I.t.appeal Nos. 183 & 184 Of 2011 v. I.t.appeal Nos. 183 & 184 Of 2011

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HON'BLE MR. JUSTICE BABU MATHEW P.JOSEPH THURSDAY, THE 16TH DAY OF FEBRUARY 2012/27TH MAGHA 1933 ITA.No. 183 of 2011 ( ) --------------------------------- ITA.384/2009 of I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/RESPONDENT: -------------------------------------- THE COMMISSIONER OF INCOME TAX,THIRUVANANTHAPURAM BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENTAPPELLANT: -------------------------------------- ST.MARY'S MALANKARA SEMINARY,NALANCHIRA.P.O., TRIVANDRUM-695015. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 16-02-2012,ALONG WITH 184/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: AS ITA.NO.183/2011 APPENDIX PETITIONER(S) EXHIBITS: ANNEXURE A: COPY OF THE ORDER U/S 143 (3) OF THE INCOME TAX ACT DT.24.03.2006 ANNEXURE B: COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DT.10.10.2006. ANNEXURE C:COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DT.25.04.2007. ANNEXURE D:COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DT.23.03.2009. ANNEXURE E:COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DT.10.03.2011. RESPONDENT'S EXHIBITS:NIL /TRUE COPY/ P.A.TO JUDGE C.N. RAMACHANDRAN NAIR&BABU MATHEW P. JOSEPH, JJ. ---------------------------------------------------- I.T. Appeal Nos. 183 & 184 OF 2011 ----------------------------------------------------- ## Dated this the 16[th] day of February, 2012 J U D G M E N T Ramachandran Nair, J The question raised in these connected appeals filedby the Revenue against the very same assessee is whetherthe Tribunal was justified in holding that a “Seminary”teaching students for priesthood is an educationalinstitution entitled to exemption from tax u/s 10(23C)(iiiad)of the Income Tax Act. One additional question raised iswhether the Tribunal was justified in holding that therespondent was entitled to claim exemption u/s 10(23C)(iiiad) for the first time at the appellate stage. We haveheard the learned Standing Counsel appearing for theappellant and we have also gone through the orders of theTribunal. I.T.Appeal Nos. 183 & 184 OF 2011 :2 : 2.The first question raised is whether a seminarycoaching and training students for priesthood is aneducational institution as referred to in the above provisionof the I.T. Act. Educational institution is not defined underthe I.T.Act. Therefore, for ascertaining the scope andmeaning of “Educational Institution” the Tribunal referredto various decisions, particularly the decision of theAllahabad High Court in City Montessori School(Regd.)v. Union of India and others reported in (2009) 315ITR 48(All) wherein the Court held that education meansinstruction, schooling or training given to the young inpreparation for the work of life. On the facts, there can beno controversy because training for priesthood involvesextensive coaching in religious studies making a person fitto perform the duties of the priest which is a profession.Seminary, in this case is run by Malankara Catholic Churchat Thiruvananthapuram where several students undergo I.T.Appeal Nos. 183 & 184 OF 2011 :3 : I.T.Appeal Nos. 183 & 184 OF 2011 :3 : coaching and training for priesthood. Freedom to practiceand propagate religion is a right conferred under Article25 of the Constitution. Propagation of religion necessarilyinvolves education and training of young generation onreligious matters and unless the same is systematicallydone religious beliefs and practices cannot be carried tofuture generations. Therefore religious teaching is a rightrecognized under the Constitution. A person admitted toseminary takes as much as about 10 years to become aqualified priest and the long duration by itself reveals theextensive coaching and training required to become apriest who is a religious practitioner. So much so, therecannot be any controversy that religious teaching is alsoeducation within the meaning of the term contained in S.10(23C)(iiiad) of the I.T.Act. 3.It is well known that 'theology' is a subjecttaught in western universities and degrees and even Ph.Ds. I.T.Appeal Nos. 183 & 184 OF 2011 :4 : are awarded in 'theology' by several Universities inEurope. There is nothing to indicate that S.10(23C)(iiiad),requires the educational institutions referred to therein toimpart education in any particular subject or in anymanner whatsoever. So much so, the term 'education'should enjoy a wide connotation covering all kinds ofcoaching and training carried on in a systematic mannerleading to personality development of an individual. In thecase of seminary, students on completion of their studiesare made priests who head the churches as religiousleaders practising and propagating religion as aprofession. So much so, we hold that religious teaching inthe seminary is also education and seminary is thereforean “educational institution” entitled for exemption u/s 10(23C)(iiiad) of the I.T.Act. 4.The next question raised is whether therespondent admittedly a religious institution which is I.T.Appeal Nos. 183 & 184 OF 2011 :5 : entitled to exemption from tax u/s 11 of the I.T.Act, canclaim benefit of exemption under S.10(23C)(iiiad). In thiscase for want of registration u/s 12A, the respondentforfeited their claim for exemption u/s 11 of the Act. Whenthis happened at the assessment stage, respondent raisedan alternate claim for exemption u/s 10(23C)(iiiad) beforethe first appellate authority who though allowed the claimfirst, recalled it later. However, in second appeal theTribunal allowed the claim on merits which is contested bythe Revenue in this appeal. 5.The Hon'ble Supreme Court inNational Thermal Power Co. Ltd. v. Commissioner of IncomeTax. 229 ITR 383 held that a pure question of law can beraised at any stage of the proceedings under the I.T. Act.The ground raised in appeal by the assessee based on 10(23C)(iiiad) is certainly a pure question of law and on thesame facts the issue was found in favour of the respondent. I.T.Appeal Nos. 183 & 184 OF 2011 :6 : So much so, we feel respondent was rightly found to beeligible to raise the additional and alternate ground ofexemption which was found in their favour. We, therefore,answer both the questions in favour of the respondent anddismiss both the appeals. Sd/-C.N. RAMACHANDRAN NAIR,JUDGE. ul/- Sd/- BABU MATHEW P. JOSEPH,JUDGE. [True copy] P.S. to Judge.