SLP granted against order of High Court wherein it was held that since dominant objective of ICAI was to regulate profession of Chartered Accountancy in India, it was a charitable institution and conduction of coaching classes and campus placements for a fee by it could not be held to be business, trade or commerce Institute of Chartered Accountants of India[2016] 65 taxmann.com 63 (SC) MAY 1, 2015

Advance given by educational institution u/s 10(23C)(iiiad) to another institution existing for educational purposes does not take away the exemption of educational institution Vairams Kindergarten Society [2015] 63 taxmann.com 165 (Chennai - Trib.) FEBRUARY 6, 2015 Madras High Court in the case of V.G.P. Foundation rendered in the context of funds given to a sister concern, which was a private limited company of which the trustees of the assessee were also directors. However, in the instant case, the assessee, being an educational institution, has advanced money to another charitable society registered under section 10(23C)(vi) of the Act and further the recipient society is also an educational institution. Also decision rendered in the case of St. Francis Convent School (P&H) is also not applicable, since the funds were diverted by the assessee therein to the Diocese of Jalandhar.

The contention of revenue that objects “To foster and develop an active and positive feeling of love and brotherhood for everyone and cultivate a strong sense of patriotism., To ensure an all round development of their personalities through educational social and cultural activities, To foster such education to the poor irrespective of caste, creed and culture” do not fall under with in definition of 'solely for educational purpose held not correct by Uttrakhand High Court in Maharani Luxmi Bai Memorial Educational Society[2015] 64 taxmann.com 44

Where a society is running an educational institution, it can make application under section 10(23C)(vi) on behalf of educational institution and application need not be filed by educational institution itself . Maharani Luxmi Bai Memorial Educational Society[2015] 64 taxmann.com 44 (Uttarakhand) JULY 29, 2015

Education is not business . Held by Supreme Court in AIR 1963 SC 1873 in University of Delhi vs Ram Nath.

Meals being supplied in a hostel to the scholars, visitors, guest faculty etc. can not be exigible to sales tax where main activity is academics- as per Allahabad High Court in IIT Kanpur 38 STC 428; Scholars home Senior Secondary School 42 VST 530; Swadeshi Cotton Mills 15 STC 505.

To constitute the business , the words “carrying on”[carried on in section 2(c) of PVAT] requires something more than merely buying selling or buying. Whether a person carries on business in a particular commodity depends upon volume, frequency, continuity and regularity of transactions of sale and purchase and the transactions must ordinarily be entered into with profit motive. Where main activity of school is to impart education the incidental activity of providing uniform can not be held to be business [Para 4] – Lawrence School Sanawar (2015) 52 PHT 24 (HPTT)

SLP admitted by supreme court against order of Karnatka High Court in Islamic Academy of Education[2015] 54 taxmann.com 255 (Karnataka) SEPTEMBER 9, 2014 where in it was held that where trust is genuine and activities are being carried out in accordance with objects, registration of the Trust can not be cancelled on the ground that funds are being misappropriated or that accounts are being falsified although exemption u/s 11 may be denied- Islamic Academy of Education [2015] 62 taxmann.com 218 (SC)

Merely charging Fee resulting in surplus does not ipso facto mean that activities are commercial in nature

 ICAI 347 ITR 99(DEL)

CA Study Circle 347 ITR 321 (Mad)

Tolani Education Soc 259 CTR 26 [Bom ]

Beaureau of Indian Standards 358 ITR 78 (Del)

Sabarmate Ashram 362 ITR 539 (Guj)

Indian school certificate exam 2014 TIOL 855

Indian international  centre(Del Trib) 11-5-15 57 tmc 265 

Application for approval under Section 10(23C)(vi) of the Act could not be rejected only on the ground that it was not accompanied with an audit report. Report can be filed during approval process also.Support drawn from P&H High Court in Punjab Financial Corporation (2002) 254 ITR 6 and Circular No. 689 of 1994- All India Personality Enhancement & Cultural Centre for Scholars Aipeccs Society [2015] 62 taxmann.com 92 (Delhi)

Advance to person engaged in managing the educational institution for purchase of land shall not dis entitle the institution from exemption (Para 72,73) )- All India Personality Enhancement & Cultural Centre for Scholars Aipeccs Society [2015] 62 taxmann.com 92 (Delhi)

Section 11(5) is not applicable to educational institutions u/s 10(23C)(iiiab)/(iiiad) i.e. institutions having gross receipts lesser than one crore or being substantially financed by government need not invest in specified modes u/s 11(5)[Para 63 2nd Line] )- All India Personality Enhancement & Cultural Centre for Scholars Aipeccs Society [2015] 62 taxmann.com 92 (Delhi)

For educational Institutions being granted approval u/s 10(23C)(vi) (CIRCULAR NO.14/2015 dated 17-08-2015) following postulates put accross:

1. Guidelines of Supreme Court in American Hotel and lodging 301 ITR 86 to be followed.

2. No denial to be made where compliance depends upon events that have not taken place till date of application.

3. Institution granted registration both under S. 12AA and 10(23C)(vi), no automatic withdrawal of approval where 12AA registration cancelled unless conditions under 10(23C) are violated.

4. No withdrawal of approval for accumulation of profit be cause the third Proviso to the said clause clearly provides that accumulation of income is permissible subject to the manner prescribed therein provided such accumulation is to be applied "wholly and exclusively to the objects for which it is established.  

 5.Collection of small and reasonable amounts under different heads of fee, which are essentially in the nature of fee connected with imparting education and do not violate any Central or State regulation does not, in general, represent a profit making activity E.g. application fee, examination fee, fee for issuing transfer certificate, subscription fee for library.    

6. Extra ordinary powers of managing  trustees to appoint other trustee and their heirs also shall not result in denial of approval

Institute conducting coaching classes and charging fees, denial of exemption is held to be not valid.(S. 10(23C) (vi))

The Institute of Chartered Accountants of India was denied exemption u/s. 10(23C) (vi) for the A.Y. 2006-07 onwards on the grounds that (i) the Institute was holding coaching classes and, therefore, was not

Queens Educational Society- Decision of Uttrakhand High Court for Educational Institutions dissented

1. Pine Grove International Charitable Trust (P&H) 327 ITR 73
2. Vanita Vishram Trust (Bom) 327 ITR 121
3. Maa Saraswati Trust (HP) 194 Taxmann 84
4.St. Lawrence Educational Society (Delhi HC) 197 Taxmann 504

Educational Institution-Investment in Trust publishing magazines dealing with education ancillary to main object of running educational institution ‐ trust is entitled to exemption

The assessee was allowed the benefit u/s. 11 of the I.T Act 1961, till 1985‐86. But, for the asst. years 1986‐87 and 1987‐88, the A.O. denied the exemption for the reason that (i) the assessee was not a public charitable trust; its objects were limited for the benefit of a few people; (ii) the assessee was running educational institution only for the purpose of commerce; and (iii) there was violation of the provisions of section 11(5) of the Act, inasmuch as the assessee invested the monies in two organizations publishing magazines and thereby infringed section 13(1)(c). The Commissioner (Appeals) and the Tribunal held that the assessee was entitled to exemption. On appeal the High Court held that the A.O. did not give any clear finding regarding violation of section 11(5) except making such a comment. Investing monies in the two organizations publishing magazines could not be said to be commercial ventures. They were incidental and ancillary to the main activities of the trust. The assessee was entitled to exemption under sec. 11.The Supreme Court in Yogiraj Charity Trust (1976) 103 ITR 777 (SC) held that if the primary or dominant purpose of a trust is charitable, another object which by itself may not be charitable but which is merely ancillary or incidental to the primary or dominant purpose would not prevent the trust from being a valid charity. (A.Ys. 1986‐88, 1987‐88, 1988‐89) 
CIT v. Vijaya Vani Educational Trust (2012) 349 ITR 280(AP)(High Court)

Institute providing academic services and applying income towards same is entitled to registration - Where assessee - Institute was registering students to write exams conducted by ICS, London, and providing necessary academic support to them and applying income towards purpose of Institute, registration u/s 12AA could not be denied

[2012] 25 taxmann.com 289 (Chennai - Trib.) Institute of Chartered Shipbrokers

Capital Asset must be created before making application for grant of registration u/s 12AA

Hardayal Charitable and Educational Trust [2012] 25 taxmann.com 288 (Agra - Trib.)    In the instant case, the building of educational  institution was still under construction and no educational activity was carried on till date of making application u/s 12AA. Hence ITAT asked to make fresh application when activity is started. 
Self Employers Service Society v. CIT [2001] 247 ITR 18/[2000] 113 Taxman 703 (Ker.) (para 13) followed.

Service Tax on Educational Service

Vide Not 25/2012, dated 20.06.2012 the Central Government exemptions to education services from the whole of the service tax leviable under section 66B of the FA 1994.   Item No. 9 of the said mega Notification provides that the services to or by an educational institution in respect of education exempted from service tax by way of-

Service Tax on vocational educational courses-Clarification

Circular dated 28-08-2012 issued by CBEC regarding VEC offered by Government institutions and Institutions established under law as under:

1. Clarification has been sought in respect of levy of service tax on certain vocational education/training/ skill development courses (VEC) offered by the Government (Central Government or State Government) or local authority themselves or by an entity independently established by the Government under the law, as a society or any other similar body.