ORDER
R.K. Panda, Accountant Member - This appeal filed by the assessee is directed against the order dated 04-12-2013 of the CIT(A)-IT/TP, Pune relating to Assessment Year 2009-10.
2. Denial of deduction of Rs. 73,125/- u/s.80E of the I.T. Act by the Assessing Officer and upheld by the CIT(A) is the only issue raised by the assessee in the grounds of appeal.
3. Facts of the case, in brief, are that the assessee is an individual and filed his return of income declaring total income at Rs. 61,03,220/-. During the course of assessment proceedings, the Assessing Officer asked the assessee to explain as to why the deduction claimed u/s.80E amounting to Rs. 73,125/- should not be disallowed since the same is allowable only in case of higher education pursued in Indian Educational Institutes duly authorised in India and not for higher education pursued in abroad or Foreign Educational Institutes. Since the assessee's son is taking higher education (MS Electrical Engineering) in Washington, United States of America which is not recognised by any of the authorities mentioned in section 80E(3)(c) of the I.T. Act, therefore, the assessee is not entitled to claim the deduction. It was argued that nowhere in the Act it is mentioned that the education should be taken in India only. Rejecting the explanation given by the assessee the Assessing Officer disallowed the claim of deduction u/s.80E amounting to Rs.73,125/- on the ground that the educational institute is not authorised by any of the authorities as mentioned in section 80E(3)(c) of the I.T. Act.
4. Before CIT(A) it was submitted that the son of the assessee is taking higher education in Washington, United States of America and nowhere in the provisions it is mentioned that the Education should be taken in India only for claiming deduction u/s.80E.
5. However, the Ld.CIT(A) also was not satisfied with the explanation given by the assessee. He referred to the provisions of section 80E(3)(c) which reads as under :
"higher education" means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or Local authority or by any authority authorized by the Central Government or State Government or Local authority to do so".
6. He observed that the assessee has not furnished any evidence that the University where his son is undertaking education is approved either by the Central Govt. or by any other authority authorised for this purpose. Secondly and more importantly, there is no evidence to suggest that he is pursuing higher education. The assessee has not even given name or program undertaken by his son in any of the authorised University or Institute and no details are furnished about the higher education of the son of the assessee. He accordingly confirmed the disallowance of deduction claimed u/s.80E amounting to Rs.73,125/-.
7. Aggrieved with such order of the CIT(A) the assessee is in appeal before us.
8. The Ld. Counsel for the assessee strongly opposed the order of the CIT(A). Referring to the provisions of section 80E the Ld. Counsel for the assessee submitted that both the lower authorities have failed to read the provisions in proper perspective. He submitted that the Assessing Officer in his order has given a finding that the assessee's son is taking higher education, i.e. MS Electrical Engineering in Washington, United States of America which according to him is not recognised by any of the authorities mentioned in section 80E(3)(c) of the I.T. Act. However, as per the requirement of the said section, it is any course of studies pursued after passing the Senior Secondary or its equivalent from any University or Board recognised by the Central Govt. He submitted that the Ld.CIT(A) confirmed the disallowance altogether on different ground. According to him the assessee has not furnished any evidence that the institution in which the assessee's son was taking education was an approved one by the Government and further there is no evidence that the assessee's son is pursuing any higher education. Referring to the Paper book, he drew the attention of the Bench the certificate issued by the George Washington University, Washington awarding the degree of Master of Science, Electrical Engineering to Rounak Nitin Muthiyan. He submitted that the son of the assessee has gone to U.S. for higher studies after completing his Bachelor of Engineering in Electronics & Telecommunication Branch from University of Pune. He submitted that since the Assessing Officer has already given a categorical finding about the higher education taken by the son of the assessee, therefore, the observation made by the CIT(A) are mere surmises. He submitted that there is no stipulation u/s.80E of the I.T. Act that the education should be in India only. If the legislature has such an intention it would have been definitely and specifically mentioned as it had been mentioned in section 11 of the I.T. Act which provided that any income from property held for charitable purposes are exempt from tax u/s.11(1)(a) only to the extent it is applied in India. Had the legislature wanted education in India itself for availing of the deduction, the legislature would have specifically stated so in the section itself. Referring to various decisions he submitted that when the section has not imposed any condition about education in India, the deduction as claimed by the assessee should not be disallowed.
9. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A).
10. We have considered rival argument made by both the sides. The payment of interest on loan is not in dispute. The dispute is only regarding allowability of the interest u/s.80E of the I.T. Act. We find the provisions of section 80E are as under :
"80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative.
(2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest referred to in sub-section (1) is paid by the assessee in full, whichever is earlier.
(3) For the purposes of this section,—
(a) "approved charitable institution" means an institution specified in, or, as the case may be, an institution established for charitable purposes and approved by the prescribed authority under clause (23C) of section 10 or an institution referred to in clause (a) of sub-section (2) of section 80G;
(b) "financial institution" means a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); or any other financial institution which the Central Government may, by notification in the Official Gazette, specify in this behalf;
(c) "higher education" means any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, board or university recognised by the Central Government or State Government or local authority or by any other authority authorised by the Central Government or State Government or local authority to do so;
(d) "initial assessment year" means the assessment year relevant to the previous year, in which the assessee starts paying the interest on the loan;
(e) "relative", in relation to an individual, means the spouse and children of that individual or the student for whom the individual is the legal guardian."
11. We find the Assessing Officer in the instant case denied the deduction claimed u/s.80E on the ground that the same is allowably only in case of Indian Educational Institutes which are authorised in India and naturally not for Abroad or Foreign education institutes. We find the Ld.CIT(A) went a step further and held that the assessee has not furnished any evidence that the university where his son is undertaking education is approved either by the Central Govt. or by any other authority authorised for this purpose and the assessee has not given the name of the course or program undertaken by his son in any of the university or institute.
12. So far as the objections of the Ld.CIT(A) are concerned, we find the Assessing Officer has categorically mentioned in the assessment order that the assessee's son is taking higher education (MS Electrical Engineering) in Washington, United States of America. The assessee has placed the certificate from University of Pune as well as certificate from the George Washington University which conclusively prove the nature of course, year etc. Therefore, the observation of Ld.CIT(A) that assessee has not even given name or program undertaken by his son and no details are furnished is without any merit. Further, this course definitely cannot be pursued unless a student completes his senior secondary examination or its equivalent. No where the section provides that the higher education should be taken in India only and not abroad.
13. We find merit in the submission of the Ld. Counsel for the assessee that there is no such stipulation u/s.80E of the I.T. Act that the education should be in India only. Had there been such an intention by the legislature it would have been definitely and specifically mentioned as had been mentioned in section 11 of the I.T. Act which provides that any income or property held for charitable purposes is exempt from tax u/s.11(1)(a) only to the extent it is applied in India. Therefore, if the legislature wanted education in India itself for availing of the deduction, the legislature would have specifically stated so in the section itself. Since the son of the assessee is pursuing his MS Electrical Engineering in Washington, United States of America after completing his Secondary Education examination or its equivalent and since the interest expenditure is not in dispute, therefore, we do not find any reason as to why the assessee shall not get the benefit of deduction u/s.80E of the I.T. Act. In this view of the matter, we set aside the order of the CIT(A) and direct the Assessing Officer to allow the deduction u/s.80E of the I.T. Act. The appeal filed by the assessee is accordingly allowed.
14. In the result, the appeal filed by the assessee is allowed.
VARSHA