Conducting Safety Training Programmes, Seminars, Workshop, Conferences are ‘Educational Activities’, Exempted from Income Tax: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT) held that trust conducting safety training programmes, training seminars, workshops, conferences are educational activities and are exempted from income tax under section 11 of the Income Tax Act,1961.

The assessee is a public charitable trust stated to be registered under the Bombay Public Trust Act, 1950 and is also registered under section.12(A)(a) of the Income Tax Act, 1961.

Consequently, the assessee trust is eligible for exemption of its income in terms of Section 11 of the Act. The assessee trust filed its return of income claiming exemption under s.11 of the Act. The return of income so filed was selected for scrutiny in the course of the scrutiny assessment.

The AO raised the question of eligibility of exemption claimed under s.11 (1) of the Act r.w. provision of Section 2(15) of the Act. The AO eventually held the surplus of Rs.19,86,737/- to be non-charitable in nature and consequently, taxable under the normal provisions of the Act.

The bench comprising of Judicial Member, Mahavir Prasad and Accountant Member, Pradip Kumar Kedia pronounced the order based on an application filed by Gujarat Safety Council.

​​Section 11 elaborates as provides an exemption for income derived from property held under trust wholly for charitable or religious purposes to the extent such income is applied for charitable or religious purpose in India. However, this exemption shall be subject to certain conditions.

The Tribunal examined as memorandum of association of the Trust, key objects of the trust are conducting safety training programmes, training seminars, workshop, conferences etc. for personnel working in Industries (Industrial safety), for people commuting on roads (road safety) and for the persons working at homes (home safety) etc.

The Tribunal further examined the form of handbook/literature published together with stated activities like holding conferences on industrial safety programmes, public talks, seminars, workshops etc. on an ongoing basis to inculcate safety measures would also be bracketed in the league of ‘educational activities’ when tested.

Relying on Gujarat High court decision in Ahmedabad Management Association, Court took note of the changing times and ever-widening of the horizon of knowledge, rapid changes in the method of teaching for constituting the word ‘education’ used under s.2(15) of the Act. Thus the court held that activities carried out by the assessee would be entitled to exemption under s.11 of the Act without any demur.