By TIOL News Service

PUNE, DEC 04, 2015: THE issue is - Whether beneficial provisions of Sec 80E mandate that higher education is to be pursued only in India and not in foreign university. NO is the answer.

Facts of the case

The assessee is an individual. During assessment, the AO noticed that the assessee had claimed deduction u/s 80E, which was disallowed on the ground that the same was 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 was taking higher education in United States of America which was not recognised by any of the authorities mentioned in section 80E(3)(c), therefore, the assessee was not entitled to claim the education. On appeal, the CIT(A) concluded that there was no evidence to suggest that assessee's son was pursuing higher education and also he had not even given name or program undertaken by his son in any of the authorised University or Institute and no details were furnished about the higher education of the son of the assessee. Thus, upheld the order of the AO.

The Tribunal held that,

++ we find the AO 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 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. Nowhere the section provides that the higher education should be taken in India only and not abroad;

++ we find merit in the submission of the Counsel for the assessee that there is no such stipulation u/s.80E 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 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.

(See 2015-TIOL-1979-ITAT-PUNE)