[Opinion] Science Museum’s Exemption Goes Up in Smoke

Meenakshi Subramaniam – [2023] 151 taxmann.com 455 (Article)

One man, fed up with his science museum being refused income tax exemption said to friend:

“I will build a space museum.”

The friend asked:

“Would that fetch exemption ?”

The man said:

“In the space museum, I would just have rooms, empty and full of space.” !!!

The Gujarat Council of Science City’s museum, recently, lost income tax exemption, in a saddening judgment. It was held that no education under Section 2(15) was being imparted and the science museum was only going for profits.

(2023) 150 taxmann.com 310
Income Tax Appellate Tribunal – Ahmedabad
DCIT(Exemptions)
v.
Gujarat Council of Science City

Order

The issue involved in the appeal was whether the assessee is carrying out activities qualifying as being “charitable” in terms of section 2(15) of the Act so as to entitle it to claim exemption of its income u/s 11/12 of the Act.

The Assessing Officer(AO) held that the assessee was carrying out activity of “general public utility” as defined under section 2(15) of the Act, and since the activity was carried out in the form of trade, commerce and business, the first proviso to section 2(15) of the Act was attracted, disqualifying it as charitable activity, thus in turn disentitling its claim to exemption of income under section 11 of Act. The Ld. CIT(A), on the other hand disagreeing with the AO held that the activity carried out by the assessee qualified as “education”, in terms of section 2(15) of the Act, thus entitling the assessee to claim exemption under section 11 of the Act.

According to assessee, the “Gujarat Council of Science city is registered under the Societies Registration Act for Advancement and promotion of science and Technology and dissemination of information relating to science &Technology by developing science city project. The state, central and other Govt. departments provided grants for capital expenditure and science promotional activities. The assessee trust has been granted registration u/s. 12A(aa) of the I.T.Act.

The aims and objects as outlined in the memorandum of association were as under:

To promote, co-ordinate and exhibits interaction of science, technology, energy and environment with human life through personal experience-bases presentation.

To design, develop or undertake Exhibitions and demonstration or Equipments and educational technology

To organize or to assist in organizing training course, workshops, seminars, conferences, discussions, dissertation, consultancy services and exhibitions, independently or in association with other agencies

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