Unity Technical Institute Society, Lucknow V. DCIT, Lucknow

ITA 104/LKW/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54810 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-10-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 04-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Assessee Lawyers: K R RASTOGI
• Keywords: Benefit of exemption
• Section: 133A; 12A; 148; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S. K. YADAV , JUDICIAL MEMBER AND SHRI B. R. JAIN , ACCOUNTANT MEMBER ITA NO S . 104 TO 107/LKW/2011 ASSESSMENT YEAR S : 2002 - 03 TO 2005 - 06 UNITY TECHNICAL INSTITUTE SOCIETY 178/152 - B, B.N. ROAD, GOLAGANJ LUCKNOW V. DCIT, RANGE V LUCKNOW PAN: AAATU2624A (APPELLANT) (RESPONDENT) ITA NO. 103/LKW/2011 ASSESSMENT YEAR S : 2004 - 05 DCIT, RANGE V LUCKNOW V. UNITY TECHNICAL INSTITUTE SOCIETY 178/152 - B, B.N. ROAD, GOLAGANJ LUCKNOW (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI. K. R. RASTOGI, C.A. DEPARTMENT BY: SHRI. R. K. RAM, SR. D.R. DATE OF HEARING: 03.10.11 DATE OF PRONOUNCEMENT: 05.10.11 O R D E R PER S. K. YADAV : THESE APPEALS ARE PREFERRED BY THE ASSESSEE AS WE LL AS THE REVENUE AGAINST THE RESPECTIVE ORDER OF THE LD. CIT(A) FOR DIFFERENT ASSESSMENT YEARS. THE ASSESSEE HAS PREFERRED APPEALS FOR ASSESSMENT : - 2 - : YEARS 2002 - 03 TO 2005 - 06 AND THE REVENUE HAS FILED ONLY ONE APPEAL AGAINST THE ORDER OF THE LD. CIT(A) PERTA INING TO ASSESSMENT YEAR 2004 - 05. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, WE HEARD THESE APPEALS TOGETHER AND ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORDER. WE, HOWEVER, PREFER TO ADJUDICATE THEM ONE AFTER THE OTHER. ITA NOS.104 TO 106 /LKW/2011: 2. IN THESE APPEALS THE MAIN GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO THE DENIAL OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO IN SHORT AS THE ACT). 3. THE FACTS IN BRIEF RELATING TO THE IMPUGNED ISSUE IN ASSESSMENT YEAR 2002 - 03 ARE THAT THE ASSESSEE IS AN EDUCATIONAL SOCIETY AND CONDUCTING COURSES OF LLB AND BBA WHICH ARE DULY AFFILIATED WITH LUCKNOW UNIVERSITY AND FAIZABAD UNIVERSITY RESPECTIVELY. DURING THE COURS E OF SURVEY, IT WAS FOUND THAT T HE ASSESSEE WAS RUNNING THE COURSES OF BBA, B.ED AND LLB (5 YEARS COURSES) AND ALSO GOT ITS ACCOUNT AUDITED BY THE CHARTERED ACCOUNTANT FOR FINANCIAL YEARS 2001 - 02 TO 2007 - 08. DURING THE COURSE OF SURVEY, THE STATEMENT OF SHRI. MURTAZA HUSAIN, SECRETARY O F THE ASSESSEE - SOCIETY WAS RECORDED UNDER SECTION 133A OF THE ACT IN WHICH HE HAS ADMITTED THAT NO RETURN OF INCOME WAS FILED BY THE ASSESSEE ON THE PRESUMPTION THAT NO INCOME TAX IS PAYABLE ON THE EDUCATIONAL INSTITUTION. FURTHER HE WAS CONFRONTED WITH T HE DISCREPANCIES NOTICED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE - SOCIETY. HE REPLIED THAT HE IS HAVING NO KNOWLEDGE OF THE ACCOUNTS AND THE MISTAKES HAVE BEEN OCCURRED BECAUSE OF INCORRECT ADVICE OF THE CHARTERED ACCOUNTANT OF THE ASSESSEE - SOCIETY. MOREO VER, IN HIS SWORN STATEMENT, HE HAS DECLARED TOTAL INCOME OF ` 2.5 CRORES FOR ASSESSMENT YEARS 2005 - 06 TO 2008 - 09 AND PROMISED TO PAY THE DUE TAX BY FEBRUARY 2009. ON THE BASIS OF THESE INFORMATIONS, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT WHICH WAS SERVED UPON THE : - 3 - : ASSESSEE AND IN RESPONSE THERETO RETURN OF INCOME DECLARING NIL INCOME WAS FILED ON 31.8.2009 ALTHOUGH THE EXCESS OF INCOME OVER EXPENDITURE IS SHOWN AT ` 9,81,830 IN THE INCOME AND EXPENDITURE ACCOUNT AS ON 31.3.2002 FILE D ALONG WITH THE RETURN OF INCOME. THE ASSESSING OFFICER HAS NOT ACCEPTED THE CLAIM OF THE ASSESSEE REGARDING ITS CHARITABLE STATUS AND ASSESSED ITS INCOME IN THE STATUS OF AOP. 4. AGGRIEVED , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) CHALLENGING THE REOPENIN G OF ASSESSMENT UNDER SECTION 148 OF THE ACT AND ALSO THE QUANTUM ASS ESSMENT ON THE GROUND THAT THE ASSESSING OFFICER HAS IGNORED THE PROVISIONS OF SECTION 10(23C)(IIIAD) OF THE ACT. IT WAS ALSO CONTENDED BEFORE THE LD. CIT(A) THAT REGISTRATI ON UNDER SECTION 12A OF THE ACT IS NOT NECESSARY FOR ALLOWING EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT AS THE GROSS RECEIPTS OF THE INSTITUTION IS BELOW ` 1 CRORE AND THE ASSESSEE - SOCIETY BEING AN EDUCATIONAL INSTITUTION WAS EXISTED SOLELY FOR EDUC ATION AL PURPOSE . HENCE, THE ENTIRE SURPLUS IS EXEMPT ED UNDER SECTION 10(23C)(IIIAD) OF THE ACT . THE LD. CIT(A) HAS EXAMINED THIS ISSUE IN THE LIGHT OF THE ASSESSEES CONTENTION, BUT WAS NOT CONVINCED WITH IT AND CONFIRMED THE ORDER OF THE ASSESSING OFFIC ER AFTER HOLDING THAT ON THE BASIS OF THE FACTS, IT CANNOT BE SAID THAT ALL THE RECEIPTS HAVE BEEN UTILIZED WHOLLY AND FULLY FOR EDUCATIONAL PURPOSES. WHILE HOLDING SO, THE LD. CIT(A) H AS ALSO OBSERVED IN HIS ORDER THAT THE ASSESSEE HAS NOT F URNISHED EVEN A SINGLE EVIDENCE/DETAIL SHOWING THAT THE RECEIPTS HAVE BEEN APPLIED FOR CHARITABLE ACTIVITIES AND/OR RELIGIOUS PURPOSES. HE HAS ALSO NOTICED FROM THE INCOME AND EXPENDITURE ACCOUNT FOR ASSESSMENT YEAR 2002 - 03 THAT EXCESS OF INCOME OVER EXPENDITURE OF ` 9 ,81,830 HAVE BEEN TRANSFERRED TO THE GENERAL FUND AND IN THE PROJECTED INCOME AND EXPENDITURE ACCOUNT , WHICH WAS FOUND DURING THE COURSE OF SURVEY, THE EXCESS OF INCOME OVER EXPENDITURE WAS OF ` 5,83,785. THE LD. CIT(A) HAS ALSO NOTED IN HIS ORDER THAT IN THE : - 4 - : PROJECTED INCOME AND EXPENDITURE ACCOUNT THE PAYMENT OF SALARY TO STAFF WAS SHOWN AT ` 10,04,058 WHEREAS IN THE INCOME AND EXPENDITURE ACCOUNT FILED ALONG WITH THE RETURN, THE PAYMENT OF SALARY TO STAFF HAS BEEN SHOWN AT ` 6,61,997. THE DIFFERENCE IN TH ESE FIGURES W AS NOT PROPERLY EXPLAINED BY THE ASSESSEE. RELYING UPON THESE OBSERVATIONS, THE LD. CIT(A) TURNED DOWN THE REQUEST OF THE ASSESSEE FOR GRANTING EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT. 5. SIMILAR WAS THE POSITION WITH RESPECT TO OTHER ASSESSMENT YEARS I.E. UPTO ASSESSMENT YEAR 2004 - 05 IN WHICH THE ASSESSEE - SOCIETY HAS CLAIMED BENEFIT OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT. 6. AGGRIEVED, THE ASSESSEE HAS PREFERRED APPEALS BEFORE THE TRIBUNAL. 7. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO CERTAIN FACTS THAT INITIALLY REGISTRATION UNDER SECTION 12A OF THE ACT WAS REJECTED BY THE LD. COMMISSIONER OF INCOME - TAX BUT THEREAFTER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 28.5.2009 SET ASIDE THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX II AND RESTORED THE ISSUE BACK TO HIS FILE TO ADJUDICATE UPON THE ISSUE AFRESH IN ACCORDANCE WITH LAW. CONSEQUENTLY, VIDE ORDER DATED 21.7.2011 , THE LD. CO MMISSIONER OF INCOME - TAX GRANTED REGISTRATION UNDER SECTION 12A OF THE ACT TO THE ASSESSEE - SOCIETY BY HOLDING THAT PROVISIONS OF SECTION 11 AND 12 OF THE ACT WOULD APPLY IN RELATION TO THE INCOME OF THE ASSESSEE - SOCIETY FROM ASSESSMENT YEAR 2002 - 03. SINCE THE ORDER GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT WAS PASSED ON 21.7.2011, THE LD. CIT(A) HAS ADJUDICATED UPON THE ISSUE WITHOUT HAVING THE BENEFIT WITH THIS ORDER OF THE LD. COMMISSIONER AND HAS ADJUDICATED UPON THE ISSUE ONLY WITH REGARD TO T HE BENEFIT OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT DURING ASSESSMENT YEARS 2002 - 03 TO 2004 - 05, THE GROSS : - 5 - : RECEIPTS IN THE HANDS OF THE ASSESSEE WERE ADMITTEDLY BELOW ` 1 CRORE, THEREF ORE, THE ASSESSEE IS ENTITLED FOR BENEFIT OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT EVEN IN THE ABSENCE OF BENEFIT OF PROVISIONS OF SECTION 11 AND 12 OF THE ACT. 8. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT FOR CLAIMING BENEFIT OF E XEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT REGISTRATION UNDER SECTION 12A OF THE ACT IS NOT REQUIRED. THE PROVISIONS OF SECTION 10(23C)(IIIAD) OF THE ACT ARE TO BE EXAMINED INDEPENDENTLY AND IN ORDER TO ALLOW BENEFIT OF EXEMPTION UNDER THIS PROVISIO N, THE ASSESSEE IS ONLY REQUIRED TO ESTABLISH THAT ITS GROSS RECEIPTS ARE LESS THAN ` 1 CRORE AND IT WAS APPLIED FOR THE EDUCATIONAL PURPOSES ONLY AND THE EDUCATIONAL INSTITUTION O R THE UNIVERSITIES A RE NOT SET UP FOR THE PURPOSE OF PROFIT. IN SUPPORT OF H IS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE PLACED A COPY OF THE AUDITED BALANCE SHEET, INCOME AND EXPENDITURE AND RECEIPTS & PAYMENTS. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE TRIBUNAL LUCKNOW BENCH IN THE CASE OF ITO V. VIRENDR A SINGH MEMORIA L SHIKSHA SAMITI, 18 DTR (LUCKNOW) (TRIB) 50 I N SUPPORT OF HIS CONTENTION THAT DISALLOWANCE OF CERTAIN EXPENSES CANNOT BECOME BASIS OF DENYING EXEMPTION UNDER SECTION 10(22)/ 10(23C)(IIIAD) OF THE ACT . HE HAS ALSO INVITED OUR ATTENTION TO THE DECISION OF T HE TRIBUNAL IN THE CASE OF AL FAROOK EDUCATIONAL CENTRE V. ITO, 124 TTJ (COCHIN) 286 IN SUPPORT OF HIS CONTENTION THAT THE CLAIM OF THE ASSESSEE BEING BACKED BY LAW CAN BE CONSIDERED EVEN AT THE APPELLATE STAGE. THEREFORE, THE FINDING OF THE LD. CIT(A) TH AT THE ASSESSEE HAS RAISED THIS PLEA FOR THE FIRST TIME CANNOT BE HELD TO BE VALID . THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE UPON THE DECISION IN THE CASE OF GAGAN EDUCATION AL SOCIETY V. ACIT, 56 DTR (AGRA) (TRIB) 199 IN SUPPORT OF HIS CO NTENTION THAT MERELY BECAUSE SURPLUS HAVE ARISEN TO THE ASSESSEE : - 6 - : DURING THE COURSE OF CARRYING ON THE EDUCATION AL ACTIVITY, IT CANNOT BE SAID THAT THE ASSESSEE IS NOT EXISTING FOR EDUCATIONAL PURPOSE. 9. THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT F OR QUALIFYING FOR BENEFIT UNDER SECTION 10(23C)(IIIAD) OF THE ACT , THE ASSESSEE IS REQUIRED TO ESTABLISH THAT THE EDUCATIONAL INSTITUTION WAS SET UP SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROFIT EVEN IF GROSS ANNUAL RECEIPTS DO NOT EXCE ED ` 1 CRORE. THE LD. D.R. FURTHER CONTENDED THAT THE LD. CIT(A) HAS GIVEN A SPECIFIC FINDING IN HIS ORDER THAT THE ASSESSEE HAS NOT PRODUCED THE RELEVANT EVIDENCE TO ESTABLISH THAT THE ASSESSEE - SOCIETY WAS EXISTED SOLELY FOR EDUCATIONAL PURPOSES AND THE G ROSS ANNUAL RECEIPT WAS ALSO UTILIZED SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROFIT. THE LD. CIT(A) HAS POINTED OUT VARIOUS DISCREPANCIES IN THE ACCOUNTS WHICH WERE NOT RECONCILED BY THE ASSESSEE. SINCE IT HAS NOT BEEN ESTABLISHED THA T THE ASSESSEE WAS EXISTED SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROFIT, BENEFIT OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT CANNOT BE ALLOWED TO IT. 10. HAVING GIVEN THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM THE CAREFUL PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT THE ASSESSING OFFICER HAS DENIED EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT TO THE ASSESSEE - SOCIETY FOR THE REASON THAT REGISTRATION UNDER SECTION 12A OF THE ACT WAS REFUSED BY THE LD. COMMISSIONER OF INCOME - TAX. BESIDES DENYING BENEFIT OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT, THE ASSESSING OFFICER HAS ALSO DISALLOWED PART OF EXPENDITURE ON AD - HOC BASIS. BEFORE THE LD. CIT(A), THE ASSESSEE HAS TAKEN AN ALTERNATIVE PLE A THAT EVEN IN THE ABSENCE OF REGISTRATION UNDER SECTION 12A OF THE ACT, THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT AS THE GROSS RECEIPT OF THE INSTITUTION IS BELOW ` 1 CRORE AND THE ASSESSEE BEING AN EDUCATIONAL INSTITUT ION IS EXISTED SOLELY FOR EDUCATION AL PURPOSES . THIS : - 7 - : CLAIM OF THE ASSESSEE WAS EXAMINED BY THE LD. CIT(A) IN THE LIGHT OF THE FACT THAT REGISTRATION UNDER SECTION 12A OF THE ACT WAS DENIED BY THE LD. COMMISSIONER OF INCOME - TAX. THE LD. CIT(A), HOWEVER, D ENIED BENEFIT OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT FOR THE REASON THAT CERTAIN DISCREPANCIES WERE FOUND IN THE INCOME AND EXPENDITURE ACCOUNT SEIZED DURING THE COURSE OF SURVEY AND FILED ALONG WITH RETURN OF INCOME. DURING THE COURSE OF HE ARING OF THE APPEAL, THE DISCREPANCIES NOTICED BY THE LD. CIT(A) WERE NOT DULY EXPLAINED. MOREOVER, THE LD. CIT(A) WAS ALSO OF THE VIEW THAT ALL THE RECEIPTS HAVE NOT BEEN UTILIZED SOLELY FOR THE EDUCATIONAL PURPOSES. THOUGH THE LD. CIT(A) HAS EXAMINED T HE APPLICABILITY OF PROVISIONS OF SECTION 12A AND SECTION 10(23C)(IIIAD) OF THE ACT, BUT WE ARE OF THE VIEW THAT BOTH THE PROVISIONS ARE INDEPENDENT AND CAN BE APPLIED INDEPENDENTLY. FOR GRANTING BENEFIT OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE AC T, IT IS NOT NECESSARY THAT THE ASSESSEE SHOULD GET REGISTRATION UNDER SECTION 12A OF THE ACT. THE OBJECTS AND PURPOSE FOR GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT ARE DIFFERENT THAN GRANT OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT. E XEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT CAN ONLY BE GRANTED TO THE INCOME RECEIVED BY ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROFIT IF THE AGGREGATE ANNUAL RECEIPTS OF SU CH UNIVERSITIES OR EDUCATIONAL INSTITUTION DOES NOT EXCEED THE AMOUNT OF ` 1 CRORE. BEFORE CLAIMING EXEMPTION UNDER THIS PROVISION, THE ONUS IS UPON THE ASSESSEE TO PROVE THAT THE UNIVERSITY OR EDUCATIONAL INSTITUTION WAS SET UP SOLELY FOR EDUCATIONAL PURP OSES AND NOT FOR THE PURPOSE OF PROFIT. THE OBJECTS OF THE EDUCATIONAL INSTITUTION CAN BE EXAMINED FROM ITS BALANCE SHEET AND INCOME AND EXPENDITURE ACCOUNT . IN THE INSTANT CASE, CERTAIN DISCREPANCIES WERE FOUND BY THE LD. CIT(A) WHICH WERE NOT PROPERLY RECONCILED BY THE ASSESSEE. FROM THE INCOME AND : - 8 - : E XPENDITURE ACCOUNT, EXCESS OF INCOME OVER THE EXPENDITURE WAS ALSO FOUND WHICH WAS TRANSFERRED TO GENERAL FUND , BUT IT IS NOT CLEAR FROM THE ORDERS OF THE AUTHORITIES BELOW AS TO HOW THE INCOME OVER EXPENDI TURE WAS UTILIZED BY THE ASSESSEE - SOCIETY. NO DOUBT THE ASSESSEE - SOCIETY WAS EXISTED FOR EDUCATIONAL PURPOSES BUT IT IS NOT CLEAR FROM THE MATERIALS AVAILABLE ON RECORD WHETHER ITS SOLE OBJECT WAS FOR EDUCATION AND NOT FOR THE PURPOSE OF PROFIT. THOUGH TH E GROSS ANNUAL RECEIPTS ARE LESS THAN ` 1 CRORE BUT THE OBJECT OF THE INSTITUTION IS TO BE EXAMINED WHETHER THE INSTITUTION EXISTS SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROFIT. WE HAVE ALSO EXAMINED THE JUDGMENT OF THE HON'BLE APEX COU RT IN THE CASE OF ADITANAR EDUCATIONAL INSTITUTION, ETC V. ACIT, 224 ITR 310 (SC) WHEREIN THEIR LORDSHIPS HAVE HELD T HE LANGUAGE OF SECTION 10(22) OF THE ACT IS PLAIN AND CLEAR AND THE AVAILABILITY OF THE EXEMPTION SHOULD BE EVALUATED EACH YEAR TO FIND OU T WHETHER THE INSTITUTION EXISTED DURING THE RELEVANT YEAR SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT. AFTER MEETING THE EXPENDITURE, IF ANY SURPLUS RESULTS INCIDENTALLY FROM THE ACTIVITY LAWFULLY CARRIED ON BY THE EDUCATIONAL INSTITUTI ON, IT WILL NOT CEASE TO BE ONE EXISTING SOLELY FOR EDUCATIONAL PURPOSES SINCE THE OBJECT IS NOT ONE TO MAKE PROFIT. THE DECISIVE OR ACID TEST IS WHETHER ON AN OVERALL VIEW OF THE MATTER, THE OBJECT IS TO MAKE PROFIT. IN EVALUATING OR APPRAISING THE ABOVE, ONE SHOULD ALSO BEAR IN MIND THE DISTINCTION/DIFFERENCE BETWEEN THE CORPUS, THE OBJECTS AND THE POWERS OF THE CONCERNED ENTITY . 11. WE HAVE ALSO EXAMINED THE VARIOUS CASE LAW REFERRED TO BY THE ASSESSEE IN WHICH IT HAS BEEN HELD THAT MERE DISALLOWANCE OF CER TAIN EXPENSES CANNOT BECOME BASIS OF DENYING EXEMPTION UNDER SECTION 1 0(22)/10(23C)(IIIAD) OF THE ACT. EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT IS ALLOWABLE EVEN IF SOME BENEFITS HAVE BEEN IMPARTED TO THE FOUNDER MEMBER OF THE ASSESSEE - SOCIETY FR OM THE INFLATED EXPENDITURE. : - 9 - : SINCE IN THE INSTANT CASE, THE COMPLETE DATAS OF ACCOUNTS ARE NOT AVAILABLE, WE ARE OF THE CONSIDERED OPINION THAT THIS ISSUE SHOULD BE RE - EXAMINED BY THE LD. CIT(A) IN THE LIGHT OF THE PROPER EXPLANATIONS OF THE ASSESSEE. WE , THEREFORE, SET ASIDE THE ORDERS OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE - EXAMINE THE CLAIM OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT IN THE LIGHT OF THE JUDGMENTS REFERRED TO ABOVE AND ALSO THE EXPLANATIONS T O BE FURNISHED BY THE ASSESSEE WITH REGARD TO THE DISCREPANCIES POINTED OUT IN THE ORDER OF THE LD. CIT(A). 12. THE OTHER GROUNDS IN THESE APPEALS RELATE TO THE AD - HOC DISALLOWANCES MADE BY THE ASSESSING OFFICER. IN THIS REGARD, NO ARGUMENT WAS ADVANCED BY TH E LD. COUNSEL FOR THE ASSESSEE. HOWE VER, WE HAVE EXAMINED THE ORDER OF THE LOWER AUTHORITIES BUT WE DO NOT FIND ANY INFIRMITY THEREIN. WE ACCORDINGLY CONFIRM THE ORDER OF THE LD. CIT(A). 13. ACCORDINGLY, THE APPEALS OF THE ASSESSEE STAND PARTLY ALLOWED FOR S TATISTICAL PURPOSES. ITA NO. 107/LKW/2011: 14. THOUGH THIS APPEAL WAS CHALLENGED ON SIMILAR GROUNDS, BUT DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE HAS ADMITTED THAT IN THIS YEAR THE GROSS RECEIPTS OF THE ASSESSEE - SOCIETY WERE MORE THAN ` 1 C RORE, THEREFORE, THE ASSESSEE - SOCIETY IS NOT ENTITLED FOR ANY EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS HOWEVER SUBMITTED THAT CONSEQUENT TO THE ORDER OF THE TRIBUNAL, THE LD. CIT HAS GRANTED REGISTRATION UNDE R SECTION 12A OF THE ACT VIDE ITS ORDER DATED 21.7.2011 WITH THE DIRECTION THAT PROVISIONS OF SECTION 11 AND 12 WOULD APPLY IN RELATION TO THE INCOME OF THE ASSESSEE - SOCIETY FROM ASSESSMENT YEAR 2002 - 03. THIS ORDER OF THE LD. COMMISSIONER OF INCOME - TAX GR ANTING REGISTRATION UNDER SECTION 12A OF THE ACT WAS NOT AVAILABLE : - 10 - : BEFORE THE LD. CIT(A) WHILE DISPOSING OF THE APPEAL AND HE HAS REJECTED THE CLAIM OF EXEMPTION UNDER BOTH THE PROVISIONS. NO DOUBT THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT BUT ITS CLAIM SHOULD BE EXAMINED IN VIEW OF GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT AND THE INCOME OF THE ASSESSEE IS TO BE COMPUTED IN THE LIGHT OF PROVISIONS OF SECTION 11 AND 12 OF THE ACT. WE FIND FORCE IN THE CONT ENTIONS OF THE ASSESSEE AS THE ORDER OF THE LD. COMMISSIONER GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT WAS PASSED AFTER DISPOSAL OF FIRST APPEAL BY THE LD. CIT(A). WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE - EXAMINE THE CLAIM OF THE ASSESSEE IN THE LIGHT OF GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT BY THE LD. COMMISSIONER AND THE INCOME OF THE ASSESSEE BE COMPUTED IN THE LIGHT OF PROVISIONS OF SECTION 11 AND 12 OF THE ACT. ACCORDINGLY THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 103/LKW/2011: 15. THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 10 LAKHS ON ACCOUNT OF GRANT - IN - AID RECEIVED FROM MAULANA AZAD EDUCATION FOUNDATION ALTHOUGH THE ASSESSEE HAS TREATED IT AS INCOME IN THE INCOME AND EXPENDITURE ACCOUNT. 16. IN THIS REGARD, OUR ATTENTION WAS INVITED BY THE LD. CO UNSEL FOR THE ASSESSEE TO THE FACT THAT EVEN AFTER RECEIPT OF THIS ` 10 LAKHS FROM MAULANA AZAD EDUCATION FOUNDATION, THE TOTAL ANNUAL RECEIPTS OF THE ASSESSEE - SOCIETY REMAINED LESS THAN ` 1 CRORE, THEREFORE, THE ASSESSEE - SOCIETY IS ENTITLED FOR EXEMPTION UN DER SECTION 10(23C)(IIIAD) OF THE ACT. THIS FACTUAL ASPECT OF THE MATTER WAS NOT DISPUTED BY THE LD. D.R. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). WE, IN FOREGOING APPEAL, HAVE ALREADY SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO : - 11 - : HIS FILE WITH A DIRECTION TO RE - EXAMINE THE ENTIRE ISSUE OF CLAIM OF EXEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT. WE ACCORDINGLY DIRECT THE LD. CIT(A) TO RE - EXAMINE THE ENTIRE ISSUE AS A WHOLE WITH REGARD TO THE CLAIM OF E XEMPTION UNDER SECTION 10(23C)(IIIAD) OF THE ACT ON ALL GROSS RECEIPTS OF THE ASSESSEE - SOCIETY. 17. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COUR T ON 5.10.2011. SD/ - SD/ - [B. R. JAIN ] [ S. K. YADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5.10.2011 JJ: 0310 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR