Imparting Skill Development Is Akin To Providing Education, Eligible For Section 12AA Registration: ITAT

The appellant/assessee, C.R. Dadhich Memorial Society was established under the Haryana Registration and Regulation of Societies Act, 2012 on 02.03.2016. The objective of the society was to render efficient services to the nation and to take over, establish, run, and manage teacher training institutions. The assessee provides other facilities to meet the requirements of educational institutions in general and for handicapped and distressed people in particular. In affiliation with the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), the assessee operates a skill development training center.

The assessee applied for registration under section 12AA of the Income Tax Act, 1961 on 27.07.2017, which was rejected on 31.01.2018. The order rejected the application by stating that imparting skills development is not covered under the charitable activities mentioned under section 2(15) of the Income Tax Act.

After the rejection, the assessee applied again for registration under section 12A of the Income Tax Act, 1961 and duly replied to all the queries raised by the CIT (E), Chandigarh. The application was rejected under section 12AA. The CIT (E) in the order stated that imparting skill development training does not partake in the meaning of public charity.

The ITAT noted that training constitutes a basic concept in human resource development. It is concerned with developing a particular skill to a desired standard through instruction and practice. Training is a highly useful tool that can bring a person into a position where they can do their job correctly, effectively, and conscientiously. Training is the act of increasing the knowledge and skills of a person to do a particular job. Under the scheme, the assessee with the Ministry of Skill Development & Entrepreneurship (MSDE) affiliation has provided training to Indian youths and falls under the category of Education and Advancement.

The ITAT relied on the decision of ITAT Delhi in the case of Process-cum-product Development Centre Versus Addl. CIT. It was held that the word "education" is to be given a wide interpretation, which includes training and developing the knowledge, skills, mind, and character of the students through normal schooling.

Case Title: C. R. Dadhich Memorial Society Versus CIT(E)

Citation: ITA No. 6281/Del/2019

Dated: 27.06.2022

Counsel For Appellant: CA Mukesh Jain, CA Sahil Gupta

Counsel For Respondent: CIT DR Mahesh Shah

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