Conducting courses in gemmology, jewellery arts, jewellery design amounts to imparting of education entitling assessee benefit of exemption u/s 11 of the Income Tax Act.
In a recent judgment, ITAT Mumbai has held that conducting courses in the field of gemmology, applied jewellery arts, jewellery design and manufacturing arts of diamond jewellery amount to imparting of education entitling assessee benefit of exemption under section 11 of the Income Tax Act.
ABCAUS Case Law Citation:
4905 (2025) (12) abcaus.in ITAT
In the instant case, the appellant assessee had challenged the order passed by the CIT(A) in confirming denial of exemption u/s 11 of the Income Tax Act, 1961 (the Act) holding that the assessee was not imparting education within the meaning of section 2(15) of the Act.
The assessee was a company registered u/s. 25 of the Companies Act, 1956 and was a non-profit entity setup for imparting education in the field of gemmology, applied jewellery arts, jewellery design and manufacturing arts of diamond jewellery, coloured stones or other specialities and gems and jewellery business management through schools/institutes or otherwise.Â
The case was selected for scrutiny. During the course of hearing the AO called on the assessee to furnish various details including courses conducted and the fees received against it, duration of the courses etc.
After perusing the various details furnished by the assessee the AO was of the view that the activities of the assessee were for advancement of general public utility in nature and were hit by the First Proviso to Section 2(15) of the Act, as the assessee had undertaken activities in the nature of business and the services in relation to business industry of gems and jewellery.
Accordingly, the AO held that the activities of the assessee could not be held as “imparting of education” and that the assessee had carried on commercial activities in the name of education. As a result, the AO disallowed the exemption u/s 11 of the Act and assessed the total income based on the income and expenditure account.
The CIT(A) after considering the submissions of the assessee upheld the order of AO by stating that the assessee had undertaken activities in the nature of business and services in relation to business industry of gems and jewellery and persons engaged into the same. Hence its purpose did not constitute charitable purpose and thereby income earned by it cannot be said to be derived for charitable purpose.
The Tribunal observed that the Hon’ble Supreme Court has held that the word “education” has been used in section 2(15) in the systematic instruction, schooling or training given to the young is preparation for the work of life. It also connotes the whole course of scholastic instruction which a person has received. The word “education” has not been used in that wide and extended sense, according to which every acquisition of further knowledge constitutes education. What education connotes in that clause is the process of training and developing the knowledge, skill, mind and character of students by normal schooling.
The Tribunal noted that the assessee was conducting courses in the field of gemology through structured curriculum through qualified professionals in the field in a formal classroom set up, awarding diplomas after conducting formal evaluation/tests. These factual findings when considered along with the ratio laid down by the Hon’ble Supreme Court, establishes that the primary contention of the revenue cannot be sustained.
The Tribunal further noted that the revenue contended that assessee had not being affiliated and that courses were conducted for short duration as a reason for denying the claim of exemption under section 11 to the assessee.
The Tribunal observed that Hon’ble Delhi High Court held that affiliation to an university cannot be considered as a reason to hold an institute as not imparting education, if the institute is otherwise run like any school or educational institution in a systemic manner with regular classes, vacations, attendance requirements, enforcement of discipline and so on. Similar view was held by the Hon’ble Gujarat High Court.
The Tribunal held that the objects of the assessee when considered in the light of the judicial precedence leads to conclusion that the assessee who was providing systematic instructions using a structured curriculum in a formal setting (timing, holiday, fees structure etc.) through professional faculty and providing certificate after proper evaluation is engaged in the activity of imparting “education” within the meaning of section 2(15) of the Act. Accordingly, the stand of the revenue that the assessee was not engaged in the charitable purpose of education to deny the benefit under section 11 cannot be sustained.
Download Full Judgment Click Here >>
- Imparting education in gemmology, jewellery arts, designs qualifies for exemption u/s 11
- Special procedure under Delhi GST Act for rectification of order for wrong ITC availment
- CBDT specifies work allocations and zonal charges of its members
- AO can’t make addition on his speculation and assumption of manipulation in share prices
- Assesee not deducting TDS due to stay by High Court can’t be treated as assessee in default
