THE COMMISSIONER OF INCOME TAX vs. ST.MARY'S MALANKARA SEMINARY

The first question raised is whether a seminary coaching and training students for priesthood is an educational institution as referred to in the above provision of the I.T. Act. Educational institution is not defined under the I.T.Act. Therefore, for ascertaining the scope and meaning of “Educational Institution” the Tribunal referred to various decisions, particularly the decision of the Allahabad High Court in City Montessori School(Regd.) v. Union of India and others reported in (2009) 315 ITR 48(All) wherein the Court held that education means instruction, schooling or training given to the young in preparation for the work of life. On the facts, there can be no controversy because training for priesthood involves extensive coaching in religious studies making a person fit to perform the duties of the priest which is a profession. Seminary, in this case is run by Malankara Catholic Church at Thiruvananthapuram where several students undergo :3 : coaching and training for priesthood. Freedom to practice and propagate religion is a right conferred under Article 25 of the Constitution. Propagation of religion necessarily involves education and training of young generation on religious matters and unless the same is systematically done religious beliefs and practices cannot be carried to future generations. Therefore religious teaching is a right recognized under the Constitution. A person admitted to seminary takes as much as about 10 years to become a qualified priest and the long duration by itself reveals the extensive coaching and training required to become a priest who is a religious practitioner. So much so, there cannot be any controversy that religious teaching is also education within the meaning of the term contained in S.10 (23C)(iiiad) of the I.T.Act.

It is well known that 'theology' is a subject taught in western universities and degrees and even Ph.Ds.

The next question raised is whether the respondent admittedly a religious institution which is :5 : entitled to exemption from tax u/s 11 of the I.T.Act, can claim benefit of exemption under S.10(23C)(iiiad). In this case for want of registration u/s 12A, the respondent forfeited their claim for exemption u/s 11 of the Act. When this happened at the assessment stage, respondent raised an alternate claim for exemption u/s 10(23C)(iiiad) before the first appellate authority who though allowed the claim first, recalled it later. However, in second appeal the Tribunal allowed the claim on merits which is contested by the Revenue in this appeal.

The Hon'ble Supreme Court in National Thermal Power Co. Ltd. v. Commissioner of Income Tax. 229 ITR 383 held that a pure question of law can be raised 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 the same facts the issue was found in favour of the respondent.