Thursday, September 25, 2014

Imparting of training in seminary was 'education'; assessee was entitled to registration as a trust

Where assessee was imparting training to students in 'Seminary', training programme undertaken by assessee was also education and, therefore, it was entitled to registration under section 12A.


a)The assessee was imparting training to students in 'Seminary'. In the return of income, it claimed exemption under section 10(23C)(iiiad). The Assessing Officer disallowed the claim of exemption.
b)On appeal, the assessee contended that it was entitled to registration under section 12A, as the training imparted in the 'Seminary' amounted to education, therefore, it had to be treated as trust running educational institution.

c)The CIT(A) opined that the training programme undertaken by the assessee could not be treated as an educational programme in order to give it status of an educational institution. On second appeal, the Tribunal held that the assessee was an educational institution.

On appeal, the High Court held as under:

It was a settled position by virtue of a judgment of the Kerala High Court rendered in the case of CIT v. St. Mary's Malankara Seminary [2012] 206 Taxman 429 that imparting training to students in 'Seminary' was also education. In the light of settled position, one needed not to ponder much over the issue or the controversy regarding the registration under section 12A to be given to the assessee. - CIT V. ST. MARY'S MALANKARA SEMINARY [2014] 48 387 (Kerala)

Editor’s Comments:

In case of St. Mary’s Malankara (Supra), the question that arose for consideration of the High Court was whether assessee engaged in 'Seminary' teaching for priesthood was an educational institution entitled to exemption from tax under section 10(23C )(iiiad)?.

The High Court held that the term 'education' should enjoy a wide connotation covering all kinds of coaching and training carried on in a systematic manner leading to personality development of an individual. In the case of seminary, students on completion of their studies were made priests who headed the churches as religious leaders. The religious teaching in the seminary was also an education and, therefore, an 'educational institution' entitled to exemption under section 10(23C )(iiiad).