Trust Having Multiple Objectives Can’t Be Said Solely Exist for Educational Purposes | No Sec. 10(23C)(vi) Exemption

Case Details: Parul Arogya Seva Mandal Trust v. Commissioner of Income-tax (Exemption) - [2023] 154 taxmann.com 349 (Ahmedabad-ITAT)

Judiciary and Counsel Details

• • Smt. Annapurna Gupta, Accountant Member & T.R. Senthil Kumar, Judicial Member
  • Akhildenra Pratap Yadav, CIT – DR for the Respondent.

Facts of the Case

The assessee-trust was running colleges for imparting higher education on Diploma, Degree, and Master (P.G.) courses of Engineering, Pharmacy, Management, Computer Application, Ayurveda, Homeopathic Medical, Physiotherapy, etc.

The objects of the trust were medical treatment for poor people, undertaking general activities related to public health, organizing Family Planning Centres, undertaking activities for education from pre-primary to higher education at university levels, providing and taking forward necessary help/assistance for the development of educational activities in different branches/faculties of education.

The assessee filed an application seeking exemption under section 10(23C)(vi). The Commissioner (Exemption) denied exemption on the ground that the assessee had multiple objects in the trust deed, which did not satisfy the conditions of section 10(23C)(vi).

Aggrieved by the order, the assessee filed an appeal to the Ahmedabad Tribunal.

ITAT Held

The Tribunal held that section 10(23C)(vi) emphasizes the word ‘solely’ for education. ‘Education’ connotes the process of training and developing students’ knowledge through normal schooling. The assessee submitted clarification regarding its medical object but remained silent regarding its other non-educational objects, such as organizing Family Planning Centers, undertaking activities for upbringing, etc.

Thus, it proves that the assessee does not exist “solely for the purpose of education”. The assessee trust has not submitted documentary evidence which could establish its contention that those students have used such scholarships for education. Thus, the assessee’s contention that the trust activities are only for education is incorrect.

Considering the facts of the case, the assessee’s trust having multiple objects cannot be said to exist ‘solely for the purpose of education’. Therefore, the exemption under section 10(23C)(vi) was rightly denied to the assessee.

List of Cases Reviewed

• • New Noble Educational Society v. Chief CIT [2022] 143 taxmann.com 276 (SC)/[2023] 290 Taxman 206/[2022]448 ITR 594 (SC) (para 11) followed.

List of Cases Referred to

• • New Noble Educational Society v. Chief CIT [2022] 143 taxmann.com 276/[2023] 290 Taxman 206/[2022] 448 ITR 594 (SC) (para 7)
  • Dharmaposhanan Co. v. CIT [1978] 114 ITR 463 (SC) (para 8).