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Informist, Friday, Jul 26, 2024

 

NEW DELHI – The Delhi High Court today upheld an order by the Income Tax Appellate Tribunal to grant income tax exemptions to NIIT Foundation for undertaking education activities for charitable purposes. 

 

The high court said that the tribunal correctly found in favour of NIIT Foundation when it held that affiliation with and recognition by a regulatory authority were not essential attributes of education under Section 2(15) of the Income Tax Act, 1961. NIIT Foundation was also able to establish beyond doubt that the courses run by it were informed by a fixed curriculum and attendance criteria and thus fulfilling all essential ingredients of formal education. 

 

The court also noted the tribunal's finding that the corporate receipts to NIIT Foundation were mainly flowing from the corporate social responsibility obligations of the concerned business houses and could not possibly be viewed or characterised as aimed at profiteering. The court added that the corporate donations were asserted to have been utilised solely for the purposes of the educational activities which were undertaken by NIIT Foundation, a non-profit educational society founded by the promoters of NIIT Ltd. 

 

In the assessment year 2014-15 (Apr-Mar), NIIT Foundation had filed its return of income declaring its taxable income as nil. After scrutiny of NIIT Foundation's assessment, the assessing officer acknowledged the charitable nature of educational activities undertaken by it. However, Commissioner of Income Tax (Exemptions), Delhi doubted the correctness of the view taken by the assessing officer and issued a showcause notice to NIIT Foundation in 2018.

 

Thereafter, the commissioner set aside the assessment by the assessing officer as erroneous and held that NIIT Foundation was rendering services for profit and was not engaged in any educational or charitable activity as contemplated in Section 2 (15) of the income tax law. Consequently, a fresh assessment order came to be passed against NIIT Foundation. In 2020, the tribunal set aside the fresh assessment order to which the commissioner of income tax moved the high court.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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