Income-Tax Officer. Versus S. R. M. Foundation Of India. – Income Tax – ITAT DELHI-A – Tri – Exemption, Income Of Educational Institution – 1987 (4) TMI 109 – ITAT DELHI-A – ITD 021, 598, TTJ 030, 283, – - – Dated:- 14-4-1987 –
Member(s) : K. C. SRIVASTAVA., V. P. ELHENCE. ORDER Per Shri V. P. Elhence, Judicial Member-These eight appeals, filed by the department, arise out of the orders of the learned Commissioner of Income-tax (Appeals) IX, New Delhi for the A. Y. 1974-75 – 1976-77 and 1978-79 -1982-83. There is no appeal for the A. Y. 1977-78. 2.
The common question raised is whether in respect of its income the assessee is entitled to the claim of exemption under section 10(22) of the Income-tax Act, 1961 as an educational institution, existing solely for educational purposes and not for purposes of profit. 3. The assessee S.R.M. Foundation ofIndia, T-714, New Friends Colony, New Delhi-65 has been assessed in the status of an AOP (Association of Persons). The Spiritual Regeneration Movement Foundation of India is a society registered under the Societies Registration Act. It was founded in 1963 by Maharishi Mahesh Yogi. It is registered under section 12A of the Income-tax Act, 1961 with the Commissioner of Income-tax,Lucknowand a certificate under section 80G was also issued in its favour. The assessee foundation claimed exemption of its income under section 10(22) which provides for the exemption of the income of a university or other educational institution existing solely for educational purposes and not for the purposes of profit . However the Inspecting Asstt. Commissioner (Assessments) took the view that the assessee was neither a university nor other educational institution recognised by any university or any State or Central Government. He was also of the view that the activities of the assessee foundation did not satisfy the requirements enunciated by the Supreme Court in the case of Sole Trustee, Loka Shikshana Trust v. CIT  101 ITR 234. He noticed among other things that the assessee foundation had charged fee for education and also received donations from the trainees (course participants) for incurring expenses though it was claimed that donations were made towards the corpus. The assessee s claim for exemption under section 10(22) was accordingly rejected and the total receipts of the assessee for the assessment years in question (including the donations) were treated as income. The alternative submission that the assessee was an institution established for charitable purposes and so its income was exempt under section 11, was also rejected. It may be mentioned here that for the A.Y. 1977-78 the claim for exemption under section 10(22) was also rejected by the IAC (Asst.) similarly but no appeal was filed by the assessee against the same as the alternative claim under section 11 had been allowed. 4. In appeal, the learned Commissioner of Income-tax (Appeals) after examining the assessee s Memorandum of Association and its activities, took the view that they satisfied the tests laid down by the Supreme Court in the case of Sole Trustees, Loka Shikshana Trust and that as a Society running an educational institution, it qualified as other educational institution and so he directed the assessing officer to grant to the assessee the exemption claimed under section 10(22). Accordingly he did not deal with the assessee s alternative claim of exemption under section 11. 5. That is how the department is aggrieved and has come in appeals before us. Shri D. K. Sharma, the learned Departmental Representative, strongly relied upon the orders of the assessing officer as also on the decision of the Supreme Court in the case of Sole Trustees, Loka Shikshana Trust. He argued that in that case the Supreme Court had interpreted education as imparted during the normal schooling. According to him the instruction in Transcendental Meditation (T.M. for short) imparted to the trainers and the trainees could not be termed as education in the Indian context. Shri Sharma submitted that the learned CIT (A) had been swayed by the concept of T.M. and had therefore, missed the real issue. Reference was also made by him to the decision of the Appellate Tribunal in the case of Rajneesh Foundation v. ITO  4 ITD 409 (Bom.) wherein it was held that the propagation of the instructions and teachings of Acharya Rajneesh did not amount to education. The learned departmental representative also argued that the words or other educational institution in section 10(22) had to be interpreted on the principle of ejusdem generis with reference to the word a university . Alternatively he argued that the matter be sent back to the CIT (A) for a decision afresh. On the other hand Dr. V. Gauri Shanker the learned counsel for the assessee referred to the decision of the Hon ble Madras High Court in Addl. CIT v. Aditanar Educational Institution  118 ITR 235 for the proposition that the principle of ejusdem generis had no application in interpreting the language of section 10(22). Regarding the expression or other educational institution he referred to the following decisions- (i) Royal Choral Society v. IRC  25 TC 263 (CA); (ii) Katra Education Society v. ITO  (iii) CIT v. Sindhu Vidya Mandal Trust  142 ITR 633 (Guj.); (iv) ITO v. Devanga Educational Association  8 ITD 490 (Mad.); and (v) Trustees of the Tagore Educational Society v. Seventh ITO  10 ITD 279 (Bom.). He referred to the implications of T.M. as discussed by V. R. Krishna Iyer of the Supreme Court in the case of Hiralal Mallick v. State ofBihar AIR1977 SC 2236 at 2243. He also referred to Chamber s Twentieth Century Dictionary, Iyer s Law Lexicon. Supreme Court s decision in the case of Sole Trustees, Loka Shikshana Trust and the decision of the Hon ble Calcutta High Court in the case of Birla Vidhya Vihar  136 ITR 445 as to the meaning of education. In this connection he also referred to the following Trust English decisions (i) Osmund v. Attorney General & Mason  1 All. E.R. 262 (A) (ii) In re. Delius Will Trusts  1 All E.R. 854 (Ch. D.). Reference was also made by him to (i) the assessee foundation s Memorandum of Association (ii) Copy of Syllabus recommended by the assessee (iii) Sample copy of the report of the Director Teachers Training Course Rishikesh (iv) Copy of the biodata of the participants of Teacher s Training Course (v) Copy of the daily curriculam (vi) List of branches of the assessee foundation (vii) Copies of sample certificates from various schools and the details of the institutions where TM has been initiated. The learned counsel for the assessee sought to support the order of the learned CIT (A). Lastly he submitted that as an educational institution, the assessee foundation existed solely for educational purposes and not for the purposes of profit. 6. We have given our careful consideration to the able arguments addressed to us on both the sides. It is to be examined whether the following prerequisites of section 10(22) are satisfied in the present case: (i) The assessee foundation should be an educational institution; (ii) It should be existing solely for educational purposes; and (iii) It should not be existing for purposes of profit. As held by the Hon ble Madras High Court in the case of Aditanar Educational Institution on the language of section 10(22) the principle of ejusdem generis can have no application. We have therefore, only to fall back on t………………
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