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Deputy Commissioner of Vs. Prajapita Brahma Kumaris - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Jaipur
Decided On
Reported in(1999)71ITD169(JP.)
AppellantDeputy Commissioner of
RespondentPrajapita Brahma Kumaris
Excerpt:
per shri r.k. gupta, 1m. - these are four appeals by the department and four cross objections by the assessee against the order of commissioner (appeals) dated 21-9-1995. the appeals relate to assessment years 1988-89 to 1991-92. the assessments were completed under section 143(3)/147 of the income tax act on 29-3-1995. the assessments were completed for all the four years separately.as the facts are similar in all the four years, therefore, the assessments were completed on the same day. the assessee claimed exemption under section 10(22) of the income tax act and shown taxable income at nil. these returns were filed in response to notice under section 148 which was issued on 13-10-1992 and served on assessee on 19-10-1992. the assessee was required to file the details in regard to the.....
Judgment:
Per Shri R.K. Gupta, 1M. - These are four appeals by the department and four cross objections by the assessee against the order of Commissioner (Appeals) dated 21-9-1995. The appeals relate to assessment years 1988-89 to 1991-92. The assessments were completed under section 143(3)/147 of the Income Tax Act on 29-3-1995. The assessments were completed for all the four years separately.

As the facts are similar in all the four years, therefore, the assessments were completed on the same day. The assessee claimed exemption under section 10(22) of the Income Tax Act and shown taxable income at nil. These returns were filed in response to notice under section 148 which was issued on 13-10-1992 and served on assessee on 19-10-1992. The assessee was required to file the details in regard to the claim under section 10(22). The details were filed. The assessing officer after considering all the details filed by assessee and discussing in detail in his assessment order dated 29-3-1995 disallowed the claim of the assessee by holding that assessee is not entitled exemption under section 10(22) as aims and objects of the assessee are not for the purpose of any education. The exemption is allowed for the purpose of running Universities, Schools and any other objects only for education purpose. In view of the assessing officer the assessee failed to establish that the aims and objects of the assessee are solely for the purpose of education. While holding so, the assessing officer discussed each and every aspect in detail. He considered the various case laws relied upon by the assessee and other case on which reliance was placed by the assessing officer. The assessing officer placed reliance in case of Sole Trustees, Loka Shikshana Trust v. CIT (1975) 101 ITR 234 (SC) wherein the Hon'ble Supreme Court has held that the term 'Education' has not been used in section 2(15) in a wide sense so as to include acquisition of every type of knowledge and refers to normal schooling only and also that the meaning of the term 'education' as used in section 10(22) of the Act is narrower than in section 2(15).

Reliance was also placed in case of CIT v. Maharaja Sawai Mansinghji Museum Trust (1988) 169 ITR 379/(1987) 33 Taxman 279 (Raj.) wherein it was held that the trust was not for the purpose of education as was earning profits.

After discussing the various decisions of the Apex Court as well as various other High Courts, the assessing officer further discussed in his order regarding the aims and objects of the assessee and then he discussed about the activities of the assessee which in his opinion was not for the purpose of education and was for the purpose of amassing assets (movable and immovable). While holding so, the assessing officer discussed that the assessee holding conferences, seminars and other functions and showing minimum expenses whereas the receipts are shown on a very higher side which are used for purchasing immovable assets as well as movable assets. The assessing officer further noted in his order that assessee also running three hostels for children of weaker section, children of the staff members and devotees and expenses made on them were on very lower side whereas the receipts shown are on a very higher side because assessee is claiming exemption under section 10(22) and no tax is payable thereon. The assessing officer also discussed in detail that how conferences are held and what are the activities during the period of conference. These activities are discussed by the assessing officer on pages 13, 14 and 15 of his order and after discussing these details, he held that the activities of the assessee are neither solely nor primarily educational activities. The activities of the organisation are essentially for the purposes of spreading and preaching messages of the Founding Father and also incidentally carry out other philanthropic work. Therefore, he held that it cannot be held that the assessee organisation exist solely for educational purposes and the assessee cannot be allowed exemption from Income-tax under section 10(22) of the Income Tax Act.

The alternate claim of the assessee under section 11 was also negatived by the assessing officer by holding that the conditions for claiming exemption under section 11 were not fulfilled by the assessee.

Therefore, the claim was rejected. However, interest under section 139(8) or 217 was not levied by holding that the assessee was under bona fide belief that he was exempt under section 10(22). Therefore, he did not charge interest under these sections as stated above.

The assessee preferred first appeal before the Commissioner (Appeals) and the Commissioner (Appeals) vide his consolidated order dated 21-9-1995 decided the appeals of all the four assessment years and the matter was restored to the file of the assessing officer for examining further. Before doing so, the Commissioner (Appeals) has given his finding on the issue of transfer of files from Sirohi to Udaipur jurisdiction and action under section 148. The contentions on both the issues are rejected by the Commissioner (Appeals) by holding that the assessing officer was having valid jurisdiction and the notice issued under section 148 were valid notices. The Commissioner (Appeals) allowed the contention of the assessee that CIT Jaipur has issued directions that assessee should continue to enjoy the exemption. This directions were issued vide letter dated 29-11-1975. The assessee's contention regarding the direction of the D.G. (Exemption) who written to assessee that assessee is eligible for exemption under section 10(22). In para 5.2 at page 6 the Commissioner (Appeals) has observed that" since the Dy. CIT is a subordinate authority to the Director General of Income-tax (Exemption) under section 118 of the Income Tax Act, the decisions /instructions issued by him are binding on the Dy.

CIT (Asstt.) unless there is change in the activities in violation of section 10(22). It was further stated by the C1T (A) that the assessing officer has not examined this aspect and, therefore, this issue needs further examination. After making these observations, the Commissioner (Appeals) discussed the issue regarding exemption under section 10(22).

The Commissioner (Appeals) also discussed in detail whether the society's aims and objects are for the purpose of education or not and whether assessee is earning any profit out of the aims and objects of the society and whether the assessee institution has a colour of 'University' or not. While discussing in detail, the Commissioner (Appeals) considered various case laws and also the aims and objects of the society then he was of the view that assessee is entitled for exemption under section 10(22). However, he restored the matter to the file of the assessing officer for examining afresh because the Commissioner (Appeals) wants to know whether there was any change in the activities of the assessee or not. Because these facts, in his opinion, were not brought on the record by the assessing officer.

How the department as well as the assessee are in appeals here before us. The department has filed appeals whereas the assessee has filed cross objections. Cross objections take shape of appeals as provided in the Income-tax rules.

We will take first department's appeals. For the sake of convenience, the grounds taken by the deptt. which are similar in all the four appeals are reproduced here as under:- "On the facts and in the circumstances of the case the Id. Commissioner (Appeals) has erred- (i) in holding that in section 10(22) of the Act, the word 'Educational Institution' need not take its colour from the word 'University' and thereby reversing the principle of 'ejusdem-generis' applied by the assessing officer in this case; (ii) in holding that the observations contained in Letter No. S1B/ SOG/19/73-74/172 dated 29-11-1975 of the then CIT, Rajasthan-11, Jaipur, and letter No. DGIT(E)/Cal./93-94/717 dated 15-6-1993 of Director General (Exemption), Calcutta are applicable in respect of the assessment proceedings for the year under consideration and thereby restricting the scope of examination by the assessing officer.

(iii) in setting-aside the assessment without deciding the issues on merits despite the fact that the findings given by the assessing officer were based on reasonable grounds as discussed in *lie assessment order." Ground no. (iii) which is against the setting aside of the assessment without deciding the issue on merits despite the fact that the findings given by the assessing officer were based on reasonable grounds as discussed in the assessment order. A query was raised by the Bench whether the ratio of the decision of the jurisdictional High Court in case of Prem Agencies v. CIT (1988) 173 ITR 110/36 Taxman 294 (Raj.) is applicable to the facts of the present appeals or not. The Id. D/R strongly stated that the ratio of the decision of the jurisdictional High Court is not applicable because Commissioner (Appeals) has discussed in detail and after discussing in detail he restored the matter to the file of the assessing officer by stating that the case needs some further examination. As there is no need of any further examination by the assessing officer as already discussed in detail all the reasons and Commissioner (Appeals) has also discussed those reasons in detail in his order, therefore, there is no point to restore the matter to the file of the assessing officer. It was further stated by the D/R that the department wants decision on merits that whether assessee is entitled for exemption under section 10(22) or not. The counsel of the other side also fairly admitted that the direction of the Commissioner (Appeals) was not proper in restoring the matter to the file of the assessing officer as there is no need of any further examination. All the facts are very clear and the decision could be taken at the level of Commissioner (Appeals) which he did not do.

Therefore, the ratio of the decision in case of Prem Agencies (supra) is not applicable at all and it was further stated that assessee also wants decision on merits on the point of exemption under section 10(22).

After considering the material and perusing the order of the Commissioner (Appeals), we find that the decision of the Jurisdictional High Court in case of Prem Agencies (supra) is not applicable on the facts of the present case. We noted that the High Court has held that the appeal by revenue to the Tribunal was merely for quashing the remand order passed by the Appellate Assistant Commissioner. The such a situation the scope of the appeal before the Tribunal was merely consideration of the correctness of the order of the remand. In that case the revenue did not agitate the merits of the case for decision by the Tribunal. Therefore, the Tribunal should have accordingly quashed the remand order and required the Appellate Assistant Commissioner to decide the appeal afresh on merits.

Therefore, it was rightly held that the Tribunal was not justified in proceeding to decide the question on merits itself, that point not having been agitated in the appeal filed by the revenue before the Tribunal. We also noted that it has been repeatedly emphasised in the judgment that the only grievance in the appeals filed before the Tribunal was against the remand made by the Appellate Assistant Commissioner but no relief was claimed on the merits of the case for decision by the Tribunal. However, the facts in the present case are distinguishable because an appeal is filed before the Tribunal by the department containing three grounds. Although ground no. 3 is against setting aside of the assessment without deciding the issue on merits but it has to be seen in connection with the ground nos. 1 & 2 where relief has been claimed on merits. We have also seen the memorandum of cross objection to the Tribunal by the assessee which is equivalent to an appeal. On page 2 of the Cross objection there is a heading "General". In ground nos. 2, 3, 4 & 5 under this head, specific relief of exemption under section 10(22) of the Income Tax Act has been prayed for. In other words, relief on merits has been prayed for before the Tribunal. In the above circumstances, we find that facts of the present case are materially distinguishable from the facts in the case of Prem Agencies (supra) and the ratio of the decision, is, therefore, not applicable to the facts of the present case since specific relief on merits has been prayed for. The Tribunal is authorised by law under section 254(1) of the Income Tax Act, 1961 to decide the issue on merits. The Appellate Tribunal has very wide power under section 254(1) of the Act according to which it may after giving both the parties of the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. Therefore, in view of these facts and circumstances, we will decide the issue on merits, as we have already stated that both the parties also want the decision on merits. While doing so, we are also of the view that the Tribunal should decide the issue here itself because no purpose will be served if the appeals are sent back to the file of the Commissioner (Appeals) to decide the issue on merits. In restoring the matter to the file of the Commissioner (Appeals), will tantamount to wastage of time because as per the finding of the Commissioner (Appeals) the case requires some minor enquiry. Voluminous materials were placed before the assessing officer to enable him to take a decision. Voluminous materials were placed before the Commissioner (Appeals) to enable to take a decision and now voluminous materials are here before us to take the decision on merits and we are of the view that no purpose will be served if the matter is restored to the file of the Commissioner (Appeals) or to the assessing officer as all the material facts are available in the orders of the assessing officer, Commissioner (Appeals) and the materials placed here before us. In our considered view, the Commissioner (Appeals) should have used his powers instead of remanding the case back to the assessing officer and lengthening the proceedings consequently. We noted that in para 4.2 the Commissioner (Appeals) referred to letter dated 29-11-1975 issued by CIT, Rajasthan-11, Jaipur to assessee, according to which the assessee institution was entitled to exemption under section 10(22) of the Income Tax Act, 196 1. The Commissioner (Appeals) observed that "there was no denial of the fact that DCIT (Asstt.) was subordinate to the Commissioner of Incometax. It was also well-settled that the subordinate officer was bound by the decision/ instructions of the superior officers. Therefore, until and unless the facts were found different for the years under appeal, the assessing officer could not deviate from the decision of the CIT. The matter was set aside to the assessing officer for examining this aspect, since the assessing officer had stated during the appeal proceedings that this aspect had not been examined, whether the facts were different in these four years," Similarly a letter had been issued by the Director General (Exemption) on 15-6-1993 according to which the assessee was advised that the assessee was rightly held to be an educational institution vide CIT, Rajasthan 11, Jaipur letter dated 29-11-1975 and it should continue to enjoy the exemption. Here, again the assessing officer stated that during the appeal proceedings it had not been examined whether the f acts in four years were different. The Commissioner (Appeals) held that the DC (Asstt.) is a subordinate authority to the Director General of Income-tax (Exemption) under section 118 of the Income Tax Act and his decision /instructions are binding on DCIT (Asstt.) unless there is change in the activities in violation of section 10(22). The matter was set aside to examine this aspect.

When the assessing officer was also present during the appeal proceedings, the Commissioner (Appeals) could very well have asked him to carry out enquiries instead of setting aside the assessment. The fate of setting aside has been very strange. Therefore, we are of the considered view that no purpose will be served if the matter is restored to the file of Commissioner (Appeals) again. While observing so, we are also of the view that when the Commissioner (Appeals) has dealt with the interpretation of words "Education" in para 7 of the appellate order where he has noted that the assessing officer had relied on the decision of the Supreme Court in case of Sole Trustees, Loka Shikshana Trust (supra) and the decision of Rajasthan High Court in case of Maharaja Sawai Mansinghji Museum Trust(supra) and on the other hand assessee had relied on Black's Law Dictionary, Gujarat State Co-operative Union v. CIT (1992) 195 ITR 279 (Guj.) and Income Tax Officer v. S.R.M. Foundation of India ( 1987) 21 ITD 598 (Delhi) and it had also drawn distinction on f acts between the ordinary museum and museum of assessee institution. After drawing distinction there was no point to set aside the matter to the file of the assessing officer. On the same lines, we are of the view that there is no point to restore the matter to the file of the Commissioner (Appeals) again and we would like to decide the issue on merits here at the stage of Tribunal.

As we have already stated that both the parties prayed for the decision on merits at the stage of Tribunal and we have also held that the appeals will be decided here at the stage of Tribunal. We have also heard the rival submissions while taking the arguments on point of decision on merits. The lengthy arguments were put-forth by both the parties and counter replies were also put-forth. The arguments of the parties which were put forth before the Tribunal are discussed here as under.

The Id. D/R had strongly argued that the aims and objects; of the assessee are not such where exemption under section 10(22) should be granted. The aims and objects of the assessee are such as to gain popularity and to spread over the message of their so-called Dada Guru as Prajapita Brahma Guru. It was also submitted that they were not giving any education to the masses and they were just spreading over their own feelings in the name of their Dada Guru who was considering himself as creater of Shiva, the Hindu God. It was further submitted that the section 10(22) is very clear. The language of section is also plain which says that the exemption under section 10(22) is available to the University or the institution, which is holding educational activities. No schools are run by the assessee, neither the assessee is affiliated with any educational institution approved by the Government.

The assessee is an independent body and only spreading the message of their Dada Guru. It was also stressed upon that the institution should be an educational institution where only education is to be given and that should be without any profit. These conditions were not fulfilled by the assessee as they are not educational institution neither they are giving any regular education to the students or masses of the country.

On the other hand, the assessee is receiving huge donations by stating that their students have donated the amount as Re. 1 / - per. student per day. But no evidence is produced by the assessee at any stage. The Id. D/R strongly relied upon the order of the Apex Court in Sole Trustees, Loka Shikshna Trust's case (supra) at p. 245, further reliance was placed on Trustees of the Tribune, In re (1939) 7 ITR 415 (PC), CIT v. Sorabji Nusserwanji Parekh (1993) 201 ITR 939 (Guj.), Bihar Institute of Mining & Mine Surveying v. CIT (1994) 208 ITR 608/76 Taxman 455 (Pat.), Maharaja Sawai Mansinghji Museum Trust's case (supra) Aditanar Educational Institution v. Addl. CIT (1997) 224 ITR 310/90 Taxman 528 (SC), Rao BahadurA.K.D. Dharmaraja Education Charity Trust v. CIT(1 9901182 ITR 80 (Mad.) 11 ITR 409 and (sic). It was further stated that in all these cases the meaning of education is well explained and after considering these case laws nobody can say that the assessee falls within the meaning of education. Therefore, the assessee is out of purview for exemption under section 10(22). The Id. D/R further stated that no doubt, the society is doing a good thing and the cause of the assessee is noble but that noble cause does not come within the purview of educational institution because no regular schooling is there, neither there is regular system. For educational institution, there is a regular schooling and there is a regular system. The assessee is holding only seminars, conferences etc. but it does not mean that they are holding any educational institution. Their actual activities are only holding seminars, conferences etc. and nothing else. While arguing so, the Id. D/R drew our attention at page 10 of the constitution of the assessee where all modem methods for spreading over their ideas are given. These methods are nothing but just for getting popularity through media etc. and nothing else. These ingredients cannot be treated as part of educational institution.

Therefore, the assessee is not satisfying any condition of educational institution or society. At this stage the Bench put a query to the Id.

D/R that if the Society is not spreading over any education towards the Society then what the Society is doing On that query, the Id. D/R was silent. No reply was submitted neither any submissions were put-forth after that on this point.

On the other hand, the ld. A/R of the assessee strongly submitted that the assessee's aims and objects are nothing but are only for the purpose of education. It was further stated that the assessee is a very old institution and granted exemption under section 10(22). Assessments under section 143(3) are completed wherein exemption under section 10(22) are granted. There is no change in aims and objects and any of the f acts. Therefore, the department cannot change their mind that the assessee is riot an educational institution and is not eligible for exemption under section 10(22). He drew our attention at pages 20 to 22 where assessment orders for assessment years 1984-85,1982-83 and 1975-76 are enclosed. All these three orders are passed under section 143(3) and the claim of the assessee under section 10(22) was accepted.

Therefore, the action of the deptt. is not factually or legally correct. It was further stated that the order of the Gujarat High Court in case of Gujarat State Co-operative Union (supra), wherein the Hon'ble Gujarat High Court has discussed the issue in detail. It was further stated that the ratio of the decision of the Apex Court in the case of Sole Trustees, Loka Shikshana Trust (supra) has been discussed in detail and the Hon'ble Gujarat High Court has held that Gujarat State Co-operative Union is an educational institution. The assessee's aims and objects are on better footing. Therefore, the assessee is very much eligible for exemption under section 10(22). It was further stated that in the case of S.R.M. Foundations of India (supra) the Delhi Bench of the Tribunal has held that Transcendental Meditation (TM) is an educational activity. The assessee is also having the meditation classes which spread over to the humanity to enlighten them to teach themselves to be healthy, co-operative with each other, there is no separate religion and all are one ie., human being. Therefore, the objects of the society are only for educational purposes and nothing else. It was further stated that after going through the aims and objects provided in the Constitution of the Society, nobody can say that the assessee is doing something else and not doing any educational activity. It was further stated, the education given by the assessee is more important because this is a material education who built moral and ethical character of a person and these are nothing but educational activity which is very pure and simple. It was further stated that no doubt assessee is having a museum for spreading over their aims and objects. It was further added that even University and Schools are having museums. It does not mean that they are not educational institutions. It was further stated that just as SRM Foundation is doing the work of training to their persons just to further train the peoples of every walks of life. The assessee is doing the same thing.

They first train their persons and then depute those persons for spreading over their education to build up a good moral character and health for the people of all walks of life. Therefore, the assessee has big infrastructure that is only for the purpose of giving education. It was further stated that even there is a Government policy now which says that there should be a system to give the people a moral education. He drew our attention at page 221 where a copy of the policy of the Government of India is placed. It was further stated that S.R.M.Foundation's facts are very nearer to the facts of the assessee.

Therefore, also the assessee is entitled to exemption under section 10(22). It was further stated that the assessee is one such body which is recognised by the International Institute like United Nations and other important organisations. Further reliance was placed on Aditanar Educational Institutions case (supra) and it was also argued that the assessee in any point of view is not a religious institution and only an educational institution which was exempted under section 10(22) and exemption should be continued accordingly. It was further stated that Commissioner (Appeals) has rightly held that the Institution is an educational institution and is entitled for exemption under section 10(22) but he restored the matter only for ascertaining that if any change in the facts of the assessee during these four years or not. It was further stated that there is no change of any kind either. in the aims and objects of the society or in the facts of the case. All the material facts are same and there is no change in them at all.

Therefore, there is no reason to take a different view in these years.

In reply the Id. D/R has stated that there should be judicial discipline which should be followed and he placed reliance on Sole Trustees, Loka Shikshana Trust~ case (supra) where specific decision is given that the institution should be solely for the education purposes.

The Id. D/R repeated that the assessee is not doing any educational activity. They are just publishing their propoganda just to get the importance. They have adopted a very systematic way to get the importance and for getting the importance they have to say something to the public because they want to achieve something by using the words of education otherwise they are not doing any educational activity.

We have considered these arguments carefully and we have also perused the material for the purpose of eligibility of exemption under section 10(22) and also perused the case laws as relied upon both the parties.

Now what is examined hereby us that is whether assessee's case falls in the category of section 10(22) or not. There should be fulfilment of some of the conditions for eligibility under section 10(22) and these texts are as under:- i. It should be existing solely for educational purposes and it should not be existing for the purpose of profit.

It will also be useful at this stage to note the provisions of section 10(22) of the Act.

"Section 10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- (22) any income of university or other educational institution, existing solely for educational purposes and not for purpose of profit." Now it is necessary to see whether assessee's aims and objects are such as they are required by the section 10(22). For this purpose we would like to note some of the clauses of the constitution and other activities of the assessee. A copy of prospectus, which is enclosed as Enclosure C-28 of the paper book wherein the information regarding the assessee ie., Prajapita Brahma Kumaris Ishwariya Vishwa Vidyalaya is mentioned. Prajapita Brahma Kumaris Ishwariya Vishwa Vidyalaya ('Vishwa Vidyalaya' for short) established in 1937 by the Founder Dada Shri Lekhraj. The Vishwa Vidyalaya is imparting education and giving training in moral and ethical knowledge and allied subjects daily in a systematic and rational manner at fixed hours to individuals and groups and practical guidance is given for all round development of human personality. Its International Headquarter is situated at Pandav Bhawan, Mount Abu. It has 2000 branches of learning spread all over the India, all the five continents and more than 50 other countries of the world.The Vishwa Vidyalaya is open to men and women and children for getting education without any distinction of caste, creed, sect and sex colour and age, country and nationality, community and religion, politics of profession etc, Education is imparted through regular classes supported by books, charts, lectures, museums, exhibitions, fairs, conferences, seminars, get-togethers, Raja Yoga camps, correspondence courses, films, slide shows and modern media in various fields of society. The thrust of the Vishwa Vidyalaya is of knowledge, imparted in this University, is, first, to make man, in reality, a master of his own self and to enable him to have practical wisdom and to learn lessons for constant peace and happiness and for excellence in life. The Vishwa Vidyalaya imparted the education free and without any financial obligations. No fees are charged. However, a voluntary contributions are received in the field of physical, intellectual, monetary or spiritual services by the students of the Vishwa Vidyalaya or brothers and sisters of the divine family who have gained immense benefit, by overcoming vices and habits like smoking, drinking, non-veg diet and etc.

As per their prospectus enclosed in the paper book, the University has over 2000 qualified, experienced, and dedicated teachers and experts in their line on its staff, besides highly talented and eminent personalities known all over the world for their accomplishment and achievements in spirituality and who generally provide deep inspiration to the students for in depth study, spiritual consciousness and inculcation of divine virtues. The Vishwa Vidyalaya has also girls hostels in Gujarat, Madhya Pradesh and Uttar Pradesh. The Vishwa Vidyalaya also maintains rich library. The Vishwa Vidyalaya also issued Certificates i.e., of one-week course, certificate of correspondence course, certificate of 3 days Raja Yoga, Certificate in one month's course in Raja Yoga and certificate of Raja Yoga teacher.

The aims and objects are given at page 9 in the Constitution which are reproduced hereas under:- To impart moral and ethical education so that man, by divinising his character and outlook, can be a useful member of the society, i. To educate man to realise that the conscious entity, called 'soul' is different from inert matter and to give him complete knowledge of the soul and mind so that he can lead a lotus-like life, ii. To educate man in the moral and spiritual interpretation of history and proper understanding of cosmos and cosmic wheel, iii. To impart spiritual, metaphysical or. Philosophical knowledge of the Creater and His creation, iv. To teach man the Sahaj Raja Yoga or mediation so that he can forge a link with the Creater and can have mental peace and good health and can build happy relations with others and can adopt a sympathetic approach and co-operative attitude to others, v. To educate man to forster soul-consciousness and universal brother-hood so as to shake off communal outlook, vi. To educate man so as to remove superstitions, blind faith, meaningless rituals and ignorance.

The functions of the Vishwa Vidyalaya is given in article 4. Some of the important functions are reproduced here as under: i. To open, at the invitation of aspirants/ students, spiritual education Centre or Sub-Centres for the objects as stated in article 3.

ii. To accord sanction to a Trustee Brahma Kumari or Trustee Brahma Kumar to run a Sub-Centre, to spread this education at her/his place without any monetary obligation on the part of Ishwariya Vishwa Vidyalaya.

iii. To distribute to Centres, Sub-centres or students individually daily Godly discourses, called "Murlis".

iv. To establish, open and run libraries, having books, periodicals or other literature for imparting the above said education, v. To impart short training and referesher courses to students, or Dedicated or Trustee Brahma Kumaris/Brahma Kumars to enable them to realise deeper layers of divine knowledge, Sahaj Raja Yoga, divine virtues and Godly services in practical use in day to day life.

vi. For the efficient management and administration and for carrying of the objects of the Ishwariya Vishwa Vidyalaya, to maintain at its headquarters and/or the spiritual centres funds of the Ishwariya Vishwa Vidyalaya and to pay out of these funds all expenses of and incidental to its functioning.

vii. To co-operate with the Central Government or any State Government or any institution for the furtherance of all or any the objects of the Ishwariya Vishwa Vidyalaya.

After going through these some of the important aims and objects and functions of the Vishwa Vidyalaya we do not see any reason to believe that assessee institution is not imparting education or doing something else.

We have also examined other facts of the case. Nowhere we find that the assessee is imparting education for the purpose of earning profits.

Assessee is riot charging any fees. However, they are accepting donations given by their students, teachers or their devotees inside or outside the country. The assessing officer placed reliance on the decision in case of Sole Trustees, Loka Shikshana Trust (supra) and Rajneesh Foundation v. Income Tax Officer (1983) 4 ITD 409 (Born.) and also relied on Addl. CIT v. Aditanar Educational Institution, (1919) 118 ITR 235 (Mad.) and after considering the facts of those cases, the assessing officer was of the view that the assessee's case does not fall in the category of Institution which are eligible for exemption under section 10(22). The Commissioner (Appeals) after considering the ratio of the Gujarat High Court decision in the case of Gujarat State Co-operative Union (supra) and in the case of Income Tax Officer v.S.R.M. Foundation of India (supra) that the assessee is an educational institution and eligible for exemption under section 10(22). However, Commissioner (Appeals) restored the matter to the file of the assessing officer for examining further.

As we have already stated, we have perused the case laws as relied upon by the parties. The facts in case of S.R.M. Foundation of India, we find, are nearer to the facts of the assessee's case. The brief facts of the S.R.M. Foundation were that the assessee is a Spiritual Regeneration Movement Foundation of India, registered under section 12A of the Income Tax Act, 1961 with the Commissioner of Income-tax, Lucknow and certificate under section 80G was also issued in its favour. It was founded by Maharishi Mahesh Yogi and had prescribed syllabus, trained teachers, branches all over India to spread the system of transcendental meditation (TM) to all the people in all walks of life. In the relevant assessment year, the assessee had claimed deduction under section 10(22). The Inspecting Assistant Commissioner held that the assessee was neither a University nor other educational institution recognised by University or any State or Central Government. The Inspecting Assistant Commissioner also found that the assessee charged fee for education and received donations from the donees (course participants) for incurring expenses though it had claimed that donations were made towards corpus. He, therefore, disallowed the assessee's claim. On appeal, the Commissioner (Appeals) allowed the assessee's claim, and the Tribunal upheld the findings of the Commissioner (Appeals). While upholding the findings of the Commissioner (Appeals), the Tribunal has discussed the ratio of decision of the Madras High Court in case of Aditanar Educational Institution, (supra) and the ratio of the decision of Sole Trustees, Loka Shikshana Trust (supra) and some other decisions were also discussed and after discussing the decisions the Tribunal came to the conclusion that the assessee is entitled exemption under section 10(22). At page 605 of 21 ITI), the Tribunal has observed that- "The systematic instruction in TM is irritially imparted to the trainers (a copy of their sample bio data has been placed by the assessee on the paper book) and then the trainers (qualified instructors) impart instruction to the trainees. We are of the view that the text of "Systematic Schooling" laid down by the Supreme Court in the case of Sole Trustees, Loka Shikshana Trust (supra), was satisfied by the assessee if we look at its functions and activities.

The facts in the case of Rajneesh Foundation (supra) were entirely different. There the Trust Deed envisaged embarking on a number of activities not related to its primary object. There was inter-mingling of several institutions, each carrying on a different activity but put together not having a common denominator called "education". This decision cannot, therefore, be taken advantage of by the department." The facts of the present case here before us are similar. The assessee is imparting education through Meditation, holding seminars, different courses for giving education, for strengthening moral character and good health. The details of the education are already stated above.

Therefore we are of the considered view that the ratio of the decision of the Supreme Court in case of Sole Trustees, Loka Shikshana Trust (supra), and the decision in case of Rajneesh Foundation (supra) are not of advantage to the department. Rather, the text laid down by Supreme Court is satisfied by the aims and objects of the Society.

The revenue has heavily relied on the decision in the case of Maharaja Sawai Manshingji Museum Trust (supra). In the above case it was held that above museum was not an educational institution and was not entitled to exemption under section 10(22) of the Income Tax Act.

'Education' connotes the process of training and developing knowledge of students by normal schooling. The museum cannot be taken to be an educational institution existing solely for educational purposes. A reference was made to the decision of Supreme Court in case of Sole Trustees, Loka Shikshana Trust (supra). The facts in brief are that the assessee was accepted as a Trust for charitable purpose within the meaning of section 2(15) of the Income Tax Act, 1961 and enjoyed exemption under section 11 of the Act. Later on it was contended that it was an educational institution, the income of which was exempted under section 10(22) of the Act. The assessing officer held that it was not an educational institution. This finding was confirmed by the Appellate Assistant Commissioner. However, the Tribunal rejected the decision and held that running and maintaining the Museum was an "educational institution" and the income was exempt under section 10(22) of the Act. The Hon'ble High Court examined the provisions of section 10(22) of the Act and observed, "It is amply clear from a bare reading of it that the "educational institution" must exist "solely" for educational purposes. "Solely" means exclusively and not primarily.

Simply because certain persons may add something to their knowledge by visiting the museum, it cannot be said that the museum exists "solely" for educational purposes. The emphasis in section 10(22) is on the word "solely" (Emphasis, here italicized in print, supplied).

Thereafter, explanation of the word "education" occurring in section 2(15) of the Act by the Supreme Court in case of Sole Trustees, Loka Shikshana Trust (supra) was taken up and following observations were made: "According to their Lordships of the Supreme Court, visiting a museum is one way of education in the great school of life but that is not be sense in which the word "education" is used in clause (15) of section 2 of the Act. According to their Lordships, "education" connotes the process of training and developing the knowledge, etc., of students by normal schooling. In this view of the matter, the museum cannot be taken to be an "educational institution' existing "solely" for educational purposes. Section 2(15) is wider in terms than section 10(22) of the Act. If the assessee's case does not fall within section 2(15), it is difficult to put it in section 10(22) of the Act." The revenue has relied upon the underlined portion of the first extract and taken it to mean that the High Court was deciding a dispute whether a partial educational purposes would be entitled to benefit under section 10(22) of the Act. However, the judgment must be read as a whole and should not be interpreted as if it was a statute. The assessee was maintaining a Museum exclusively. There was no other object. It was in that context that it was held that it did not amount to "education" within the meaning of section 2(15) of the Act. The facts of the present case are, however, different.

In the present case as explained separately, there was "education^ and the assessee was an educational institution existing only for educational purposes. There were inter alia regular syllabus, classes and attendance. The Museums were really in the nature of pictorial exhibition to create awareness of the existence and the objects of the institution and its activities, so as to arouse interest in the minds of viewers and provide incentive to them to join the training classes.

The Museums were, therefore, not "objects" but the "means" of achieving the objects.

The reference may be made to the decision of Supreme Court in the case of Aditanar Educational Institution (supra) at page 318. It is stated that one must bearinmind the distinction/difference between the corpus, the objects and powers of the entity. This has been elaborated further by the Supreme Court in Thiagarajan Charities v. Addl. CIT (1997) 225 ITR 10 10/92 Taxman 152 at pages 1022 to 1025.

Since the Museums were not the objects of the assessee institute, but only the means to the object, the ratio of the decision in the case of Maharaja Sawai Mansinghji Museum Trust (supra) applicable to the assessee's case. The reliance of the Revenue on a sentence picked up from the Judgment without the reference to the context is also misplaced.

The revenue has also relied upon a decision of Gujarat High Court in case of Sorabji Nusserwanfi Parekh (supra), wherein it was held that the assessee is not entitled to exemption under section 10(22) of the Act. The revenue has relied upon the portion that in absence of actual evidence of imparting education by normal schooling and normal conducting of classes would not be sufficient for the purpose of qualifying the institution to earn the benefit of section 10(22) and after relying this portion the assessing officer has held that normal schooling and classes were not there in the assessee's case and, therefore, benefit of section 10(22) of the Act could not be given.

Here, again the revenue has picked up a sentence here or a sentence there from the judgement with the result that reference is Judgements are not construed as statute but must be read as a whole.

The decision takes colour from the question involved. In case of CIT v.Sudhir Jayantilal MuIji (1995) 214 ITR 154/84 Taxman 205 (Bonj.) which has furtherrelied upon thedecision of the Supreme Court in CITv. Sun Engg. Work-s (P) Ltd. (1992) 198 ITR 297/64 Taxman 442 at page 320. In this case the question and the consideration were limited to whether a Trust which was not carrying on educational activity itself but only providing schlorship and financial assistance to students was entitled to exemption under section 10(22). The facts in the present case are distinguishable, since 1 lie assessee was carrying on educational activity itself and was not providing scholarships or financial assistance. In such a case, any incidental if any, to provide scholarships or any financial assistance would not conic in the way of exemption. Further, there were teachers and thought.

In this context, the decision of Gujarat High Court in the case of Gujarat State Co-operative Union (supra), which has been relied upon by the assessee extensively, is very much relevant. The judgment of the Supreme Court in case of Sole Trustees, Loka Shikshana Trust (supra) was explained in this Judgment and it was held that it would not be proper to infer that the word "education" is limited to schools, colleges and similar institutions and does not extend to any other media for such acquisition of knowledge. The changing times and the widening horizons of knowledge may bring in changes in the method of teaching f or the better. In the institutional set up, though the primary mode of sitting in a classroom may remain ideal for most of the initial education, it may become necessary to have a different outlook for further education. It is not necessary to nail down the concept of education to a particular formula or to further it through a designed channel. Its progress lies in the acceptance of new ideas and development of appropriate means to reach them to the recipient.

In the light of the above, the reliance of the Revenue on a few words from the judgment taken out of context is totally misplaced.

The revenue has also relied upon a decision in the case of Bihar Institute of Mining & Mine Surveying (supra) and again the revenue has relied on the decision for the contention that normal schooling is a must for education. However, here again the judgment must be read as a whole. Here the question was whether the assessee was having a charitable purpose. It is noted by the High Court at page 615 that the definition of "charitable purpose" was inclusive and not exhaustive.

1n that case the assessee institution was being run with a. profit motive. The following observation appear at page 615- "It is true that by reason of the Finance Act, 1983, the question as to whether any charitable institution is being run with a profit motive or not has lost its relevance. However, the word "charitable" prefixing the word "institution" has to be given its full effect." Thus the profit motive continued to weigh heavily with the High Court by emphasising the significance of the word "charitable". The facts in the present case are distinguishable. There is no profit motive and no such motive has even been alleged. The claim is under section 10(22) of the Act, according to which the educational in stitution should exist solely for educational purposes and not for the purpose of profit. If there had been any motive of profit, the revenue would have raised the objection, but no such objection has been raised. In light of the above, the ratio of the decision is not applicable to the assessee's case. The reliance of the revenue on a few words from the judgment taking out of context is misplaced.

Therefore, in view of these facts and circumstances and as our discussion above, the assessee is entitled exemption under section 10(22) of the Income Tax Act, 1961 as assessee's aims and objects are to impart education and not to cam any profit. Therefore, the text of section 10(22) is fully in favour of the assessee.

As we have already stated that assessee was enjoying status of educational institution for the purpose of exemption under section 10(22) and the assessment under section 143(3) has been completed wherein the exemption was accepted. The exemption was granted upto the assessment year 1987-88 but in these four years the exemption was not granted. We are not able to understand that why the assessing officer denied the exemption. There is no material change in the facts of the earlier year or in the facts of these four years. Therefore, also, we hold that assessee is entitled for exemption under section 10(22).

Finally, in view of our discussion as above, we hold that assessee is entitled for exemption under section10(22) for all the four years. In view of these findings of ours, we reverse the finding of the Commissioner (Appeals) on the point of restoring the matter to the file of the assessing officer for examining further. The assessing officer is directed to allow the exemption under section 10(22) to the assessee in all the four years.

As we have already stated that both the parties were agreed that they want decision only on the point whether the assessee is entitled exemption under section 10(22) or not, we have given our findings on this point and, therefore, the remaining grounds in the appeals of the department and in cross-objections of the assessee and alternate pleas regarding exemption under sections 11 and 12 need not to be disposed of at this stage in view of our above decision.

In the result, the department's appeals and assessee's cross-objections are partly allowed.


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