A trust engaged in educational activities but failing to meet the definition of "education" : No registration under Section 12AB.
Income Tax Tribunal Upholds Rejection of Registration for Agastya Gurukulam Trust, Tribunal Rules Trust's Educational Activities Fail to Meet Legal Definition Under Income Tax Act
The Income Tax Appellate Tribunal (ITAT) 'A' Bench in Chennai has dismissed the appeals filed by M/s Agastya Gurukulam Public Charitable Trust against the rejection of their application for registration under Section 12AB of the Income Tax Act, 1961. The tribunal, comprising Judicial Member Shri S.S Viswanethra Ravi and Accountant Member Shri Ratnesh Nandan Sahay, upheld the decision of the Commissioner of Income Tax (Exemptions), Chennai, citing failure to meet the statutory definition of "education" as interpreted by the Supreme Court.
M/s Agastya Gurukulam Public Charitable Trust had applied for registration under Section 12AB, claiming to engage in educational and charitable activities. However, the CIT(E) concluded that the trust's activities did not align with the restricted definition of "education" as outlined in Section 2(15) of the Income Tax Act. The tribunal noted that the trust did not provide formal scholastic learning or a systematic curriculum necessary to qualify as an educational institution under the act.
In its decision dated September 26, 2025, the tribunal referred to landmark Supreme Court rulings, including Sole Trustee, LokaShikshana Trust v. CIT and New Noble Educational Society v. CCIT, to emphasize the narrow interpretation of "education" under the Income Tax Act. The tribunal highlighted that education, for tax exemption purposes, must involve systematic instruction, schooling, or training in preparation for life, and not merely any form of knowledge acquisition.
The tribunal also pointed out the lack of recognition from recognized educational authorities such as CBSE or State Boards, which further invalidated the trust's claim to educational status. Despite the trust's argument of being registered with the National Institute of Open Schooling (NIOS), the tribunal found that the trust's activities did not conform to the prescribed educational standards.
The tribunal's decision reinforces the judiciary's stance on maintaining a stringent interpretation of educational and charitable activities under tax laws, ensuring that only entities meeting specific criteria benefit from tax exemptions.
Bottom Line:
Registration under Section 12AB - A trust engaged in educational activities but failing to meet the definition of "education" under Section 2(15) of the Income Tax Act, 1961 as interpreted by the Supreme Court cannot be granted registration under Section 12AB.
Statutory provision(s): Section 2(15), Section 12AB, Income Tax Act, 1961
