held that coaching institution is not a charitable institution within
the meaning of section 2(15). However, in the instant case the assessee is
giving training in the area of Pre Sea and Post Sea to sea men. The
various other decisions relied on by the AO are also distinguishable and
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I.T.A.No. .2668/Mum/2012
not applicable to the facts of the present case. In our opinion, merely
because the courses are not approved by the DG Shipping or merely
because there is huge surplus in the non-approved courses than the
approved courses cannot be a ground for denial of exemption u/s.11 as
long as the Trust is imparting education as per the objects of the Trust. In
this view of the matter and in view of the detailed observations given by
the Ld. CIT(A) on this issue we do not find any infirmity in the same and
accordingly the same is upheld. The grounds raised by the Revenue are
accordingly dismissed."
6. As the issue involved in the year under consideration as well as all the
material facts relevant thereto are similar to that of assessment year 2007-08,
we respectfully following the decision of Co-ordinate Bench of this Tribunal
rendered for assessment year 2007-08 and uphold the order of the ld. CIT(A)
allowing the claim of the assessee for exemption u/s 11 of the Act.
7. In the result, appeal of the revenue is dismissed.
Order pronounced in the open court on 16 th May, 2014
16 th May, 2014
Sd sd
( /VIVEK VARMA) (.. / P.M.JAGTAP)
/ JUDICIAL MEMBER / ACCOUNTANT MEMBER
Mumbai:
on this 16 th day of May, 2014
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant /Applicant
2. / The Respondent.
3. () / The CIT(A)-
4. / CIT
5. , , /
DR, ITAT, Mumbai
6. / Guard file.
/ BY ORDER,
True copy
(Asstt. Registrar)
, /ITAT, Mumbai
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