Sri Vidyalakshmi Foundation, Vellore V. DIT, CHENNAI

ITA 1177/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51790 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 23-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR STDG
• Assessee Lawyers: T VASUDEVAN
• Section: 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI B E F O R E DR. O.K.NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER .. ITA NO.1177(MDS)/2011 SRI VIDYALAKSHMI FOUNDATION NEW NO.28, MAIN BAZAR, VELLORE. PAN- AAJTS9397K VS. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), CHENNAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.VASUDEVAN, ADV OCATE RESPONDENT BY: SHRI KEB RENGARAJAN, JR. STDG.COUNSEL. DATE OF HEARING : 11 TH AUGUST, 2011 DATE OF PRONOUNCEMENT : 11 TH AUGUST, 2011 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL IS FILED BY THE ASSESSEE. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE DIRECTOR OF INCOM E- - - ITA NO.1177 OF 2011 2 TAX(EXEMPTIONS) AT CHENNAI DATED 27-5-2011, WHEREIN HE HAS REJECTED THE APPLICATION OF THE ASSESSEE FOR REGIST RATION UNDER SECTION 12AA OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE IS A TRUST. THE MAIN OBJECT OF TH E ASSESSEE TRUST IS TO RUN AN EDUCATIONAL INSTITUTION FROM PRE PRIMARY AND PRIMARY LEVEL ONWARDS. IT IS ALSO ONE OF THE OBJECTIVES OF THE ASSESSEE TRUST TO SPONSOR DESERVI NG CANDIDATES FOR HIGHER EDUCATION. 3. WHEN THE APPLICATION FOR REGISTRATION UNDER SEC TION 12AA WAS PUT IN BY THE ASSESSEE, THE DIRECTOR OF IN COME- TAX(EXEMPTIONS) OBSERVED THAT THE ASSESSEE HAS NOT OBTAINED ANY AFFILIATION FROM THE CONCERNED GOVERNMENT AUTHO RITIES FOR STARTING A PLAY SCHOOL AND IN SUCH CIRCUMSTANCES TH E FEE STRUCTURE OF THE ASSESSEES SCHOOL IS NOT GOVERNED BY ANY GOVERNMENT REGULATION AND THEREFORE THE FEES COULD BE FIXED BY THE ASSESSEE TRUST ARBITRARILY, WHICH WOULD INCLUDE PROFIT MOTIVE. IT IS HIS VIEW SUCH TYPE OF SCHOOL MAY NOT COME WIT HIN THE PURVIEW OF CHARITABLE OBJECTS. IT IS FOR THE ABOVE REASON THAT THE APPLICATION OF THE ASSESSEE WAS REJECTED. - - ITA NO.1177 OF 2011 3 4. AFTER HEARING BOTH THE SIDES IN DETAIL WE ARE O F THE VIEW THAT THE DIRECTOR OF INCOME-TAX(EXEMPTIONS) HA S RESORTED TO A PREMATURE CONDEMNATION OF THE APPLICATION PUT IN BY THE ASSESSEE. ONE OF THE OBJECTS OF THE ASSESSEE TRUST IS TO START A PLAY SCHOOL. THE ASSESSEE IS IN THE PROCESS OF EST ABLISHING SUCH A PLAY SCHOOL AFTER IDENTIFYING A SUITABLE PLACE. STARTING OF A PLAY SCHOOL AS SUCH DOES NOT REQUIRE ANY GOVERNMENT RECO GNITION. CARRYING ON EDUCATIONAL ACTIVITIES IS PRIMARILY CHA RITABLE IN NATURE. THE ASSESSEE IS IN THE PROCESS OF SETTING UP OF SUC H A SCHOOL. THERE IS NO ALLEGATION AGAINST THE ASSESSEE THAT IT HAS IN FACT COLLECTED EXORBITANT FEES FROM THE STUDENTS AND IT HAS ACTED WITH A PROFIT MOTIVE AND IT HAS APPLIED ITS FUNDS FOR PU RPOSES OTHER THAN EDUCATIONAL ACTIVITIES. ALL THE OBJECTIONS RA ISED BY THE DIRECTOR OF INCOME-TAX(EXEMPTIONS) ARE IN THE NATUR E OF HIS PERSONAL APPREHENSIONS. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE D O NOT FIND ANY REASON TO REJECT THE APPLICATION OF TH E ASSESSEE FILED IN FORM NO.10A FOR OBTAINING REGISTRATION UNDER SEC TION 12AA OF THE INCOME-TAX ACT, 1961. ACCORDINGLY WE SEND BACK THE FILE TO - - ITA NO.1177 OF 2011 4 THE DIRECTOR OF INCOME-TAX(EXEMPTIONS) WITH A DIREC TION TO GRANT REGISTRATION TO THE ASSESSEE TRUST UNDER SECTION 12 AA OF THE ACT. 6. IN RESULT THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 11 TH DAY OF AUGUST, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 11 TH AUGUST, 2011. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.