Charitable purpose: Education: Exemption u/s. 11 r/w. s. 2(15): A. Y. 2009-10: Assessee-association conducting various continuing education diploma and Certificate Programmes, Management Development Programmes, Public Talks, Seminars, Workshops and Conferences: Assessee’s activities would fall within realm of education which is ‘charitable’ as per section 2(15): Proviso is not applicable: Assessee is entitled to exemption u/s. 11:

The assessee, a public charitable trust, was dedicated to pursue the objects of continuing education, training and research on various facets of management and related areas. It claimed exemption u/s. 11 of the Income-tax Act, 1961 on ground that it undertook multifaceted activities comprising of conducting various continuing education diploma and certificate programmes, management development programmes, public talks, seminars, workshops and conferences which falls in the realm of “education” as the charitable purpose. For the A. Y. 2009- 10, the Assessing Officer observed that considering the nature of courses, its durations and resultant surplus from each activity, the activity of the assessee is not educational in nature. The Assessing Officer held that activities of assessee fell within scope of amendment of ‘advancement of any other object of general public utility and any other activity’ of section 2(15) and, since the aggregate value of receipts were more than Rs. 10 lakh, proviso to section 2(15) was applicable and the assessee was not entitled for exemption u/s. 11. The Tribunal had held that the activities of the assessee were in the field of education and, therefore, the assessee was eligible for exemption u/s. 11.

On appeal by the Revenue, the Gujarat High Court upheld the decision of the Tribunal and held as under:

“i) I t is required to be noted that all throughout for the previous years, right from the A. Y. 1995-96 till A. Y. 2008-09 the revenue has considered the activities of the assessee as educational activity and has granted the benefit u/s. 11.

ii) H owever, subsequently and w.e.f. A. Y. 2009-10, proviso to section 2(15) has been added and section 2(15) has been amended by the Finance Act, 2008 by adding the proviso which states that the ‘advancement of any other object of general public utility’ shall not be a charitable purpose if it involves the carrying on of (a) any activity in the nature of trade, commerce or business; or (b) any activity of rendering any service in relation to any trade, commerce or business for cess or fee or any other consideration, irrespective of the nature of use or application, or retention of the income from such activity. The revenue has denied the exemption claimed by the assessee u/s. 11 mainly relying upon the amended section 2(15) by submitting that the case of the assessee would fall under the fourth limb of the definition of ‘charitable purpose’ i.e., ‘advancement of any other object of general public utility’ and, therefore, the assessee shall not be entitled to exemption from tax u/s. 11.

iii) T he activities of the assessee such as continuing education diploma and certificate programme; management development programme; public talks and seminars and workshops and conferences etc., is educational activities and/or is in the field of education.

iv) O n fair reading of section 2(15) the newly inserted proviso to section 2(15) will not apply in respect of relief to the poor; education or medical relief. Thus, where the purpose of a trust or institution is relief of the poor; education or medical relief, it will constitute ‘charitable purpose’ even if it incidentally involves the carrying on of the commercial activities.

v) I n the present case, the activities of the assessee would fall within the definition of ‘charitable purpose’ as per section 2(15) and, therefore, would be entitled to exemption u/s. 11.”